Free Pub 56, Utah Sales Tax Info for Lodging Providers - Utah

tax.utah.gov

Publication 56
Revised 1/09

This publication is provided for general guidance only. It does not contain all sales or use tax laws or rules.

Sales Tax Information
for Lodging

Providers
Utah State Tax Commission 210 North 1950 West Salt Lake City, Utah 84134 (801) 297-2200 1-800-662-4335 www.tax.utah.gov If you need an accommodation under the Americans with Disabilities Act, contact the Tax Commission at 801-297-3811, or TDD 801-297-2020. Please allow three working days for a response.

Introduction
This publication provides tax information for lodging providers. It includes Utah law and Tax Commission rules, but is not all-inclusive. Future law or rule changes may change this publication. Find general sales and use tax information in Publication 25.

2. Cities and towns may impose tax on temporary lodging of up to 1 percent. 3. Cities and towns that meet certain requirements may impose an additional transient room tax of up to ½ percent on temporary lodging. 4. Salt Lake County imposes an extra tourism tax on temporary lodging of ½ percent. Find current tax rates online at tax.utah.gov/sales/rates.html. County and local governments can choose to collect the transient room taxes themselves. If your county, city or town self-collects, you must report transient room tax directly to that locality. See tax.utah.gov/sales/rates.html for localities that self-collect. See Utah Code §§59-12-301, 352, 353 and 603.

Transient Room Tax
Amounts paid for temporary lodging are subject to both sales tax and transient room tax. Report sales tax on TC-62M or TC-62S, and report transient room tax on TC-62T. Temporary lodging is the use of accommodations in a hotel, motel, inn, tourist home, trailer court or campground (or similar accommodation) for less than 30 consecutive days. Rooms and suites not used for lodging, such as convention halls or meeting rooms, are not subject to sales tax or transient room tax. Lodging stays of 30 consecutive days or longer are exempt from sales tax and transient room tax.

Operations of Lodging Providers
Taxable Sales and Services
Purchases by lodging providers of furnishings, linens, soap, tissues, shampoos and similar items for guests are subject to sales and use tax. Lodging providers are considered the final consumers of these items. Sales or rentals of tangible personal property, such as gift shop sales, are subject to sales tax. The following table shows common fees lodging providers charge guests. Although most of the fees are subject to sales and use tax, not all are subject to transient room taxes. Transient Room Tax Taxable Not Taxable Not Taxable Not Taxable Not Taxable

Who Imposes the Transient Room Tax
Transient room tax is imposed by county and local governments. The transient room tax in a location may be a combination of the four following rates: 1. Counties may impose a county-wide tax on temporary lodging of up to 4.25 percent.

Fees Additional room service Admission to exercise facilities Cancellation Childcare charges Complimentary meals or beverages

Sales & Use Tax Taxable Taxable Not Taxable Not Taxable Not Taxable (see A. below)

Fees Concierge fee Copy charges Damage fees Dry Cleaning Energy surcharges Equipment rental Fax receiving Fax sending Front desk labor fee Groceries and related service fees (mini bar item charges) Ground transportation/transfers Guest and owner miscellaneous request items Hot tub fees Interstate telephone charges Late payment fee Laundry/dry cleaning service Lockout/lost key fee Meeting rooms No show Parking fees Pet fees Prepaid calling cards Reservation change fee Reservation fee Resort fee Rollaway bed and cribs Room charges/rentals 30 consecutive days and longer Room charges/rentals less than 30 consecutive days Safe and safety deposit box rentals Shipping charges (FedEx, etc.) Sundry items sold Telephone charges markup Tickets to ski or gain admission to events Tips for staff (mandatory) Tips for staff (voluntary tips not listed on invoice) Vending machine sales Video/movie/pay-per-view charges

Sales & Use Tax Not Taxable Taxable Taxable Taxable Taxable Taxable Taxable Not Taxable Taxable Taxable Not Taxable Taxable Taxable Not Taxable Not Taxable Taxable Not Taxable Not Taxable Taxable Not Taxable Taxable Taxable Taxable Taxable Taxable Taxable Not Taxable Taxable See B. below Not Taxable Taxable Taxable (see C. below) Taxable (see D. below) Taxable Not Taxable Taxable Taxable (see E. below)

Transient Room Tax Not Taxable Not Taxable Taxable Not Taxable Taxable Not Taxable Not Taxable Not Taxable Taxable Not Taxable Not Taxable Taxable Taxable Not Taxable Not Taxable Not Taxable Not Taxable Not Taxable Taxable Not Taxable Taxable Not Taxable Taxable Taxable Taxable Taxable Not Taxable Taxable Not Taxable Not Taxable Not Taxable Not Taxable Not Taxable Taxable Not Taxable Not Taxable Not Taxable

A. Lodging providers who offer complimentary meals or beverages are the final consumer of these items and must pay the sales tax or report the use tax on the purchase of the food. B. Safe and safety deposit box charges are subject to sales tax if the boxes are tangible personal property. The rental is not subject to sales tax if the boxes are real property. See Pub 42 for definitions. C. Telephone service providers collect the tax for local and instate long distance calls. However, any markup of these calls by lodging providers is subject to sales tax. Long distance interstate calls are not subject to sales tax. D. Sales tax is usually collected by the third-party provider (resort, theater, etc.). E. Charges for in-room movies or pay-for-view videos or games are subject to sales tax regardless of how the movie or video game is delivered to the guest's room. page 2

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Exempt Sales and Services
Charges to Owner from Manager
Charges to property owners by property managers are not subject to sales tax or transient room tax. These charges include: interstate telephone charges, housekeeping, shipping charges (FedEx, etc.), administrative labor, DSL installation, late payment fees, hot tub fees, smoking and pet fees (cost of damages pass through), commission fees, credit card fees and check-in fees for non-paying guests.

