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Some communities shortchanged, others enriched by hotel tax error

BARNSTABLE -- Miscalculations dating back to 1998 meant that too little revenue from state hotel taxes went to 11 communities and too much to nine others, according to a state audit.

A special measure the Legislature passed would send $3.27 million back to the towns that are due money. The proposal, which Governor Mitt Romney is expected to sign, would not require towns that receive too much money to return it.

The audit found that many hotel or motel chains had submitted incorrect paperwork, triggering six years of incorrect payments from room occupancy tax revenue, the Cape Cod Times reported yesterday.

Some hotel chains incorrectly registered individual hotels under a corporate address rather than the location of the actual buildings, so some tax revenue didn't end up in the communities where guests stayed. The state Department of Revenue has admitted its own errors as well, agency spokesman Tim Connolly said.

According to department records, the following towns were shortchanged on room occupancy tax revenue: Charlemont, $7,567; Chelmsford, $487,312; Falmouth, $388,645; Harwich, $7,964; Holyoke, $4,129; Raynham, $542,961; Tewksbury, $806,061; Tisbury, $18,802.89; Westborough, $832,613; and Yarmouth, $156,252.

Communities that were overpaid but will not have to return the extra money are: Brockton, $542,961; Barnstable, $202,310; Danvers, $1.64 million; Dennis, $4,364; Lowell, $487,312; Nantucket, $364,509; Newton, $4,129; and Westfield, $7,567.

Bourne is the only community that was overpaid in one instance ($19,507) and underpaid in another ($1,150). The town is due to receive $1,150 as a result of the bill.

Falmouth Town Administrator Robert Whritenour Jr. said the money will be welcome in his town, where the snow and ice removal budget is dwindling faster than expected.

While the state charges a 5.7 percent tax for every hotel or motel room rented in the Commonwealth, 167 towns statewide also apply their own 4 percent tax. The tax last year generated more than $57.7 million in state receipts and more than $32 million for communities.

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