Which of the many services and fees a hotel or motel charges its guests are subject to Kansas sales tax, and which are exempt?

Plain-English summary

A hotel/motel operator asked how Kansas sales tax applies to the many services and fees it charges guests. The Department answered with a chart listing common hotel charges and whether each is usually taxable or exempt. The short version: room rental, food and drink, and most add-on fees are taxable; a set of ancillary services and refundable/pass-through charges are exempt.

Usually taxable (sales tax). Among the items the Department marked taxable:

• Guest room rental — taxable as sales tax (K.S.A. 79-3603(g); K.A.R. 92-19-24) and subject to the local transient guest tax (K.S.A. 12-1693). No-show revenue (room guarantees/deposits) is treated the same way.
• Food, restaurant, and room-service charges; catering — taxable (K.S.A. 79-3603(d)); catering also cites K.A.R. 92-19-69.
• Alcohol/beverage sales — taxable (sales and/or liquor tax; K.S.A. 79-3603(a), 41-2701, 41-102).
• Car rental charges (K.S.A. 79-3603(h)); amusement-activity fees and health-club privilege fees (K.S.A. 79-3603(m)).
• Incidental room fees — cleaning/damage, lock-out, lost-key, roll-away bed (K.S.A. 79-3603(g)); mandatory gratuities, photocopy charges, video games, VCR, printer rental (K.S.A. 79-3603(a)); guest laundry/valet (K.S.A. 79-3603(i)); in-room pay-per-view (K.A.R. 92-19-24(e)); telephone charges for local, intrastate, and interstate calls (K.S.A. 79-3603(b)); and vending machine sales (K.S.A. 79-3603(f)).

Usually exempt. The Department marked these exempt:

• Banquet and meeting room user fees (K.A.R. 92-19-24), parking charges, shuttle/transportation fees, massages.
• Certain office-equipment usage — fax machine usage and internet access — noted exempt (while photocopy and printer charges are taxable).
• Safe or security box charges, returned-check fees, and commissions paid to the hotel by other on-premises vendors (noted as an income-tax item, not a taxable sale).

Bottom line: a hotel's core products — the room, the food and drink, and most add-on goods and services — are taxable, and the room also carries transient guest tax; but room-and-hall rentals for events, parking, transportation, and a handful of ancillary or pass-through charges are exempt. The Department's enclosure is the item-by-item guide.

What this means for you

Hotel and motel operators

Use the Department's chart to set up your billing. Tax the room (sales tax plus transient guest tax), food, beverages, and the incidental fees the Department listed as taxable. Do not charge sales tax on the exempt items — banquet/meeting room rental, parking, shuttle service, massages, safe-box and returned-check fees, and fax/internet usage.

Watch the close calls

Some neighbors split: photocopy and printer charges are taxable, but fax usage and internet access are exempt; guest room rental is taxable, but banquet and meeting room rental is exempt. Bill by the specific line item rather than lumping "room charges" together.

Remember the transient guest tax on rooms

Guest room rental (and no-show room revenue) carries both state/local sales tax and the local transient guest tax under K.S.A. 12-1693. Those are separate impositions on the same room charge.

Common questions

Q: Is a hotel guest room taxable in Kansas?
A: Yes — twice over. Guest room rental is subject to sales tax (K.S.A. 79-3603(g); K.A.R. 92-19-24) and to the local transient guest tax (K.S.A. 12-1693).

Q: Are banquet and meeting room rentals taxable?
A: No. The Department listed banquet and meeting room user fees as exempt (K.A.R. 92-19-24), unlike sleeping-room rental.

Q: What common hotel charges are exempt?
A: Per the chart: banquet/meeting room fees, parking, shuttle/transportation, massages, fax usage and internet access, safe/security-box charges, returned-check fees, and vendor commissions paid to the hotel.

Citations and references

• K.S.A. 79-3603(g) — taxes guest room rental and related room fees (cleaning/damage, lock-out, lost-key, roll-away bed, no-show room revenue).
• K.S.A. 79-3603(a) — general imposition on retail sales; cited for mandatory gratuities, photocopy/printer charges, video games/VCR, and alcohol sales.
• K.S.A. 79-3603(d) — taxes food, restaurant, room-service, and catering charges.
• K.S.A. 79-3603(m) — taxes amusement-activity fees and health-club privilege fees.
• K.S.A. 12-1693 — imposes the local transient guest tax on guest room rental (and no-show room revenue), in addition to sales tax.
• K.A.R. 92-19-24 — the hotel/room regulation; cited for taxable guest room rental and for exempt banquet and meeting room user fees, with subsections covering pay-per-view (92-19-24(e)) and laundry/valet (92-19-24(g)).

