Current through Register Vol. 46, No. 12, March 20, 2024
Tax Law, § 1105(e)
(a)
Imposition.
(1) A sales tax is imposed on the rent for
every occupancy of a room or rooms in a hotel, motel, or similar establishment
in New York State. The tax is imposed at the combined State and local sales tax
rate in effect at the location of such establishment. However, the tax does not
apply to:
(i) rent for occupancy of a
permanent resident;
(ii) rent of $2
or less per day; or
(iii) rent for
any occupancy that is otherwise excluded or exempted from tax under the Tax Law
or under any other provision of law.
(2)
(i)
Except as otherwise provided in this section, reference to tax includes the
State and local sales taxes that are imposed on rent received for hotel
occupancy under article 28 and pursuant to the authority of article 29 of the
Tax Law that are administered by the Commissioner of Taxation and
Finance.
(ii) Except as otherwise
provided in this section, reference to tax also includes the fee imposed by
section
1104 of the Tax Law on every occupancy of a
unit in a hotel located in New York City. This fee is administered and
collected by the commissioner in the same manner as the tax imposed on rent
received for hotel occupancy. The hotel unit fee is not included in the amount
of rent upon which the tax is computed.
(b)
Definitions.
As used in this section, the following terms shall
mean:
(1)
Hotel. A
hotel is a building , or portion of it, that is regularly used
and kept open for the lodging of guests. The term
hotel
includes, but it not limited to, an apartment hotel, a motel, bungalow or
cottage colony, boarding house, or club, whether or not meals are served. A
building, or portion of the building, falls within this definition if, among
other factors:
(i) sleeping accommodations are
provided for the lodging of paying occupants on a regular basis;
(ii) typical occupants are transients or
travelers;
(iii) housekeeping,
linen, or other customary hotel services are provided for occupants;
and
(iv) the relationship between
the operator of the establishment and the occupant is that of an innkeeper and
guest, not that of a landlord and tenant (e.g., the occupant
does not have an exclusive right or privilege with respect to any particular
room or rooms, but instead merely has an agreement for the use or possession of
the room or rooms).
(2)
Operator. Any person operating a hotel.
(3)
Occupancy. The use or
possession of, or the right to use or possess, any room in a hotel.
(4)
Occupant. A person who,
for a consideration, uses, possesses or has the right to use or possess, any
room in a hotel under any lease, concession, permit, right of access, license
to use or other agreement, or otherwise.
(5)
Room. Any room or rooms
of any kind in any part or portion of a hotel, which is available or let out
for any purpose other than as a place of assembly. The term
room also includes dormitory-type sleeping facilities
furnished at ski lodges, dude ranches and similar establishments.
(6)
Place of assembly. A
room or suite of rooms containing no sleeping accommodations and intended to be
occupied and used by persons for purposes other than as sleeping and living
quarters, such as education, recreation, amusement or business or religious
meetings. A suite of rooms, some of which contain sleeping accommodations, is
not a place of assembly, even though some of the rooms may be used for purposes
other than living quarters, since the occupant has the right to use all of the
rooms.
(7)
Rent.
(i)
Rent is the
consideration received for hotel occupancy valued in money, whether received in
money or otherwise. The term rent includes charges for
accommodations, services, facilities, amenities, and items that are incidental
to the occupancy of the room or rooms, whether those charges are separately
stated or included as one sum in the rate for the room or rooms. This includes,
but is not limited to, charges for the use of furnishings and equipment;
charges for housekeeping service, towel and linen service, local telephone
service (not billed on a per-call basis); and other similar incidental charges.
See, also, subdivision (i) of this section concerning miscellaneous
transactions.
(ii) Reasonable and
separately stated charges that are not incidental to the occupancy of a room or
rooms in a hotel are not considered to be rent. For example, reasonable and
separately stated charges for food and drinks, entertainment, valet and laundry
service, theater ticket service, parking, and transportation do not constitute
rent, but may be taxable under other sections of the Tax Law. See, for example,
subdivisions (h) and (i) of this section concerning food services and other
miscellaneous transactions.
(8)
Permanent resident.
