Rentals of Accommodations
What Sales and Use Tax is Due?
The gross receipts derived from the rental of an accommodation are subject to the general state and applicable local and transit rates of sales and use tax and any local occupancy tax. An accommodation includes a hotel room, a motel room, a residence, a cottage, or a similar lodging facility for occupancy by an individual.
The sales price of the rental of an accommodation is determined as if the rental were a rental of tangible personal property.
Fees or Charges Associated with the Rental of an Accommodation
Charges Subject to Tax as Part of Gross Receipts from the Rental of an Accommodation
Generally, charges and fees by a retailer or accommodation facilitator of an accommodation are considered part of the gross receipts from the rental of an accommodation. Items that are taxable as part of the gross receipts from the rental of the accommodation include, but are not limited to:
- Credit card fees.
- Damage fees.
- Early or late departure fees.
- Extra person charges.
- In-room safe rentals.
- Inspection fees.
- Linen fees.
- Cleaning fees.
- Peace of mind fees (similar to insurance but provided by hotel or rental agency rather than third-party carrier).
- Pet fees (incurred by guests who have pets traveling with them).
- Reservation fees (also referred to as a handling, processing, or administrative fee).
- Security deposits.
- Smoking fees.
- Transfer fees (for changing to a different room, unit, or date).
- Tentative reservation fees (for priority reservation the following year).
- Charges for cribs and roll-away beds.
- Charges for microwave ovens and refrigerators.
- Accommodation facilitator fees.
- Any other charges necessary to complete the rental.
Charges Subject to Tax as Rentals of Tangible Personal Property
Charges for rentals of taxable tangible personal property, that are considered separate from the charges for the accommodation, are subject to the general state, applicable local, and applicable transit rates of sales and use tax. Items that are considered rentals of tangible personal property include, but are not limited to:
- Video tapes, DVDs, and related video equipment.
- Beach equipment such as chairs, toys, and umbrellas.
- Recreational equipment such as skis, surf boards, and snorkeling equipment.
- Audio visual equipment.
Charges Not Subject to Sales and Use Tax
Certain charges made by the retailer or accommodation facilitator of an accommodation are not subject to sales and use tax provided the charges are separately stated on the invoice or similar billing document given to the lessee of the accommodation. The following charges are not subject to sales and use tax provided the charges are separately stated on the invoice or similar billing document given to the lessee of the accommodation:
- Banquet room rental only (no food included).
- Cancellation fees.
- Internet services.
- Returned check charges.
- Telephone calls (unless a set fee is charged to all persons regardless of whether calls are made).
- Trip insurance provided by a third party.
- Security deposits refunded to the purchaser of an accommodation rental.
- Parking fees.
How to File and Pay?
Electronically file and pay the sales and use tax due on the rental of accommodations on Form E-500, Sales and Use Tax Return, using our online filing and payment system.
A printable version of Form E-500, Sales and Use Tax Return, is also available.