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.

In a typical year, taxable sales and taxes collected are highest in the summer months, which is reflected in the September and December distributions. Meals make up the majority of the taxable sales, while rooms make up the majority of total taxes collected. The amount of taxes collected varies across the towns in Barnstable County, with Barnstable, Falmouth, Provincetown, and Yarmouth having the highest total amounts of taxes collected thus far in 2026 and Bourne and Mashpee having the lowest. Barnstable, Falmouth, and Yarmouth had the highest total estimated taxable sales so far in 2026, and Brewster, Eastham, Truro, and Wellfleet had the lowest.

Download an Excel file of the Local Option Taxes Dashboard data.