(i)
(a)
Except as provided in clause (
b) of this subparagraph, any
occupant of any room or rooms in a hotel for at least 90 consecutive days is
considered a permanent resident with regard to the period of such occupancy.
There is no tax on the rent for occupancy of a hotel room by a permanent
resident. A hotel operator must collect the tax from an occupant until the
occupancy reaches 90 consecutive days. When continuous occupancy has reached 90
days, the sales tax is no longer imposed and the tax previously collected is
refundable to the occupant. If any part of the tax refunded by the operator to
the occupant has been paid to the Department of Taxation and Finance, the
operator may take a credit in the amount of the tax paid on the operator's next
timely filed sales tax return. If the tax is not refunded to the occupant by
the hotel operator, the occupant may apply directly to the department for a
refund. See Part 534 of this Title for general information concerning refunds
and credits.
Example:
A corporation contracts with a hotel operator for five
rooms on a continuing basis for use by its employees, and it uses additional
rooms at the hotel as the need arises. The operator is required to collect tax
on the rent for occupancy that is received from the corporation. When 90
consecutive days of occupancy have passed, the corporation will be considered a
permanent resident with respect to the five rooms occupied continuously for 90
days. At that time, the hotel operator is no longer required to collect tax on
the rent for the five rooms and the corporation is entitled to a refund of the
tax previously paid on the rent for these occupancies. As to the additional
rooms that the corporation occupies, it is not a permanent resident and is not
eligible for a sales tax exclusion or refund.
(b) For purposes of the local sales tax
imposed in New York City under section
1210 of the Tax Law, any occupant of any
room or rooms in a hotel for at least 180 consecutive days is considered a
permanent resident with regard to the period of such occupancy. Accordingly,
the provisions of clause (a) of this subparagraph do not apply
to this tax until occupancy reaches 180 consecutive days.
(ii) The change of rooms within the same
hotel does not alter a person's status as a permanent resident nor interrupt
the number of consecutive days necessary in order to establish permanent
residency.
(iii) A permanent
resident who transfers from one hotel to another hotel, whether or not the
hotels are run by the same operator, loses permanent resident status and must
complete the required number of days at the new establishment before becoming a
permanent resident there. Similarly, a change of hotels by an occupant who is
not yet a permanent resident interrupts the number of consecutive days
necessary in order to establish permanent residency.
(iv) When a hotel room has more than one
occupant that pays rent for the right to occupy the room, the status of
permanent resident is determined individually for each occupant.
(v) An occupant who is a permanent resident
of a hotel and who permits the operator to rent the occupant's room during the
occupant's temporary absence will no longer be considered a permanent resident
if during the period of absence the occupant no longer has the right to use or
possess another room in the same hotel. In which case, upon the occupant's
return, the occupant must reestablish permanent resident status. The new
occupant to whom the room is rented during the temporary absence is liable for
tax until occupancy is maintained by the new occupant for the required number
of consecutive days.
(vi) When a
hotel room is rented by a business entity for use by an employee, customer,
client, or other authorized person, the days that the person occupies the room
for which the business pays the rent to the hotel operator are considered to be
days that the room is occupied by the business, provided the business is not
reimbursed or otherwise paid for the right to occupy the room. Days when the
room is rented but remains unoccupied and for which no one reimburses or
otherwise pays the business for the right to occupy the room are also
considered to be days that the room is occupied by the business.
Cross-reference:
For definition of terms as applicable to room remarketers,
see section
1101(c) of the Tax
Law.
(c)
Computation.
(1) Rent for the occupancy of a hotel room or
rooms is taxable if the rate is more than $2 per day. When rent is charged on a
weekly, monthly, or other basis, the daily rate is computed by dividing the
number of days in the rental period into the total amount of rent for the
period.
(2) If there is an increase
or decrease in the tax rate, tax must be collected at the new rate on rent
received for any occupancies that occur on and after the effective date of the
rate change. If rent is charged at other than a daily rate, the tax must be
apportioned on a "pro rata" basis.
