96-152
Response October 21, 1996
Response
September 30, 1996
XXXXX
Utah State Tax Commission
Heber M. Wells Bldg..
160 E 300 South
Salt Lake City, UT 84134
Dear XXXXX
Our organization has an opportunity to undertake some
long term temporary assignments in Salt Lake City.
This effort is expected to last about 3 months and
involve 2 - and sometimes 3 - individuals.
Needless to say, it is incumbent upon us to understand and control our
costs in this endeavor. Accordingly, we need to take advantage of
any tax exemptions, among other things, that may be available. To this end, we will contract with a local
hotel to rent two rooms for three months, with the possibility of extending
that period, should the need become apparent.
Our corporation will pay the room charges on a monthly basis, although
the individuals will be responsible for their own incidental charges.
We believe this arrangement should qualify us for an
exemption from the state tax on room charges.
However, to avoid any misunderstanding - and facilitate our negotiations
- with the hotel, we are asking you to advise if any of the following
considerations would adversely affect this exemption.
1. What is
the minimum number of nights required to be eligible for a tax exemption.
2. We may
rotate individuals on this project.
3. If an
individual goes home for a weekend, but we still pay for the unoccupied room,
do we maintain that room's exemption?
4. If,
because of variations in the hotel's occupancy level, the same room is not
assigned to that person on his return (from #2 above), does that affect our tax
exempt status?
5. Do the
local taxing authorities (if any) have the same rules governing exemptions to
their room tax - and whom should we contact?
the information you provide will be of invaluable
aid in our ability to determine the economic viability of this project. It will
be made available to the hotel as confirmation of our tax exempt status.
Respectfully,
XXXXX
XXXXX
Advisory Opinion - sales tax on hotel accommodations
Dear XXXXX
We
have received your request for tax guidance pertaining to sales tax on hotel
accommodations. We offer the following
guidance:
Utah
imposes sales tax on charges for hotel,
motel or other tourist accommodation of less than 30 consecutive
days. In some communities, an
additional transit room tax is added to the sales tax calculation.
You
have described a situation in which your company will rent two rooms for a
period of about 3 months. The length of
the rental period precludes taxation under the provisions mentioned so long as
the rental period is uninterrupted.
Your rental must be accompanied by a written agreement which specifies
the rooms rented and the room rates must be billed at a specified monthly rate
rather than accumulated daily rates.
Please
contact us if you have other questions.
For
the Commission,
Joe
B. Pacheco,
Commissioner