Lodging Tax Imposition
Lodging taxes are typically ad valorem taxes (levied as a percentage of value) applied to charges for overnight stays at hotels, motels, roominghouses, bed-and-breakfasts, cottages, cabins, campgrounds, and other lodging accommodations for fewer than 30 consecutive days. States authorize the imposition of lodging taxes, except in home rule cities.1 States may tax lodging as a part of a broad-based sales and use tax, a specific lodging tax, or both. State legislation defines the tax base, determines who is exempt from the lodging tax, and establishes collection procedures. States and municipal governments may distribute lodging tax revenues to their general funds, special revenue funds, or to local governments and special districts. Certain state and local governments also impose excise taxes on lodging, which are levied at a fixed amount per unit, such as $1.00 per night for the furnishing of a hotel room. State and local excise taxes on lodging accommodations are noted throughout this study, but are not factored into the lodging tax rate for a particular state or municipality. Although this report uses the term lodging tax, other frequently used names for the same type of tax include: hotel tax, room tax, bed tax, transient occupancy tax, transient guest tax, transient accommodations tax, occupancy tax, lodger’s tax, or hotel/motel tax.
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