Current through September 18, 2024
A. Hosting Platform
1. A hosting platform as defined in §
51.5 of this Part is
required to register, collect and remit both sales and hotel tax on the rental
charge to occupants for rooms and other residential dwellings.
a. Example 1: A person rents a room in their
residential home through an online hosting platform. The rentals vary from a
weekend to an entire week. Since the definition of a hotel includes residential
dwellings and no rental period exceeds thirty (30) consecutive days or one
calendar month, both sales tax as provided in R.I. Gen. Laws §
44-18-18 and
state and local hotel taxes as provided in R.I. Gen. Laws §
44-18-36.1(a) and
(b) must be added to the amount charged for
each rental period. The hosting platform is required to collect and remit the
tax.
b. Example 2: A person rents a
room in their residential house through an online hosting platform. The rental
period is for one calendar month and the occupant has a documented arrangement.
This rental is not subject to sales or hotel tax as the rental period is for
one calendar month.
B. Realtors
1. Every person advertising, managing or
operating a hotel which includes residential dwellings, motels, rooming houses
or tourist camps, or who collects or receives rents on behalf of the owner or
operator, is liable for the tax on such rentals. The tax shall be added to the
total rental charge without an allowance for any commissions or fees
received.
2. When an owner of a
residential dwelling advertises it as a short term rental (thirty (30) days or
less) through a real estate agency and is charged only an upfront fee for
advertising by the real estate agency, and the prospective tenant after finding
the advertisement deals directly with the owner and not the real estate agency,
the owner is responsible for registering and collecting both sales and
applicable hotel tax.
a. Example 1: A realtor
collects a one week rental charge of $2000 for a home rented in its entirety. A
commission of $350 is kept by the realtor. In addition, a $500 security deposit
is paid by the occupant. At the end of the rental period there are damages
totaling $300 and a cleaning fee of $100 deducted from the security deposit.
Sales and local hotel tax is due on the total rental charges paid by the
occupant calculated as follows:
(1) $2000
total rental charge (no allowance for commission) plus $300 damages plus $100
cleaning fee equals $2400 subject to both sales and local hotel tax. It is
noted that only the refunded portion of the security deposit is not subject to
tax.
(2) All taxes collected
constitute a trust fund.
C. Room Reseller. A room reseller as defined
in §
51.5 of this Part is
required to register, collect and remit both sales and hotel tax on the total
charge to occupants for room rentals. Sales and hotel taxes are calculated upon
the amount of rental and other fees paid by the occupant to the room reseller,
less the amount of tax paid by the room reseller to the hotel. The hotel shall
calculate both sales and hotel taxes upon the amount of rental and other fees
paid to the hotel by the room reseller and/or the occupant.
1. Example 1: Hotel charges a room reseller
$100 for a room plus sales tax of $7 and hotel tax of $6. The room reseller
arranges for the transfer of occupancy and charges the occupant $150 for the
room, sales tax of $10.50 and hotel tax of $9. The room reseller will calculate
sales tax due as follows: $10.50 collected less $7 paid to the hotel equals
$3.50 sales tax due. Hotel tax is calculated in the same manner: $9 collected
less $6 remitted equals $3 due.
2.
Example 2: Assume the same facts as above however the occupant has additional
fees of $50 charged by the hotel. The hotel is responsible for charging and
remitting the applicable sales and hotel tax to the occupant for the additional
fees.
D. Travel
Packages. A travel package as defined in §
51.5 of this Part consisting
of a single consideration for "bundled" travel charges shall be treated as the
rental/fee for room occupancy and is subject to tax, even if the separate sale
of certain bundled travel charges would otherwise not be subject to tax.
Separately stated room occupancy charges and other travel charges are subject
to tax based on the taxability of each individual item.