(3) Rent for the occupancy of dormitory-type
sleeping facilities furnished at ski lodges, dude ranches, and similar
establishments is subject to tax on the rate charged each occupant if the rent
is more than $2 per day per person. In all other types of hotel rooms,
taxability is determined by the daily rate for the room, not the charge per
person.
(4) Certain local
jurisdictions are authorized to impose and administer additional taxes on hotel
or motel occupancy (see, for example, section 1202-a et seq.
of the Tax Law). Such a locally administered tax is not included in the amount
of rent upon which the sales tax is imposed.
(d)
Exemptions from tax on rent for
hotel occupancy.
The persons and organizations described in section
1116 of the Tax Law and Part 529 of this
Title are exempt from sales tax imposed on rent for hotel occupancy. See Part
529 of this Title, Exempt Organizations.
(1) New York State and its agencies,
instrumentalities, public corporations, and political subdivisions (New York
State governmental entities).
(i) Where
payment of rent is made by a representative or employee of a New York State
governmental entity while on official business, the exemption from tax is
established by furnishing the hotel operator with a properly completed
exemption certificate.
(ii) Where
direct payment is made to the hotel operator by the State governmental entity
for occupancy of its representative or employee while on official business, no
exemption certificate is required in order to establish the exemption. However,
proof of the payment, such as a copy of the voucher or check received, must be
retained by the hotel operator.
(2) The United States of America and its
agencies and instrumentalities (United States governmental entities).
(i) Where payment of rent is made by a
representative or employee of a United States governmental entity while on
official business, the exemption from tax is established by furnishing the
hotel operator with a properly completed exemption certificate.
(ii) Where direct payment is made to the
hotel operator by the United States governmental entity for occupancy of its
representative or employee while on official business, no exemption certificate
is required in order to establish the exemption. However, proof of the payment,
such as a copy of the voucher or check received, must be retained by the hotel
operator.
(3) The United
Nations, any international organization of which the United States is a member,
and diplomatic missions and personnel.
(i)
Where payment of rent is made by a representative or employee of the United
Nations or of any international organization of which the United States is a
member, while the representative or employee is on official business, the
exemption from tax is established by furnishing the hotel operator with a
properly completed exemption certificate.
(ii) Where payments are made by diplomatic
missions and personnel (including members of their families), the exemption
from tax is established by furnishing the hotel operator with properly
completed exemption certificates.
(iii) In addition to the exemption
certificates required by this paragraph and notwithstanding any other provision
of this Title, the exemption from tax on rent received for hotel occupancy
applicable to diplomatic missions and personnel may be administered in
conjunction with the United States Department of State's or the American
Institute in Taiwan's, as the case may be, most current tax-exemption program.
Where the United States Department of State has extended its tax-exemption
program to the United Nations or to any international organizations of which
the United States is a member, the exemption from the tax on hotel occupancy
may also be administered in conjunction with that program.
(4) Organizations determined to be exempt
under section
1116(a)(4) and
(5) of the Tax Law (exempt organizations).
(i) Where payment of rent is made to a hotel
operator by an exempt organization for the occupancy of rooms for its own use
or for use by its officers, employees, members, or other representatives in the
conduct of the organization's activities, the exemption from tax is established
by furnishing the hotel operator with a properly completed exemption
certificate.
(ii) Where the exempt
organization rents rooms from a hotel operator for the specific purpose of
re-renting the rooms to its officers, employees, members, or other
representatives participating in the organization's activities, it is not
liable for tax if a properly completed exemption certificate is submitted to
the operator. The exempt organization is not required to collect tax on the
charges for occupancy that it receives.
(iii) Where payments are made directly to the
operator for hotel occupancy by use of personal funds or personal credit/debit
cards of officers, employees, members, or other representatives of an exempt
organization, other than duly authorized representatives acting on behalf of a
post, organization, or affiliate as described in section
529.8(j)
of this Title, there is no exemption from the tax on hotel occupancy.
(iv) An exempt organization described in
section
1116(a)(4) of the Tax Law
that operates its own hotel (or operates a leased hotel) in furtherance of the
purposes for which it was organized is not required to collect tax on the rent
for occupancy that it receives from its members or other guests if it carries
on activities in furtherance of such purposes within the same premises. When
such activities are not carried on within the same premises, the rent received
from its members and guests is subject to tax.
