00-022
Response August 23, 2000
REQUEST LETTER
Dear Kerry,
RESORT
Resort has proposed the construction of a #### unit commercial condo hotel in
CITY. Their proposal will allow owners
of a unit to utilize the unit for 28
days a year, after 28 days they would be subject to a rental fee.
We
request a determination by the Utah State Tax Commission as to whether the
rents received from these units for the balance of the year will be subject to
the transient room tax. The developer
of the project supports the collection of a transient room tax.
If
you have any questions with regards to his request, please call the City office
at #####.
RESPONSE
LETTER
August
23, 2000
RE: Applying Transient Room Tax to Rental Fees Charged by ACondo Hotels@
Dear NAME,
You
have requested a determination from the Tax Commission concerning a particular
company=s proposal to build and operate a Acondo hotel@ in
CITY City. You specifically ask if the
rents paid to purchase accommodations in the condo hotel would be subject to
Utah=s Atransient room
tax.@ The purchase
of accommodations in CITY City, besides being subject to sales tax, is subject
to two separate transient room taxes, the transient room tax imposed under Utah
Code Ann. '59-12-301 and the municipality transient room tax
imposed under Utah Code Ann. '59-12-352.
Section
59-12-301(1) (a) provides that a county may elect to impose a transient room
tax on Athe rent for every occupancy of a suite, room, or
rooms on all persons, companies, corporations, or other similar persons, groups,
or organizations doing business as motor courts, motels, hotels, inns, or
similar public accommodations.@ COUNTY County has elected to impose the
transient room tax on all such rents occurring in its county, which includes
those that occur in CITY City. Utah
Admin. Rule R865-19S-96(B) provides that A[t]he
transient room tax shall be charged on the rental price of any motor court,
motel, hotel, inn, tourist home, campground, mobile home park, recreational vehicle
park or similar business where the rental period is less than 30 consecutive
days.@
Section
59-12-352(1)(a) provides that A[t]he governing
body of a municipality may impose a transient room tax on the rents charged to
transients occupying public accommodations in an amount that is less than or
equal to 1% of the rents charged.@[1] CITY has
elected to impose the municipality transient room tax on all purchases of
accommodations occurring within city boundaries.
From
your description of the condo hotel=s
proposed operations, we assume that the condo hotel will sell an equity
ownership in each of its units that allows the Aunit owner@ to use that unit 28 days a year. Any other occupation of that unit would be
subject to a rental fee charged and collected by the condo hotel. This rental fee would also be charged to any
Aunit owner@
after that owner has utilized the 28 days of occupancy associated with his or
her equity ownership. If the rental
period is less than 30 consecutive days, such rental fees are of the type
subject to the transient room tax under Section 59-12-301 and Rule R865-19S-96
and the municipality transient room tax under Section 59-12-352. Of course, should the rental period be for
30 consecutive days or more, such rental fees are not subject to taxation. Under this circumstance, neither the sales
tax, the transient room tax, nor the municipality transient room tax would be
charged on the rental fee.
If
you have any other questions or if we can assist you in another matter, please
contact us.
For
the Commission,
Marc
B. Johnson
Commissioner