Form Pub. Ks-1540 - Kansas Business Taxes For Hotels Motels & Restaurants (Page 36 of 42) in pdf

Additional fees for special cleaning services, such as pet clean-up fees and fumigation fees for smoking in a

non-smoking sleeping room, which are not part of the normal room fee for similar guests and represent

special cleaning fees due to improper actions by the guests(s) or pet.

DISCUSSION. In general. When a hotel bills a guest for sleeping accommodations, any costs associated with providing

services to the guest's room are taxed as part of the charge for the sleeping accommodations, unless the costs are recovered

as a separately-stated line-item charge on the guest's invoice. How separately-stated charges are taxed is explained in the

lists above. A hotel may not bundle a guest's charges for a sleeping accommodation with nontaxable services, and tax less

than the total amount billed as a bundled charge.

Both transient guest tax and K.S.A. 79-2009 Supp. 79-3603(g) are imposed on hotel charges to guests for sleeping

accommodations "exclusive of charges for incidental services or facilities." Many charges are billed to a guest in accordance

with: (1) the contractual agreement between a guest and a hotel; or (2) published hotel policy. Charges billed pursuant to a rental

agreement or hotel policy almost always are directly related to a guest's right to occupy a sleeping room and are subject to both

transient guest tax and the sales tax imposed at K.S.A. 79-2009 Supp. 79-3603(g).

Separately-stated charges for cots, rollaway beds, cribs, additional bedding, and additional linens that a hotel places in a

sleeping room are taxed as charges for sleeping accommodations. These charges are subject to both transient guest tax

statutes and K.S.A. 2009 Supp. 79-3603(g). As explained above, the two impositions on "sleeping accommodations" tax

more than just the charge that gives a guest the right to occupy a sleeping room.

Cancellation vs. "no show" charges for sleeping rooms. Cancellation charges are not taxable. Since the room

reservation was cancelled, no sale occurred and no sales or transient guest tax is due. A forfeited "no show" charge is

taxable. This charge is for the guest's right to occupy a hotel room on a specific date, whether the guest arrives to use the

room or not.

Early departure charges. These charges are provided for by hotel policy or by the agreement between the guest and the

hotel. The charges are billed after a guest has occupied a room. K.S.A. 2009 Supp. 79-3603(g) and transient guest tax apply

to these charges because they are a condition placed on the guest's right to occupy the room by the parties' agreement or by

hotel policy.

Separate line-item charges for equipment placed in meeting rooms. While charges for ballrooms, banquet rooms,

meeting rooms, or office space are not subject to sales or transient guest tax, sales tax applies to separate line-item charges

for audio-visual equipment, computers, public address systems, tables, chairs, flowers, decorations, and other items that are

placed in the rooms. These are taxable rental charges.

Standard room furnishings. Some hotels charge more for rooms with televisions or telephones than for rooms without them.

Charges for standard room furnishings like televisions or telephones are taxable even when separately stated.

Telephone. Hotels are required to pay sales tax on all of the telephone services they buy. This includes charges for local,

intrastate, interstate, and international calls that are billed to the hotel, whether the calls were made by hotel guests or by

hotel employees in the course of business.

Most guests pay for their long distance calls as a prepaid or post-paid telephone services. Sales tax on these calls is

collected by the telephone service provider. Guest access to these service providers is gained by placing a local telephone call.

Charges to guests by hotels for telephone access (charges for making local telephone calls) are taxable. For example, if a

hotel charges 50 cents per local call, it is an access charge and is taxable - the phone company doesn't charge that amount

for local calls, but the hotel charges the 50 cent fee to guests for accessing telephone service.

When a hotel is charged for a guest's long distance call, the charge billed to the guest to reimburse the hotel for the cost

of the call is not taxable if the charge equals the amount that the provider billed to the hotel for the call. This charge includes

the sales tax that the provider billed to the hotel on the charge for the telephone call. Any mark-up that is added to a guest's

charge for a long distance call is taxable as an access charge.

Charges for liquor. Charges billed to a guest's room for mixed drinks containing liquor are subject to the liquor drink tax

imposed at K.S.A. 79-41a01 et seq. These charges are not subject to either sales or transient guest tax.

This ruling clarifies the department's existing policy on the application of transient guest tax and K.S.A. 79-3603(g) to

charges for sleeping accommodations. This ruling clarifies and supersedes all prior advice given in information guides that

have been issued on this subject.

Secretary of Revenue

Nick Jordan

Form Pub. Ks-1540 - Kansas Business Taxes For Hotels Motels & Restaurants Page 36

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