|
Hotel room rentals not eligible for the Ohio Sales Tax Holiday - State issues updated guidance after input from OHLA
Hotel & lodging businesses should revise preparations for possible exemptions from sales tax for consumers to include only food consumed on the premises where it is sold, and not hotel room rentals.
Hotel rooms
The Ohio Department of Taxation has revised its guidance to hotels today and now confirms that hotel room rentals will not qualify for the exemption from sales tax during the sales tax holiday starting July 30.
The Department had confirmed to hotel businesses calling its information and customer service phone lines and to OHLA on Friday that hotel room rentals would be included in the holiday. This guidance is now CHANGED and the Department confirmed in writing today to OHLA they will not include hotel room rentals in the sales tax holiday.
The Department has considered input from OHLA and confirmed in updated guidance that hotel room rentals cannot be included in the holiday because such transitions do not involve the sale of tangible personal property as required by the sales tax holiday statute in Section 5739.01(UUU).
The reason that hotel rooms were initially expected to be included is because the carve out for services that are not included was only for those services enumerated in Ohio Revised Code Section 5739.01(B)(3). That long list of services does not include hotel room rentals, which are listed by themselves in Section 5739.01(B)(2).
The department's official FAQ page states "The exemption does not apply to taxable services," and hotel room rentals are defined as a taxable service for the purpose of the sales tax, although in a different section than those included in the tax holiday statute. OHLA maintains that the intent of the law was to not include sales tax on services during the holiday.
OHLA has suggested updates to the state's official FAQ and other supplemental information to make it clear that hotel room rentals are NOT subject to the sales tax holiday. The Dept. of Taxation said the FAQ guidance would be updated.
Banquets
Hotels should also note that this year, the sales tax holiday includes "food consumed on the premises where it is sold." This would include banquet charges for food, because those are taxable and for "food consumed on the premises where it sold."
The sales tax holiday rules contain some restrictions:
- The exemption only applies up to $500 per item.
- Items that are normally sold as a unit cannot be separated into smaller amounts to qualify for the exemption.
- The exemption is not for the "first $500" of an item -- if an item is $501, the holiday exemption does not apply at all.
- Alcohol does not qualify for the sales tax holiday.
- The holiday only applies from 12 am Tuesday, July 30 to 11:59 pm Thursday, August 8.
More info
The Ohio Department of Taxation has an FAQ page for the Sales Tax Holiday here. This will be updated with specific information about hotel room rentals not being eligible for the holiday.
There is also an FAQ page about applying the sales tax here.
OHLA continues to work on producing the best possible outcomes for our members and our industry related to public policies like these. We are also working on getting additional information from the Dept. of Taxation and will issue updates. Feel free to share other questions or concerns to info@ohla.org or joe@ohla.org.
(NOTE: An early version of this alert referenced the Ohio Dept. of Insurance in the headline. The agency is the Ohio Dept. of Taxation.)
| 
