InView September 2010 Issue
New York State Budget Closes Loophole in Hotel Sales Tax
As of September 1, tourists visiting New York State who book hotel rooms through travel agencies and websites will be charged hotel room sales taxes for the marked up portion of the hotel room, a cost they were previously not charged according to Erik Kriss, a spokesperson for the New York State Budget Division.
A09710D/S06610C enacts into law major components of legislation necessary to implement the revenue budget for the 2010-2011 state fiscal plan. The legislation includes a clause that ensures payment of sales tax due on fees for hotel room occupancy by room remarketers of hotel rooms.
Currently, explained Kriss, travel sites buy hotel rooms at a discounted price and then mark up the price to the consumer. While the travel sites pay the sales tax on the discounted room price, no sales tax was being collected on the mark-up portion of the hotel room price. “This new legislation will make up that different. It is estimated that the state will receive $10 million in additional tax revenue for the seven months remaining in the current fiscal year and $20 million in the following year.”
The burden of compliance is on the hotel room resellers, not on the consumer or the hotel itself.
Additional Articles