(v) Notwithstanding subparagraph (iv) of this
paragraph, any hotel operated by a college or university that offers 100 or
more rooms for occupancy must collect the tax on rent received from occupants
unless the occupants are otherwise excluded or exempted from tax.
(e)
Nontaxable
facilities.
The following facilities are not subject to the tax imposed
on rent received for hotel occupancy:
(1) Places of assembly. A room or suite of
rooms containing no sleeping accommodations and used solely as a place of
assembly (see paragraph [b][6] of this section) is not a room or rooms in a
hotel upon which the occupancy tax is imposed. However, the rental of a place
of assembly in conjunction with the sale of food or drink may be subject to tax
under section
1105(d) of the Tax Law.
See subdivision (h) of this section and section
527.8 of
this Part.
(2) Health-care and
similar facilities. A nursing home, rest home, family care home, or similar
facility that is registered with or under the supervision of a New York or
Federal governmental agency, whether the facility is publicly or privately
owned and operated, that accepts persons who require special care on account of
age, illness, mental or physical condition, or the like and that provides this
special care is not a hotel with respect to such individuals.
(3) Summer camps and other overnight camps
for children.
(i) A camp for children that
provides overnight sleeping accommodations and a program of instructions,
training, or other organized activities that the campers are required to pursue
under the supervision of counselors or other supervisory personnel is not a
hotel. The fee paid for a child to attend such a camp is not subject to the tax
on rent received for hotel occupancy nor the tax imposed on meals pursuant to
section
1105(d) of the Tax Law.
However, unless otherwise excluded or exempted from tax, if guest facilities
are provided for parents or others, taxes are due on any rent of more than $2
per day for these occupants and on any receipts from the sales of meals to
these occupants.
(ii) Sales tax is
not imposed on rentals of campsites, trailer sites, or other real
property.
(4) College
dormitories and other student-housing facilities.
A dormitory, apartment, house, or other facility operated
by a school, college, or university in which its students reside is not a
hotel. However, unless otherwise excluded or exempted from tax, if facilities
are provided for parents, alumni, or others, any rent that is charged for their
occupancy is taxable if it is more than $2 a day.
(5) Bungalows and similar living units.
A bungalow or similar furnished living unit limited to a
single-family occupancy is not a hotel provided no housekeeping, food, or other
common hotel services, such as entertainment or planned activities, are
provided by the lessor. The furnishing of linen by the lessor without the
service of changing the linen does not alter the nontaxable status of any
rental charges.
(f)
Complimentary
accommodations.
(1) When a hotel
furnishes complimentary accommodations for which there is no consideration paid
and no rental charged, the hotel operator need not collect the tax on the
normal rent for the room.
(2) Where
there is consideration, such as bringing future business to the hotel by a tour
guide, travel representative, or other person in exchange for an accommodation
free of charge, the accommodation is subject to the tax on the normal rent for
the room, except where the normal rent is $2 or less a day or is otherwise
excluded or exempted from tax.
(g)
Employee lodging.
(1) Lodging furnished by an employer to
employees is not subject to tax if the employer receives no cash (or other
consideration) for the lodging from the employees and the value of the lodging
is not income for the employees under the Federal or State income tax
laws.
(2) An employer furnishing
lodging to employees, as provided in paragraph (1) of this subdivision, is not
required to collect or pay a tax on the value assigned to the lodging. However,
the employer is liable for tax for any expenses incurred that would ordinarily
be taxable to the operator of a hotel.
(3) Any charge by an employer to a employee
for lodging is subject to tax, whether paid in cash by the employee or withheld
from the employee's wages.
(4) This
subdivision shall apply only to lodging furnished to employees of hotels,
motels and similar establishments.
(h)
Food services offered by
hotels.
(1) The American plan and other
similar plans.
