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Sales – Fees and Other Charges

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Fees and other charges by lodging facilities are taxable unless an exemption applies. See below for examples.

Taxable Charges	Examples
Admissions and fees for recreational areas and facilities For more information, see Admissions and Amusement Devices.	Campgrounds Golf courses Mini golf courses Picnic grounds Playgrounds Tennis courts Health clubs Swimming beaches and pools
Copy Charges	Charges for copies are taxable, including copies from coin-operated machines.
Equipment Rentals	Charges to rent equipment billed separately from a nontaxable meeting room. Examples include: Audio-visual equipment Computers decorations Tables and chairs
Fax charges	Charges to send a fax are taxable.
Food and beverage sales For more information, see Eating Establishments.	Restaurant Bar Room service Catering charges
Parking services For more information, see the Parking Service Providers.	Parking fees are taxable, including: “honor box” systems Valet parking Car washing services
Recreational equipment rentals	Charges to rent: Athletic equipment Boats and pontoons Canoes Paddle boats
Coin-operated entertainment and amusement devices For more information, see Vending and Other Coin-Operated Devices.	The use of all entertainment and amusement devices is taxable. Examples include: Batting cages Cranes Foosball and pool tables Jukeboxes Photo or video booths Video and pinball games Rides
Vending machines For more information, see Vending and Other Coin-Operated Devices.	The only taxable food sold through vending machines or honor boxes is prepared food, soft drinks, candy, and dietary supplements.

Gift Shop Sales

Gift shop sales are taxable, except for food, clothing, and drugs. For examples, see the table below.

Taxable	Nontaxable
Candy	Clothing
Dietary supplements	Drinks that contain 50 percent or more juice
Grooming and hygiene products	Grocery items
Magazines and periodicals	Newspapers and tabloids
Soft drinks	Over-the-counter drugs

No-Show Charges

No-show charges – for when a room was held for a customer who neither arrived nor canceled the reservation – are taxable because a sale was made.

Miscellaneous Charges

The following charges may or may not be taxable depending on the type of transaction involved. See the specific charge type for specific details.

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Damage Charges [+]

Damage charges may or may not be taxable depending on what kind of property was involved.

For Damage to:	The Charges are:
Tangible items such as equipment or boats	Taxable
Real property such as a hotel room or building	Not taxable
Combination of tangible items and real property	Taxable (The entire charge is taxable unless the nontaxable portion is separately stated.)

Telephone Charges [+]

Charges for the actual cost of a telephone call are not taxable if they are separately stated on the guest’s bill. (Because the charge from the phone company to the hotel includes sales tax.)

Charges for making the telephone service available to guests are taxable. For example, if a hotel charges 50 cents per local call, it is an access charge and it is taxable.

Telephone Call Accounting Systems

Many hotels use “call accounting systems” to track and determine the amount to charge guests for long-distance phone calls.

If you use a call accounting system, you must:

Charge sales tax on the total amount billed to a guest for their long-distance telephone service.
Pay sales tax to the telephone company for all telephone services.

Note: If you can distinguish between telephone calls billed to guests and your own administrative use, you may adjust the taxable amount reported on your sales tax return. To do this, subtract the actual costs of the long distance calls made by guests from your taxable sales.

Tips and Service Charges [+]

Voluntary Tips

Tips that a customer voluntarily leaves or adds to a credit card receipt are not taxable.

Tips and Service Charges Added by Seller

Tips or service charges a seller adds to the bill are taxable, even if the tip amount is given to employees. The table below shows which taxes apply.

Tips or Service Charges for These Items:	Are Subject to These Taxes:
Food only	6.875% state general rate sales tax Any local and special local taxes that apply
Liquor only	6.875% state general rate sales tax 2.5% liquor gross receipts tax Any local and special local taxes that apply
Food and liquor combined (see note below)	6.875% state general rate sales tax 2.5% liquor gross receipts tax Any local and special local taxes that apply

Note: If you can divide the tip or service charge to show what portion is for food versus liquor, do not collect the 2.5% liquor tax on the food portion. You must keep records showing how you determined the tax.

Guide Menu

Sales – Fees and Other Charges

Gift Shop Sales

No-Show Charges

Miscellaneous Charges