LR 8194
Taxation of Hotel Rooms where Individuals Reside more than 30 Days
June 01, 2022
Dear Applicant:
This is a letter ruling issued by the Director of Revenue under section 536.021.10, RSMo, and Missouri Code of State Regulations 12 CSR 10-1.020, in response to your request received by the General Counsel's Office via email communication on April 7, 2022.
The facts as presented in your letter ruling request are summarized as follows:
Applicant provides hotel room rental to businesses and individuals. Rooms may be rented for periods of time up to and exceeding thirty days. Applicant receives payments from both individuals (natural persons) and businesses for its room rentals.
ISSUE:
Should Applicant charge sales tax for room rentals equal to or exceeding thirty days in duration if the rental is paid by a business instead of an individual?
RESPONSE:
No, as long as the same individual stays in the room for more than thirty days. The taxability of a room rental for a period of thirty consecutive days or more depends upon the character of the individual or individuals actually staying in that room, not upon the character of the payment.
Section 144.020.1(6) imposes a sales tax "on the amount of sales or charges for all rooms, meals and drinks furnished at any hotel, motel, tavern, inn, restaurant, eating house, drugstore, dining car, tourist cabin, tourist camp or other place in which rooms, meals or drinks are regularly served to the public."
12 CSR 10-110.220.3(B) provides that "a permanent resident is not subject to tax on their lease or rental payments. A permanent reservation for any room is not synonymous with permanent resident."
12 CSR 10-110.220.2 defines permanent resident as "an individual who contracts in advance for a room for a period of thirty consecutive days or more and who actually remains a guest for thirty consecutive days or more. Businesses do not qualify as permanent residents."
Therefore, the taxability of a room rental for a period of more than thirty consecutive days depends upon the character of the individual or individuals actually staying in that room, not upon the character of the payment. If a room is occupied by a single natural person or an identical group of natural persons for the duration of a room rental lasting thirty or more consecutive days then that rental will not be subject to sales tax - regardless of the identity of the person paying for that rental.
This letter ruling is binding upon the Department of Revenue with respect to the Applicant for three (3) years from the date of this letter and is subject only to statutory changes by the General Assembly and to changes in the interpretation of law by the courts or administrative tribunals. If a change occurs, the taxpayer who relies upon an outdated interpretation may be subject to additional taxes, interest and penalties, which may be imposed prospectively from the date of the change. For this reason, the interpretation set forth above should be reviewed on a regular basis. Please note that any change in or deviation from the facts as presented will render this ruling inapplicable.
Should additional information be needed, please contact Associate Counsel Stephen S. Krogmeier, General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475, (573)-751-0961.
Sincerely,
Wayne Wallingford