Hotel and Motel Occupancy

Welcome to the latest installment of our blog “What are the rules for NYS Sales tax for my profession?”  In this blog we are highlighting another industry with a few of the broad guidelines to follow!  Our hope is to not only provide helpful information for the business owners, but the consumers as well!

This blog focuses on Hotel and Motel Occupancy.

The term hotel includes: hotels, motels, inns, and bed and breakfast establishments.

Hotel occupancy is the use, or right to use, a room in a hotel.  The room rate, that everyone hates to pay, is the amount that guests must pay to stay in the hotel room.  The room rate is taxable at the full state and local sales tax rate.

If you stay in a hotel in New York City there is an additional hotel unit fee that hotels must charge. The hotel unit fee is an extra $1.50 per unit per day, in addition to state and local sales tax.  This fee is separately stated on the invoice that customers receive.  Certain localities charge a bed tax, which is also shown separately on the customer's invoice.

 

There are certain charges that do not require sales tax to be collected.  These charges are as follows:

•  Cancellation fees are not taxable because the customer never has the right to occupy the room.
• Hotel guests that are permanent residents do not have to pay sales tax on their room rates.  A permanent resident is when a guest must stay in the hotel for at least 90 consecutive days without interruption.
• A complimentary room does not require any sales tax due.  This is because the hotel is allowing the guest to stay in a room for no charge.

This is just a brief overview of the sales tax laws regarding hotel and motel occupancy.  Feel free to give our office a call for more information.

By Renee Greenspan

Improving Your Residence

Improving Your Residence

When tax time rolls around, we often hear from clients that they “did work to their home and that must be good for their taxes, right?”  Well…

Much of the improvement you do to your home is good from a tax perspective, but you won’t see an immediate tax benefit (except for solar discussed below).  Major home improvements like additions, new windows or exterior doors, new roof or siding, HVAC, kitchen or bathroom updating, or landscaping will increase the cost basis of your home.  This is important when you sell the home for a profit that exceeds the primary residence exclusion which is currently $250,000 for single or married filers filing separately, and $500,000 for married taxpayers filing jointly.  In order to calculate your basis in the home when you sell, you should keep your closing documents from the home’s original purchase, along with all documentation relating to the improvements you make over the years.

Qualified energy improvements are still eligible for a federal tax credit in 2018.  The Bipartisan Budget Act of 2018 signed into law in February 2018, extended the tax credit for residential energy property for qualified solar electric and solar water heating property through 2021.  The credit for 2018 is equal to 30% of costs including labor cost for installation.

Honorine M. Campisi, CPA