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Georgia Hotel Tax

**Please click here to download a sign to place in your lobby, alerting guests of this new tax.**

Background

In order to pay for a transportation and infrastructure improvement project, which is Governor Deal’s top priority, a select group of legislators decided on a $200 million hotel tax to help pay for the it. This tax will be paid for through an additional $5 per-night charge on hotel/motel rooms; as of July 1, 2015, this tax has gone into effect. There was no public notification, no communication with the lodging industry and little to no floor debate.  The decision was made behind closed doors and in the middle of the night.  The maneuver caught the entire tourism industry by surprise, as there was never any indication that hotels could be targeted as a source of funds for this massive government scheme. 

AAHOA’s Response

Since the law was passed, AAHOA and our industry partners have been engaged with state elected officials, agency leaders and the lodging community to determine how the law will impact our members.  Our recent Town Hall meeting in Atlanta was very helpful and provided some exceptional insights into how we can handle the issues moving forward.  

Since that meeting, AAHOA has contracted with The Hudson Group, one of the leading lobbying firms in the state, to represent AAHOA and our members with the executive branch and state legislators.  Brian Hudson has an excellent track record of success in advocating for his clients at the state level for nearly two decades and Ronnie Chance is the former Senate Majority Leader and remains a highly influential figure in the Capitol.  In addition to AAHOA President and CEO Chip Rogers, this team will help to drive AAHOA's message to ensure our voices are heard and our perspective is respected. 

One of the first orders of business since retaining The Hudson Group, was to reach out to the Georgia Department of Revenue (DOR).  In order to implement the law, the DOR developed a set of rules to facilitate the administration and collection of the new fee.  While AAHOA remains opposed to the fee and strongly believe it will have adverse impacts on the lodging industry, small businesses and the economy, we understand we are responsible to help our members follow the law, until we can help make changes during the next legislative session.

After the State released their proposed rules, we reached out to members in Georgia and our industry partners to discuss how the rules will affect the industry and the ease of implementation.  We realized that certain aspects of the rules would be confusing or misunderstand how the lodging industry works.  We took the following steps to address these concerns:

Submitted a formal comment outlining AAHOA's concerns

  1.  Arranged a direct meeting between AAHOA representatives and counsel and key decision makers at the Department of Revenue
  2. Testified on behalf of AAHOA members before the Revenue Commissioner at the public hearing

Based on the feedback from AAHOA members and our efforts meeting with the key decision makers, they changed the regulations in several important ways.  Linked here are newly drafted regulations and AAHOA formal comment.

Below is also a summary of the significant issues covered by the new rules.  Please be sure to read all of the rules in their entirety and understand how the regulations will affect your business, your staffs and your operations.

We are working diligently in the next phase of our advocacy efforts to ensure AAHOA members' voices are heard in the Georgia State Capitol.

Imposition

Innkeepers must charge customers a state hotel-motel fee of $5.00 per night.  If the innkeeper neglects, fails or refuses to collect the fee, the innkeeper is liable for the fee.

Date of Imposition

The fee applies to rooms rented on or after July 1, 2015, for which payment is presented on or after July 1, 2015.  Therefore, even if rooms were booked before the new law came into effect for a stay on or after July 1, 2015, and if the customer pays for the room during his stay, hoteliers are responsible to collect the fee and remit it to the state.  If customers booked the room and paid for it prior to July 1, 2015, they are not liable for the fee.  Note, the new fee does not impact extended stay customers who have been renting rooms for 30 days prior to July 1, 2015.  For example, if a customer checks into a hotel on June 1, 2015 and checks out and pays for her stay on July 2, 2015, the customer does not owe the fee on her stay because: (1) the fee was not in effect for June; and (2) the customer became an extended stay occupant on July 1, 2015 - and extended stay occupants are exempted from the fee.

Liability of Innkeepers and Third Parties

Generally, it is the hotelier's responsibility to collect the fee from customers and remit it to the state.  If the hotelier "neglects, fails or refuses to collect the state hotel-motel fee," he "is liable for the fee." 

It is very important to note however, that the state DOR listened to our concerns regarding OTAs and booking agents.  Under the new rules, "third parties making hotel reservations on behalf of hotel customers must remit all state hotel-motel fees collected by the third parties."  If a third party has a contract with an hotelier to collect the state hotel-motel fee however, the DOR may hold either the third party or the hotelier liable for the fee.

Sales and Use Tax Base

If the hotel-motel fee is separately itemized on a guest's bill, it is excluded from the sales price of the room for purposes of calculating the sales and use tax.

Exemptions and Exclusions

 The hotel-motel fee does not apply to rooms rented by

  • The federal government
  • Foreign diplomats
  • Student housing (under contract with a school, and no linens or customary hotel services are provided)
  • Special care facilities registered with the state that provide care to the elderly and infirm
  • Rooms used by the hotel for hotel services such as, quality assurance inspectors, on duty managers, events teams
  • Complementary rooms
    • Hotel employees (must be included in employee's wages for federal tax purposes)
    • Negotiated as payment for vendors (e.g. musicians, photographers)
    • Rewards points (when the hotel receives consideration from a fund or third party)
    • Additional nights to guests who purchase a specific number of nights

Extended Stay Rentals

Generally, extended stay rentals (30 days or longer) are exempted from the fee.  However, the first 30 days are subject to the fee.  Once a rental becomes an extended stay on the 31st day of continuous rental, the fee no longer applies.  The customer must actually rent the room and must actually pass the 30 day mark in order for the exemption to apply.  Note, the new fee does not impact extended stay customers who have been renting rooms for 30 days prior to July 1, 2015.  If a customer checks out from one property, the clock begins anew. 


Returns

Innkeepers must report and remit the state hotel-motel fee electronically on a separate return on or before the 20th day of each month following the month of collection.  The returns will be ready for review on July 15, 2015 at the Georgia Department of Revenue's website. 

If you may have any questions, please contact AAHOA's Vice President of Government Affairs, Chirag Shah, at (202) 507-6151 or via email at chirag@aahoa.com.