I sincerely hope that what I share with you today changes the way you think about state sales taxes, city sales taxes, resort taxes and rental fees charged by some states.
To many people make decisions about whether they will pay "sales taxes" on certain income items after intellectulizing about whether taxes are justified and fair.
We have housekeeping fees, insurance fees, resort fees, credit card fees, limosine fees, stock the refrigerator fees, etc. Are fees just a disguise in charging guests a higher room rate?!
The first thing that is important when it comes to sales & use taxes is that every dime you collect must be paid to the authorities in state, city or town. The authorities take this VERY serioiusly and the consequences are severe.
Each of these taxing agencies clarifies what is and what isn't considered a sales taxable transaction. If you have questions you can call them.
I think my experiences over the past 25 years are important to share.
(1) I was audited a number of times and each time received NO CHANGE from the auditor and
(2) in all the years I've served guests (over 4 million) I never once had a complaint or question from a guest about how much we charged them in sales taxes. NEVER.
I have always err'd on the side of caution. "If it looks like a duck"..... I charge and pay sales taxes on it. i.e. - resort fees, etc.
What we all know is that a hotel or vacation rental "resort fee" is nothing more than a way to raise your rate! We can say its for wifi, pool towels or a variety of things... but it is in fact a raise of our rate.
Unlike the hotel and condo hotel business, in vacation rentals it is customary to charge housekeeping fees.
The average one-time housekeeping fee collected in the southeast US is $150 to $300 per reservation for one cleaning. We usually pay $50 to $100 for this service.
That's a substantial profit. Should any portion of the charged housekeeping fee be subject to sales taxes?!
My only comment is, if you are unsure, (1) call the authorities or (2) apply, collect and pay the government the tax.
The fact is that if you are audited and the auditor determines that you have not collectd and paid taxes YOU will be responsible to pay those taxes out of your profits.
In conclusion and to reiterate, in 25+ years I never received a complaint from either a guest or government agency regarding sales taxes. Err on the side of caution.