(i) A hotel operating on the
American plan, modified American plan, or other similar plan that combines
hotel occupancy and food services for a single charge must collect tax on the
total charge (if the charge is more than $2 a day). Once an occupant becomes a
permanent resident, the hotel operator should discontinue collecting tax on the
amount charged for the room, but must continue to collect tax under section
1105(d) of the Tax Law on
the charge for meals. In lieu of establishing a separate charge for meals, the
operator may use the schedule shown below to determine the percentage of the
total charge to be apportioned to meals and may collect tax based on that
amount.
SCHEDULE
Total charge
includes |
Room |
Meals |
Room, breakfast, lunch, dinner |
50% |
50% |
Room, lunch, dinner |
60% |
40% |
Room, breakfast, dinner |
60% |
40% |
Room, breakfast, lunch |
70% |
30% |
Room, dinner |
75% |
25% |
Room, lunch |
85% |
15% |
Room, breakfast |
85% |
15% |
(ii) If the hotel operator neither separately
states the charge for the room and the charge for meals nor uses the above
schedule, the entire charge is taxable whether the occupant is a permanent
resident or not.
(iii) A hotel
offering a free continental breakfast (e.g., juice, pastry,
and coffee) may not separately state a reasonable value for the breakfast or
use the schedule set forth in subparagraph (i) of this paragraph because the
entire charge is subject to tax as rent for occupancy of the room.
(2) Separately stated charges for
food and drink served at a restaurant, tavern, or other establishment operated
by a hotel are taxable under section
1105(d) of the Tax Law.
(See section
527.8 of
this Part.)
(3) Charges for room
service constitute part of the receipt from the sale of food and drink and are
taxable under section
1105(d) of the Tax
Law.
(4) The rental of a place of
assembly in a hotel in conjunction with the sale of food and drink is subject
to tax under section
1105(d) of the Tax Law.
However, if the hotel merely provides incidental snacks during a break from an
activity and the charges for providing the snacks are reasonable and separately
stated, only such charges are subject to tax. Examples of these incidental
snacks are coffee, tea, donuts, cookies, candy, and ice cream.
(i)
Miscellaneous
transactions.
(1) The following
charges made by hotels are taxable:
(i)
Charges for basic telephone services are incidental to hotel occupancy and are
taxable as part of the rent for such occupancy. A hotel may not claim a credit
or refund for taxes paid to a telecommunications provider on that portion of
the service that has been furnished to guests. Charges on a per-call basis for
local and intrastate telephone calls are not considered incidental to hotel
occupancy, but are taxable under section
1105(b) of the Tax Law. A
hotel may claim a credit or refund for taxes it paid to a telecommunications
provider on local and intrastate telephone calls resold to guests on a per-call
basis. Charges for interstate and international telephone calls and charges for
Internet access are not subject to tax.
(ii) Charges for basic television services
(regardless of the means by which the services are provided) and charges for
the in-room use of movies, videos, or other forms of entertainment (including
separately stated charges for video games, pay-per-view movies and events,
premium channels, and other optional programming) are taxable as part of the
rent for occupancy.
(iii) Charges
for the rental of tangible personal property, such as recreational equipment,
are taxable under section
1105(a) of the Tax Law as
receipts from the sales of tangible personal property.
(iv) Charges for the safekeeping of guests'
valuables, including the use of safe deposit boxes, are taxable under section
1105(c)(4) of the Tax Law
as storage charges.
(v) Charges of
a roof garden, cabaret, or other similar facility operated by a hotel are
taxable under section
1105(f)(3) of the Tax Law.
(See section
527.12
of this Part.)
(vi) Charges for
parking, garaging, or storing motor vehicles are taxable under section
1105(c)(6) of the Tax Law.
Cross reference: See all of the sections
in this Part and articles 28 and 29 of the Tax Law for additional charges that
may be subject to tax.
(2) The following are examples of purchases
made by hotels that are subject to tax:
(i)
fuel, gas, electricity, steam, basic telephone (not billed on a per-call basis)
and telegraph, and other utilities;
(ii) furniture and appliances used in guest
rooms and elsewhere at the hotel;
(iii) soap, paper products, and other
supplies used in the operation of the hotel; and
(iv) items of tangible personal property that
will be used by occupants for recreational purposes, such as golf carts, pool
chairs, or other recreational equipment, provided these items are not
exclusively rented to occupants.