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Municipal & Regional District Tax (MRDT)

Frequently Asked Questions

What is the Municipal & Regional District Tax or MRDT?

The Municipal and Regional District Tax program (MRDT) is a provincial program jointly administered by the BC Ministry of Finance, BC Ministry of Tourism, Arts & Culture and Destination BC, the crown corporation providing tourism services for the province.

The MRDT is an accommodation tax collected under the provincial sales tax legislation to fund tourism marketing, programs and projects. Agreements between the province and communities are for 5-year terms.

What is the current tax rate?

In Kelowna, the MRDT tax level is 3% of gross room sales. It is collected by the accommodators and remitted with their Provincial Sales Tax to the Ministry of Finance. 

How are the funds used?

MRDT revenue remitted by Kelowna hotels is allocated to Tourism Kelowna for destination marketing; MRDT revenue remitted by Kelowna Short Term Rentals (STRs) is allocated to help address the city’s affordable housing issues.

MRDT funds are intended to augment current funding and cannot be used to replace existing sources of funding in a community such as annual grants.

What role does the City of Kelowna play in the collection and allocation of MRDT?

The City of Kelowna is the “designated recipient” of the MRDT funds, the city is the applicant, the agreement holder with the province and is ultimately responsible for all compliance and reporting requirements. Kelowna’s current MRDT agreement with the province is for 2017- 2021.

What role does Tourism Kelowna play in the collection and allocation of MRDT?

Tourism Kelowna is the “eligible entity”, Tourism Kelowna is the service provider, administering the MRDT funds on behalf of the City of Kelowna to deliver tourism marketing, programs and projects.  Tourism Kelowna also provides the city with the annual strategic plan, tactical plan, performance report and financial reports required under the MRDT agreement.

What does Kelowna contribute to the Tourism Events Program (TEP)?

The province holds back a small percentage of the remitted tax for administration costs in addition to 2% to fund the provincial Tourism Events Program, a funding source to help communities attract new, major events to the province. 

How much revenue is collected?

In Kelowna, MRDT revenue makes up approximately 60% of Tourism Kelowna’s total annual budget. In 2019, $2.8M in MRDT was collected.

When is the next renewal period?

The current 5-year agreement “repeal date” is July 1, 2022. The renewal application package must be received by Destination BC no later than January 1st, 2022 (6 months prior to the repeal date).