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-2000-027

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

May 25, 2000

XXXXXXXXXXX
XXXXXXXXXXX
XXXXXXXXXXX
XXXXXXXXXXX
XXXXXXXXXXX

Re: Kansas Sales Tax

Dear XXXXXXXXX:

Your correspondence of May 1, 2000 has been referred to me for response. Thank you for your inquiry.

By your letter you ask whether a number of services you provide, and fees you charge, to customers at your hotel or motel are subject to Kansas sales tax. In response to your inquiry, please find enclosed a listing of services frequently provided to, and charges frequently imposed on, hotel and motel customers, and information regarding the tax treatment of them. I believe all of the items presented in your letter are addressed in the enclosure.

I trust this information is of assistance. If I can be of further service, please feel free to contact me.

Sincerely,

Jim Weisgerber
Attorney
Tax Specialist

JW:jw

Enclosure: Hotels / Usually Taxable – Usually Exempt

Hotels/Usually Taxable - Usually Exempt

Amusement activities fees Taxable Sales Tax K.S.A. 79-3603(m)

Banquet and meeting room user fees Exempt K.A.R. 92-19-24

Beverage sales (Alcohol) Taxable Sales and/or K.S.A. 79-3603(a)
Liquor Tax K.S.A. 41-2701
K.S.A. 41-102

Car rental charges Taxable Sales Tax K.S.A. 79-3603(h)

Catering Taxable Sales Tax K.S.A. 79-3603(d)
K.A.R. 92-19-69

Cleaning or damage fee Taxable Sales Tax K.S.A. 79-3603(g)

Commissions
(Paid to hotel by other vendors on premises) Exempt [Income Tax]

Equipment rental / usage
Office Equipment
Fax machine usage charges Exempt
Internet access Exempt
Photocopy charges Taxable Sales Tax K.S.A. 79-3603(a)
Printer rental Taxable Sales Tax K.S.A. 79-3603(a)
Other
Video games Taxable Sales Tax K.S.A. 79-3603(a)
VCR Taxable Sales Tax K.S.A. 79-3603(a)

Food sales, restaurant and room service charges Taxable Sales Tax K.S.A. 79-3603(d)

Guest laundry / valet service fees Taxable Sales Tax K.S.A. 79-3603(i)
K.A.R. 92-19-24(g)

Guest room rental Taxable Sales Tax K.S.A. 79-3603(g)
K.A.R. 92-19-24
Transient Guest Tax K.S.A. 12-1693

Health club privilege fee Taxable Sales Tax K.S.A. 79-3603(m)

In-room pay per view television charges Taxable Sales Tax K.A.R. 92-19-24(e)

Lock Out Fee Taxable Sales Tax K.S.A. 79-3603(g)

Lost Key Fee Taxable Sales Tax K.S.A. 79-3603(g)

Mandatory gratuities Taxable Sales Tax K.S.A. 79-3603(a)

Massages Exempt

No-show revenue (Room rental guarantees or deposits) Taxable Sales Tax K.S.A. 79-3603(g)
K.A.R. 92-19-24
Transient Guest Tax K.S.A. 12-1693

Parking charges Exempt

Photocopy charges Taxable Sales Tax K.S.A. 79-3603(a)

Returned check fees Exempt

Roll-away bed fee Taxable Sales Tax K.S.A. 79-3603(g)

Safe or security box charges Exempt

Shuttle or transportation fee Exempt

Telephone charges:
Hotel charge for local calls Taxable Sales Tax K.S.A. 79-3603(b)
Hotel charge for intrastate calls Taxable Sales Tax K.S.A. 79-3603(b)
Hotel charge for interstate calls Taxable Sales Tax K.S.A. 79-3603(b)

Vending machines:
Placement fees/Commissions Exempt
Sales Taxable Sales Tax K.S.A. 79-3603(f)

Date Composed: 05/24/2000 Date Modified: 10/11/2001

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