What historical time-and-payment test did superseded Revenue Ruling 03-007 use for long-term hotel occupancy?

Superseded guidance

Revenue Ruling 07-003 expressly withdrew and superseded this ruling. Its test is historical only.

The replacement ruling rejected time and payment method as controlling and instead required a facts-and-circumstances inquiry into a natural person's use of qualifying hotel accommodations as a permanent home.

Former time-and-payment rule

This 2003 ruling treated a guest as permanent when the guest engaged lodging, paid monthly, and remained for two consecutive months. Under that former rule, tax generally stopped with the third month.

If a binding contract entered at the start obligated the guest to occupy and pay for the room for at least two months, the ruling also excluded the first two months. Nontaxable treatment continued only while payments remained uninterrupted and occurred no more often than monthly.

Daily, weekly, or other more-frequent payment did not qualify, even when the stay exceeded two months.

Former business-contract rule

The withdrawn ruling extended its permanent-guest treatment to rooms contracted and paid for by businesses or institutions. It allowed changing occupants if the contracted number of rooms was set aside nightly and paid for regardless of actual use.

Revenue Ruling 07-003 later rejected corporate contracting and rotating occupants as sufficient for permanent-residence treatment.

Common questions

Q: Is the two-month test still stated as the Department's rule in this ruling?

A: No. Revenue Ruling 07-003 withdrew it.

Q: What did this ruling formerly say about tax in month three?

A: It generally excluded tax beginning in month three for qualifying monthly-paying guests.

Q: Did it formerly cover rooms contracted by businesses?

A: Yes, but the superseding ruling changed that analysis.

Q: Which page contains the replacement rule?

A: Louisiana Revenue Ruling 07-003.

Citations and references

• La. R.S. 47:301(6), (8), and (14)(a)
• LAC 61:I.4301(C) — former permanent-guest test discussed in this ruling
• Louisiana Revenue Ruling 07-003 — withdrawing and superseding authority
• LAC 61:III.101.C — Revenue Ruling authority and reliance statement

Source

• Landing page: Louisiana Department of Revenue Policies
• Original PDF: LA Revenue Ruling 03-007

Original ruling text

Revenue Ruling
No. 03- 007
Sales and Use Tax
December 8, 2003
State Sales Taxability of Hotel Rooms Occupied by Long-Term or Permanent Guests

The purpose of this Revenue Ruling is to discuss the department’s position concerning the sales
taxability of charges for hotel room occupancy, where guests occupy rooms permanently or for
extended durations. The Ruling will discuss the taxability of room occupancy charges in scenarios
where natural persons pay for and occupy rooms themselves, and scenarios where businesses or
institutions engage and pay for rooms on a long-term basis that are not necessarily occupied each night
by the same natural persons.
Louisiana Revised Statute 47:301(14)(a) defines the services that are subject to the tax to include the
furnishing of sleeping rooms, cottages, or cabins by hotels. The term "hotel" is defined at R.S.
47:301(6) to include any establishment engaged in the business of furnishing sleeping rooms, cottages,
or cabins to transient guests, where such establishment consists of six or more sleeping rooms,
cottages, or cabins at a single business location. Article 61:I.4301(C) of the Louisiana Administrative
Code provides that a guest who engages his lodging and pays his bills on a monthly basis and who
remains as a guest for two consecutive months is considered to be a permanent guest and not transient.
Guests who pay their bills on a daily, weekly, or other basis more frequent than monthly are not
eligible to be considered permanent under LAC 61:I.4301(C), even though the duration of their stays
might extend to longer than two months.
When a hotel establishes that a guest is permanent under the above criteria, the Louisiana sales tax is
not due beginning with the third month of the guest's occupancy of the hotel room. The tax shall be
payable for the first two months' occupancy of the room. An exemption is however, allowed on the
first two months of the guest's stay if there is a binding and enforceable contract between the hotel and
its guest entered into at the beginning of the occupancy, under which the guest is obligated to occupy
and pay for the room for a minimum of two months. The payments for the use of the hotel room shall
continue to be non-taxable as long as there is no break in the guest's payments for the occupancy of the
room and payment for the room is made no more often than once a month.
The exemption for permanent guests shall apply not only to rooms that are paid for and occupied by
natural persons, but also to rooms that are paid for and occupied at the direction of businesses and
other "persons" as defined at R.S. 47:301(8), such as airlines, trucking companies, shipping lines, and
others who enter into long-tem contracts with hotels for the occupancy of hotel rooms by their
employees. The rooms can be occupied during the minimum two-month rentals at the direction of the
persons responsible for the bills by the same or by changing occupants, provided that the requisite
number of contracted rooms, not necessarily the same rooms, are set aside each night for the duration
of the rental periods, and are paid for regardless of use or non-use.
Questions concerning this matter can be directed to the Taxpayer Services Division at (225) 219-7356.
Cynthia Bridges
Secretary
By:

Raymond E. Tangney
Senior Policy Consultant
Policy Services Division

A Revenue Ruling is written to provide guidance to the public and to Department of Revenue employees. It is
issued under Section 61:III.101(C) of the Louisiana Administrative Code to apply principles of law to a specific set of
facts. A Revenue Ruling does not have the force and effect of law and is not binding on the public. It is a statement
of the department's position and is binding on the department until superseded or modified by a subsequent
change in statute, regulation, declaratory ruling, or court decision.