Answers to common questions about Kelowna's Hotel Guest Tax
Find answers to common questions about the Hotel Guest Tax, formally known as the Municipal and Regional District Tax (MRDT), including how the tax is collected, how funds are used, and the role it plays in supporting tourism in Kelowna.
MRDT Frequently Asked Questions
What is the Municipal and Regional District Tax (MRDT)?
The Municipal and Regional District Tax (MRDT) is a provincial program jointly administered by the BC Ministry of Finance, the BC Ministry of Tourism, Arts, Culture and Sport, and Destination BC.
MRDT is an accommodation tax collected under provincial sales tax legislation to support tourism marketing, programs, and projects in participating communities throughout British Columbia. Agreements between the Province and participating communities are approved for five-year terms and must be periodically renewed.
What is the current tax rate?
In Kelowna, the MRDT rate is 3% of gross accommodation revenue. Accommodation providers collect the tax and remit it to the Province of British Columbia along with Provincial Sales Tax (PST) payments.
How are MRDT funds used?
MRDT revenue generated by hotels and other eligible accommodation providers in Kelowna is used to support tourism marketing initiatives that attract visitors and strengthen the local visitor economy.
Funds remitted by traditional accommodation providers are allocated to Tourism Kelowna for destination marketing activities. MRDT revenue collected through online accommodation platforms is directed toward affordable housing initiatives in accordance with provincial policy.
MRDT funding is intended to supplement, not replace, existing sources of community funding.
How much revenue is collected?
In 2025, approximately $4.4 million was collected through MRDT in Kelowna.
MRDT revenue represents approximately 70% of Tourism Kelowna's annual operating budget, providing critical funding for destination marketing initiatives that attract visitors, support local businesses, and contribute to the local economy.
What role does Tourism Kelowna play?
Tourism Kelowna serves as the designated service provider for MRDT funding on behalf of the City of Kelowna.
Tourism Kelowna administers MRDT funds allocated for destination marketing and is responsible for delivering tourism marketing programs and initiatives that support visitation and the visitor economy. Tourism Kelowna also provides annual strategic plans, tactical plans, performance reporting, and financial reporting required under the MRDT agreement.
What role does the City of Kelowna play?
The City of Kelowna is the designated recipient of MRDT funding and serves as the applicant and agreement holder with the Province of British Columbia.
The City is responsible for ensuring compliance with the terms of the MRDT agreement and fulfilling all reporting requirements established by the Province.
The current MRDT agreement is in place through June 30, 2027.
Why is MRDT being renewed?
MRDT agreements are approved for five-year terms. Kelowna's current agreement expires on June 30, 2027.
To continue investing in destination marketing and supporting the visitor economy, the City of Kelowna is seeking renewal of the Municipal and Regional District Tax at the current 3% rate for the period of July 1, 2027, to July 1, 2032.
As part of the renewal process, support from local accommodation providers and tourism stakeholders is required.
What does Kelowna contribute to the Destination Events Program (DEP)?
The Province retains a small portion of MRDT revenue to administer the program. In addition, 2% of remitted MRDT revenue is allocated to the provincial Destination Events Program (DEP).
The DEP provides funding to communities across British Columbia to help attract, grow, and host major events that generate economic and tourism benefits.
