Hotel/Motel Tax: A Guide for Hotel/Motel Owners and Operators
Who is required to pay hotel/motel tax?
The Springfield City Code Chapter 70, Article V, requires hotels, motels, and tourist courts to pay a tax equal to 5% of the gross rental receipts paid by transient guests for sleeping accommodations. Since the tax is on the hotel or motel and not the customer, there are no exemptions from the tax. Each business owner makes the decision as to whether or not they pass the tax on to their customers.
How does the City Code define of hotel, motel, and tourist court?
Hotel, motel and tourist court mean any structure or building, under one management, which contains rooms furnished for the accommodation or lodging of guests, with or without meals being so provided, and kept, used, maintained, advertised or held out to the public as a place where sleeping accommodations are sought for pay or compensation by transient guests or permanent guests, and having more than eight bedrooms furnished for the accommodation of such guests.
What is a non-transient guest?
A non-transient guest is a person who occupies a room for more than thirty-one (31) consecutive days. An organization who rents a room for 32 days or more for various individuals to use does not qualify as a non-transient guest and gross receipts for the room rental are not deductible.
Are room rentals to sales tax exempt customers exempt from hotel/motel tax?
No. Since the tax is on the hotel, motel, or tourist court and not the customer, there are no exemptions from the tax. Each business owner makes the decision as to whether or not they pass the hotel/motel tax on to the customer.
Payment of tax; Deadline
Hotel/motel tax is due on or before the twentieth (20th) day of each month based on the gross daily rental receipts collected during the preceding month. Pursuant to City Code Section 70-266(a), payments received after the twentieth (20th) will be assessed a 10% penalty charge for the portion of the month remaining. For each and every month thereafter, an additional two percent (2%) of the license tax will be added until the tax is fully paid. The total penalty will not exceed thirty percent (30%) of the tax.
Payments sent through the mail must be postmarked on or before the twentieth (20th) of the month in order to avoid incurring penalty charges. Payments postmarked after the twentieth (20th), or payments delivered to the License Division after the twentieth (20th), will be assessed a penalty charge. During months that the twentieth (20th) falls on a weekend or a legal holiday, payments will be accepted, without penalty, the following business day.
Late payments; Penalties
City Code Section 70-266(a) states, “The director of finance (director) may require security in the nature of a bond, letter of credit, cash deposit, or other similar security in the amount of the estimated monthly payment from any person who has been delinquent in the payment of the license tax more than two (2) times or by more than thirty (30) days. In addition to the penalties provided in this section, any person required to pay to the city the license tax defined in this article shall be subject to all other provisions of this chapter not specifically provided for in this section or in conflict herewith.” Therefore, a bond, cash deposit, or other similar security may be required of any hotel/motel operator who remits more than one late payment within a twelve (12) month period or who remits one payment more than thirty (30) days after the payment deadline.
In any case in which the tax, interest, or penalty is not paid when due, Section 70-266(d) allows the Director of Finance to file a notice of lien in the Greene County Recorder’s office naming the person liable for the unpaid tax. A lien may also be placed upon the land where the hotel/motel is located.
Download Hotel/Motel Tax Information and Payment Reports