Local Option Taxes
Part of a highly tourism-dependent region, Cape Cod towns can generate significant revenue from meals and rooms taxes. The Massachusetts Department of Revenue (DOR) Division of Local Services provides town-level data on rooms and meals taxes. Beginning in July 2019, state and local rooms tax collections were expanded to include short-term rentals, resulting in a significant increase in rooms tax filers. The COVID-19 pandemic also affected rooms and meals tax revenues in the region; for some towns, the attraction of drivable destinations, an uptick in outdoor recreation, and a strong second homeowner market may have contributed to increased tax revenues.
Also in July 2019, collections started for a new Cape Cod and Islands Water Protection Fund (CCIWPF), which collects an additional 2.75% from rooms transactions in all 15 Cape Cod towns. The CCIWPF provides funding for wastewater infrastructure and water quality remediation projects in the region. These are separate revenues distributed directly to the CCIWPF and are not included in the figures below.