FALL 2015 California Hotel & Lodging Association 9 fees.” Another suggestion is: “taxes, assessments, and surcharges.” Important Note: Aside from issues of providing adequate and timely disclosure of all mandatory fees and surcharges, boutique hotels (and all other transient lodging operators) need to keep in mind that many, if not all, of the mandatory fees and surcharges that they charge guests can be subject to local hotel taxes (ToT). When hotels started “unbundling” their room rates and separately charging for many items and services that had previously been included in the room rate, many cities and counties in California (and across the country) realized that they were losing a lot of TOT revenue. As a consequence, many local tax authorities took the position that all revenue that hotels collect from its guests that is in any way related to the fact that the guests are staying in guest rooms is subject to local TOT. This includes revenue items such as: guest parking fees, fees for in-room movies, fees to use in-room internet connections, fees to use the fitness room, fees to get/send faxes or packages, “resort” fees, “amenity” fees, and fees to use the golf course (if the course is only open to guests), guaranteed no-show revenue, and similar items. in some cases, local tax authorities have applied the TOT to comp rooms and to employee-rate rooms. It is obviously important for each lodging operator to know exactly what its local tax authority includes in its TOT. Failure to pay ToT on such add-ons can result in substantial liability: tax authorities can go back three years to collect unpaid ToT, along with penalties and interest. CH&LA and CABBI members with questions on this topic are free to contact our Member Legal Advisor, Jim Abrams (jim@calodging.com).
CH LA Lodging News Fall 2015
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