Trades or Bartering
A trade involving lodging does not create an exempt trade because lodging is not tangible personal property. Complimentary rooms are not taxable because there is no charge.

Admissions Charges
Admissions and user fees for any amusement, entertainment, recreation, exhibition, cultural or athletic activity are subject to Utah sales tax. Taxable activities include, but are not limited to, admissions and user fees for: theaters, movies, operas, museums, planetariums, shows, exhibitions, concerts, carnivals, amusement parks, amusement rides, circuses, menageries, fairs, races, contests, sporting events, dances, boxing and wrestling matches, closed-circuit television broadcasts, billiard or pool parlors, bowling lanes, golf and miniature golf, golf driving ranges, batting cages, skating rinks, ski lifts, ski runs, ski trails, snowmobile trails, tennis courts, swimming pools, water slides, river runs, jeep tours, boat tours, scenic cruises, and horseback rides.

Government
Sales to Utah and federal governmental agencies are exempt from sales tax and transient room tax if certain conditions are met. Tax exemption does NOT apply to purchases by state and local governments outside of Utah. Lodging charges are only exempt if they are paid directly by the government agency. Proof of exemption includes exemption certificates (form TC-721G), purchase orders, invoices or checks issued by government agencies. Government credit card purchases are exempt from tax if the government pays the credit card company directly. Purchases are not exempt when made with credit cards that are: 1. under the control of the employee, 2. billed to the employee, and 3. the sole responsibility of the employee (the government is not responsible if the card holder fails to pay). Utah government credit cards with the word "Purchasing" stamped across the middle are direct payment credit cards and qualify for the exemption. U.S. Department of the Interior (DOI) bureaus that centrally bill travel expenses include: Bureau of Indian Affairs, Bureau of Reclamation, U.S. Geological Survey, Minerals Management Service, Office of Special Trust, Office of Surface Mining, Office of the Secretary and National Business Center. The travel expenses of DOI bureau employees are exempt from sales tax if the employee uses a DOI Bank of America MasterCard with beginning numbers of 5568 16. The DOI credit card is embossed with the employee's name, U.S. Department of the Interior, and the DOI tax-exempt ID number. For more information about federal government credit cards, see U.S. General Services Administration SmartPay online at gsa.gov/gsasmartpay and select "Tax Information."

Exceptions
Admissions and user fees include season passes, but do not include annual membership dues paid to a private organization whose members, directly or indirectly, establish the level of the membership dues. Fees beyond annual membership dues, such as a country club's fees for use of its golf course or pool, are considered admission and user fees and are taxable. See Tax Commission Rule R865-19S-33. Amounts paid for the following activities are not admissions or user fees: · Public or private lessons · Sign-ups for participation in amateur athletics if the activity is sponsored by state government or a nonprofit organization whose primary purpose is the sponsoring and promoting of amateur athletics · Sign-ups for participation in school activities. This does not include attendance as a spectator at school activities. Fees for the above activities are subject to tax unless they are listed separately on an invoice. For example, if fees for a golf lesson are included with fees for use of the golf course, the entire amount is subject to sales tax.

Religious and Charitable Institutions
Qualifying religious and charitable institutions must have an exemption number issued by the Tax Commission. Tax is paid at the time of purchase on all amounts under $1,000, unless the institution has an exemption certificate and written contract on file with the lodging provider. If the sale is $1,000 or more, the institution may use an exemption certificate to pay for lodging without paying tax. Otherwise, all sales are taxable and the institution must request a refund of the tax from the Tax Commission (or the local government, if the local government self-collects).

Resort Packages
If a third party reserves rooms for its clients, sales tax and transient room tax are due on the rental. If rooms are discounted for the third party but not for the clients (as is often done for large groups), tax is calculated on the discounted price. If a third party (such as a hotel) arranges for ski lift passes, the ski resort must pay sales tax on the sales of the lift passes. The third party is considered the ski resort's agent. Transient room tax does not apply to lift passes. Other situations in which a third party arranges for guests to obtain taxable goods, services or admissions are treated the same way. The third party is considered the final consumer, not the third party's clients.

Monthly Rentals
Charges for stays of 30 consecutive days or longer are exempt from sales and use tax and all sales-related taxes.

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Tours
The following guidelines apply to off-road tours, outfitters and providers of similar activites: · If the tour begins in Utah, sales tax is due on the entire amount of the transaction. · If the tour begins outside Utah, the transaction is not subject to sales tax.

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Sales tax publications provide general guidance only. They do not contain all sales or use tax laws or rules. If you need additional information, call 801-297-7705 or 1-800-662-4335, ext. 7705 (outside the Salt Lake area), or email [email protected].

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