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Collecting Hotel Room Tax Is The Responsibility Of The Hotel Operator


Whenever you stay at a hotel you will need to pay hotel room tax which refers to what is known as ‘transient occupancy tax’ and which amounts to fourteen percent tax that is levied on the hotel room rates. It is up to the hotel operators to collect this tax amount which is added to the hotel bill. Once this money is paid by the guest it is the responsibility of the hotel operator to remit the hotel room tax to the Treasurer or Tax Collector.

Recover Costs Of Non-Residency

The reason why a local government imposes hotel room tax is because the government needs to recover costs of services normally linked to occupancy by non-residents. The hotel room tax was first introduced in the year 1961 and at that time the hotel room tax was six percent; which has increased considerably in the intervening years and presently stands at fourteen percent.

The revenues earned from levying hotel room tax are cyclical by nature and they do also depend to a large extent on the level of economic activity taking place including conventions and business travel as well as tourism. In some years, the government is not able to earn enough from such taxes and it will then be forced into running at a loss.

However, given the booming state of the present day tourism and hospitality industry during the nineties, revenues from hotel room tax never ever fell short of expected levels. In fact, up to the year 2001 the revenues earned from imposing hotel room tax were on the high side – so much so, that in the nineties the hotel room tax revenues almost tripled.

The downturn in economic fortunes that began towards the end of the year 2000 saw these revenues tumble as business travel as well as tourism failed to grow. The September 11 attacks too played a significant role in dampening the mood to travel and the financial year 2001-2002 saw a decline in revenues of about thirty percent. Things have not looked up ever since.

Looking for great 5 star hotel rooms is not that hard because there are a myriad of possibilities open to anyone looking for luxury stay.  Nearly every hotel in every city in America offers such rooms and the same is the case when one travels overseas.

In regard to remitting hotel room tax by the hotel operator to the Treasurer or Tax collector there are certain rules that must be followed and failure to collect these taxes will make the operator liable to the City for the entire amount of unpaid hotel room tax.


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