Welcome to the latest installment of our blog “What are the rules for NYS Sales tax for my profession?”  In this blog we are highlighting another industry with a few of the broad guidelines to follow!  Our hope is to not only provide helpful information for the business owners, but the consumers as well!

This blog focuses on Hotel and Motel Occupancy.

The term hotel includes: hotels, motels, inns, and bed and breakfast establishments.

Hotel occupancy is the use, or right to use, a room in a hotel.  The room rate, that everyone hates to pay, is the amount that guests must pay to stay in the hotel room.  The room rate is taxable at the full state and local sales tax rate.

If you stay in a hotel in New York City there is an additional hotel unit fee that hotels must charge. The hotel unit fee is an extra $1.50 per unit per day, in addition to state and local sales tax.  This fee is separately stated on the invoice that customers receive.  Certain localities charge a bed tax, which is also shown separately on the customer’s invoice.

There are certain charges that do not require sales tax to be collected.  These charges are as follows:

  •  Cancellation fees are not taxable because the customer never has the right to occupy the room.
  • Hotel guests that are permanent residents do not have to pay sales tax on their room rates.  A permanent resident is when a guest must stay in the hotel for at least 90 consecutive days without interruption.
  • A complimentary room does not require any sales tax due.  This is because the hotel is allowing the guest to stay in a room for no charge.

This is just a brief overview of the sales tax laws regarding hotel and motel occupancy.  Feel free to give our office a call for more information.