Municipal Accommodation Tax

A MAT is a mandatory municipal tax paid on accommodations. Travelers must pay the amount that is stipulated by the municipality. Many municipalities in Ontario have already implemented a MAT and the majority of municipalities have implemented a 4% MAT.

The Municipality of Lambton Shores passed a by-law to impose a Municipal Accommodation Tax as of January 1, 2026

When MAT is collected, the Municipality keeps 50 per cent of the revenue generated. The remaining 50 per cent must be shared with a designated Eligible Tourism Entity, which is a non-profit entity whose mandate includes the promotion of tourism in Ontario or in a municipality.

For example: if $100,000 was collected through the MAT:

• $50,000 would be distributed to the tourism entity; and
• $50,000 would be retained by the Municipality to assist with things like infrastructure projects or other tourism-related amenities or municipal services

The Municipality established a Municipal Services Corporation to be the designated Eligible Tourism Entity in Lambton Shores.

The authority for accommodation operators to charge and collect the MAT comes from Ontario's Municipal Act, 2001:

• Section 400.1 grants municipalities the power to impose a transient accommodation tax through by-law

Once a municipality passes a Municipal Accommodation Tax By-Law, all accommodation providers within that jurisdiction are legally required to collect the tax from guests and remit it to the municipality or its designated collection agent.

The MAT is mandatory.

The Municipality of Lambton Shores has designated the Ontario Restaurant Hotel and Motel Association (ORHMA) as its agent to collect the MAT from accommodation providers and remit to the Municipality.

Revenue can vary year by year. Based on current estimations using average nightly rentals in Lambton Shores, staff expect that revenue generated from MAT in Lambton Shores could be as high of $400,000 annually (to be split with the designated tourism entity).

The Municipality of Lambton Shores MAT is four per cent (4%), similar to the industry standard across the Province.

No. The transient accommodation tax authority does not extend to incidental fees and charges unrelated to the purchase of accommodation.

The by-law states: "The Municipal Accommodation Tax shall not apply to Ancillary Charges that are itemized separately on the Purchaser’s receipt."

For example, the purchase of a meal in a hotel restaurant would not be considered transient accommodation and therefore would not be made subject to a Municipal Accommodation Tax.  However, where the accommodation provider fails to separately itemize Ancillary Charges, the Municipal Accommodation Tax shall apply to the total amount of the purchase price. 

The Municipality has partnered with the Ontario Restaurant Hotel and Motel Association (ORHMA) to administer collection of the tax from accommodators and to facilitate the reporting required.

The Municipality has designated the Ontario Restaurant Hotel Motel Association (ORHMA) as its agent to collect the MAT from Accommodation Providers and remit to the Municipality.

Accommodators will be required to register, at no cost, with the Ontario Restaurant Hotel and Motel Association.  Reporting on applicable bookings will be reported through ORHMA, as well as remittances for amounts collected will be processed through this organization.

More information about this process will be shared directly with accommodators during a session with ORHMA. Session details will be communicated by the Municipality.

ORHMA provides an online “MAT Reporting Tool” to Accommodation Providers to report MAT on a monthly basis. Required data:

• Name of the Property
• Property MAT contact person name, email and phone
• Contact information of Manager, Accountant and Owner
• Room nights available
• Room nights occupied
• Rooms Revenue
• Rooms Revenue with Exemption/reasons

The “MAT Reporting Tool” will calculate MAT owing. Accommodation providers will remit MAT collected to ORHMA in accordance with the MAT Collection By-Law.

Yes, it will be kept confidential and secure. This process may involve personal information as defined under the Municipal Freedom of Information and Protection of Privacy Act. This information is collected under the legal authority of the Municipal Act, 2001, S.O. 2001 c25, as amended. Information provided to either the ORHMA or the Municipality will be kept confidential and used strictly for the purposes of determining the MAT required.

Information will be shared as required between the Municipality and ORHMA for the purposes of administering the by-law, but will not be shared for other purposes.

Yes. The transient accommodation tax authority allows each municipality that chooses to implement a transient accommodation tax to determine the types of short-term accommodation the tax would apply to. The tax can only apply to accommodation that is short-term in nature.

In Lambton Shores, the MAT will apply a four per cent (4%) charge on the accommodation portion of stays under 30 days at all hotels, motels, bed & breakfasts, and short-term rentals within the Municipality.

Yes. The 13% Harmonized Sales Tax (HST) applies to the all-in price of transient accommodation, including any municipal accommodation tax.

The Municipality's Municipal Accommodation by-law outlines the design.of the tax, including the appropriate enforcement mechanisms.

There isn’t a list of what these charges might or could be, as this varies substantially between accommodators. Whether these are an integral part of the experience or not might influence whether or not separation is a preferred approach by the accommodator.

This would be up to the individual accommodator. The only required separation is the accommodation costs from anything else, as it is only accommodation costs that the fee applies to.

If costs are not separated, the four per cent (4%) MAT applies to the whole amount charged. If the costs are separated, the MAT would apply only to the accommodation portion.

Yes, every bill, receipt, invoice or similar document for the purchase of accommodation must have a separate line item identified as “Municipal Accommodation Tax” showing the rate at which the Municipal Accommodation Tax is calculated (4%) and the dollar amount of the Municipal Accommodation Tax.

If limitations with booking platforms or software do not allow the MAT to be calculated as a separate line item, the MAT can be worked into the room cost. In this case, a note on the receipt, invoice or statement is required and must include the MAT percentage (4%) as well as the dollar amount.

Deposits do not affect how much of the stay that the MAT applies to. If there is any balance owing after January 1, 2026, then MAT applies on the whole amount.

No. Airbnb will not be collecting the MAT on behalf of hosts.

For now, there is functionality to ‘add tax’ through the Airbnb platform, which hosts can read about on the Airbnb website. To access the ‘add tax’ feature, hosts will need Airbnb’s professional hosting tools.

If you did not sell any accommodations during the reporting period, and therefore did not collect any Municipal Accommodation Tax, you will still be required to report this, indicating that MAT was not collected during the reporting period.

Yes. The Municipality's tax collectors may inspect and audit all books, documents, transactions, and accounts of accommodation providers for the purposes of administering and enforcing By-Law 45 of 2025, being a by-law to impose a Municipal Accommodation Tax on the purchase of accommodations of short-term duration.

Accommodation Providers must keep books of account, records and all documents for a period of seven years related to the:

• sale of accommodation
• amount of the Municipal Accommodation Tax collected, and
• the remittances made to the ORHMA

If the Municipal Accommodation Tax was added to an invoice that was paid by a guest, and you subsequently issue a full or partial refund on that accommodation charge, the customer should also be refunded the applicable amount of MAT that corresponds to the refund amount. If the refund occurs after you have remitted the MAT, you can adjust the MAT submission the following month noting the refund in your submission documentation.

If you experience no-shows and your policy is to charge a portion of the room rental as a penalty, then the MAT should also be charged to the no-show portion. If, however, you have a flat administrative fee that is charged for no shows no matter what the room rate, then the MAT does not need to be applied.

• CAO Report 09-2019 - Municipal Accommodation Tax
• CAO Report 01-2020 - Municipal Accommodation Tax
• CAO Report 04-2024 - Municipal Accommodation Tax
• CAO Report 01-2025 - Establishing Municipal Accommodation Tax Service Corporation

Read the Business Case Study for the Tourism Municipal Services Corporation

• Municipal Act, 2001
• O. Reg. 435/17: Transient Accommodation Tax