006.05.08 Ark. Code R. 004-GR-8

Current through Register Vol. 49, No. 9, September, 2024

Rule 006.05.08-004-GR-8 - SERVICES SUBJECT TO TAX-LODGING:

A. The service of furnishing rooms, suites, condominiums, townhouses, rental houses or other accommodations to transient guests by hotels, motels, apartment hotels, lodging houses, tourist camps, hunting lodges, tourist courts, bed and breakfast properties, property management companies or any other provider of accommodations to transient guests is subject to gross receipts tax.

1. "Transient guests" are defined as those who rent accommodations other than their regular place of abode on less than a month-to-month basis.

2. "Month to month" means a rental that satisfies the following criteria:

a. Rental payments are due in monthly installments for a monthly rental period; and

b. Thirty day notice of termination is required for either party to terminate the lease; and

c. The obligation of the renter to pay the monthly rental is unaffected by the renter's decision to leave the accommodations before the end of the monthly period (i.e. the entire month's rent is owed regardless of the renter staying at the accommodations the entire month).

3. A rental shall not be considered "month to month" if any of the following criteria are present in the rental arrangement:

a. The renter can terminate the stay without notice and obligation to pay ceases upon termination of the stay; or

b. The rental payment obligations accrue on daily or weekly increments regardless of the billing frequency.

4. Examples.

Example 1: Renter A rents a room from a hotel for a 6 month period. Renter A owes the monthly rental payment for the entire month at the beginning of each month. Renter A shall give a 30 day notice if A wants to terminate the rental prior to the end of the 6 months. Renter A is not a transient guest and the rental is not taxable.

Example 2: Renter B pays daily. Renter B occupies the rented accommodations for a period of 34 days. Renter B does not pay, and is not obligated for the payment of days other than the 34 days of occupation of the accommodations. Renter B is a transient guest, and tax should be collected on the daily charges.

Example 3: Renter C is staying at the accommodations indefinitely. Renter C pays the bill at the conclusion of each month. Renter C's bill accrues daily charges. Renter C can leave the accommodations at any time. Renter C is a transient guest and tax should be collected on the entire term of the rental even though Renter C occupied the accommodations for longer than 30 days.

Example 4: Renter D company has a contract calling for the rental of a certain number of rooms on an annual basis. Different people stay in the rooms each night and different rooms within the hotel are used for this purpose. The company is not a transient guest and tax is not required to be collected on the rental charges.

C. Any complimentary items provided with the accommodations that are used or consumed by the transient guests are subject to tax when purchased by the provider of the accommodations. Examples include, but are not limited to, complimentary food, drinks, soap, shampoo, lotion, etc.

D. The rental of meeting rooms is not subject to the gross receipts tax.

006.05.08 Ark. Code R. 004-GR-8

Ark. Code Ann. § 26-52-301(3)(A)