Monthly Rental Exemption
Only in the following cases will a deduction for tax exempt monthly rentals be allowed:
- When a room in a hotel, motel, or bed and breakfast inn is occupied (or paid for) by the same occupant for more than 30 consecutive calendar days. Occupant may be defined as any individual, company or other group or combination acting as a unit.
- When a room is being paid for on a monthly rental basis (commonly payable in advance, subject to a month to month lease, not subject to refund if the initial occupancy is less than one month, etc.). This would include the month of February, i.e., if an occupant leases a room for the entire month of February, paying a monthly rate, a deduction for monthly rental shall be allowed.
Explanatory Discussion, Examples
This exemption will be applied incrementally, i.e., one room at a time. In other words, to use the exemption for two rooms you must have two rooms occupied (or paid for) by the same occupant for more than 30 consecutive days.
There is no room for variability within this rule. As occupant must occupy or pay for all rooms listed as exempt for each of at least thirty-one consecutive days.
This rule will not allow unlimited use of tax exempt status for an entity such as an airline or trucking company that simply uses a large number of rooms at a hotel on a variable basis. This amounts to a volume discount, and has never been the intent of this exemption. If an occupant guarantees a minimum number of rooms for a thirty-one consecutive calendar day period, and pays for rooms not occupied during that thirty-one consecutive calendar day period, the hotel will be allowed this deduction or minimum number of rooms guaranteed.
For example, if an occupant rents (or pays for) 10 rooms for 31 consecutive calendar days: 31 days X 10 rooms X room rate is the allowable deduction for 31 days. However, if an occupant rents 2 rooms for 11 days, 18 rooms for 10 days and 10 rooms for 10 days during the same period: 2 rooms X 31 days X room rate is the allowable deduction. In both cases 310 rooms were rented during the same 31 day period, however, the minimum rooms occupied during the 31 consecutive calendar days is the standard by which the exemption is allowed.
Transient Lodgings Tax not collected, due to operator error, is to be remitted to the City by the operator. In addition, tax collected in error that is not refunded to the occupant is also to be remitted to the City by the operator.
Adopted: February 1990