Information Guide

Identifying Information:Hotel/Motel Self-Audit Fact Sheet
Tax Type:Kansas Retailers' Sales Tax
Brief Description:Hotel/Motel Self-Audit Fact Sheet
Keywords:
Approval Date:11/15/2011


Body:
KANSAS DEPARTMENT OF REVENUE
AUDIT SERVICES
HOTEL/MOTEL SELF-AUDIT FACT SHEET



Hotels/Motels

Hotels/Motels

The taxability of sales and purchases of tangible personal property and labor services by Hotels and Motels are summarized below. This list is not all-inclusive.

Purchases by Hotels / Motels:
Kansas sales or compensating use tax applies to those purchases identified or designated as taxable in the chart below. The applicable Kansas sales or Kansas consumers’ use tax must be paid to the vendor or accrued and remitted directly to the Kansas Department of Revenue. Purchases from Kansas vendors may be reported using the retailers sales tax return. Purchases from outside this state which are delivered to this state are to be reported on the Kansas consumers compensating use tax return.

Purchases for use
Beds, mattresses, mattress covers, bedding, pillows, pillow covers, blankets, sheets and comforters. Curtains, drapes, mirrors, dressers, carpet, coffee makers, toasters, microwaves, refrigerators, luggage racks and carts, alarm clocks. Televisions, DVD players, telephones. Shower curtains, towels, robes, hair-dryers, door knob hangers, ice tubs, glassware and wastebaskets, guest receipts, key cards.
Taxable
Air-conditioners, water heaters, exercise equipment, ice machines, bathtubs, sinks, pool tables, swimming pool chemicals, countertops, toilets, vacuum cleaners and cleaner bags, dishwashers, ovens & stoves, washers, dryers, freezers, silverware, plates, linens
Taxable
Cable television subscription services
Taxable
Premium cable channels, special events and video games billed separately to customers (taxable if not billed to customers)
Exempt
Furniture and fixtures, including but not limited to: desks, lamps, tables, chairs, shelving, plants, planters, artwork, signs
Taxable
Disposable items that are provided free of charge to guests in rooms include; candy, facial tissue, in-room coffee, laundry bags, lotions, shampoo, soap, cups and toilet tissue. These items are an ingredient or component part of a taxable product or service.
Exempt
Complimentary items to hotel room paying guests. An Ingredient or Component Part Exemption Certificate must be provided to your vendor.
Exempt
Items purchased for resale such as gift shop and newsstand items.
Exempt
Janitorial supplies
Taxable
Uniforms, aprons, smocks, name tags, etc.
Taxable
Repairs and maintenance to existing buildings, and existing covered structures.
Taxable
Plumbing, wiring, cabinets and other installation and repair services
Taxable
Laptop and desktop computers, copiers, printers, fax machines, calculators and other similar equipment
Taxable
Pest control materials and supplies
Taxable
Educational materials, posters, maps or other literature
Taxable
Business cards, office supplies, paper, toner cartridges, etc.
Taxable
Motor vehicles and accessories. Maintenance/repair of motor vehicles and accessories.
Taxable
Printed materials production and distribution (such as direct mail items)
Taxable
Security systems monitoring service
Exempt
Canned Software and software upgrades and labor services to modify, alter, update or maintain software.
Taxable
Custom software, custom software upgrades and labor services to modify, alter, update or maintain customized software.
"Custom" software = software developed for a single end user.
Exempt
Newspaper and magazine subscriptions
Taxable
Advertising in newspapers, radio, television, etc.
Exempt
Security cameras and other security equipment purchased
Taxable
Promotional items including but not limited to: calendars, mugs and items of clothing
Taxable
Tangible property to be given away or donated. (Items that are given away or donated to a tax exempt entity are not subject to sales tax as of April 2007)
Taxable
Utilities including but not limited to electricity, gas and water used in common areas such as hallways, offices, swimming pools, exercise rooms, saunas, parking lots, in house laundry facility, and any other area that is not rented as a guest sleeping room.
Taxable*
Utilities, electricity, gas, water or heat that is used in the taxable sales of sleeping room rentals, laundry services of clothing for others and amusement. Exemption falls under Consumed in Production and requires a utility study, form ST-28B, to be completed to determine the exempt percentage.
Exempt*

CONTINUED ON BACK
Purchases for use continued:
Parts and labor services of repairing, servicing, altering or maintaining tangible personal property such as; building maintenance, carpet installation, elevator maintenance, remodeling, painting, wallpapering.
Taxable
Warranty or service agreements for tangible personal property such as, computers, printers, copiers, security equipment, etc.
Taxable
Professional services such as legal or accounting services
Exempt
Telephone answering services
Taxable

* More information regarding utility exemptions can be found in Pub KS-1540, Business Taxes for Hotels, Motels and Restaurants starting on page 10.


The taxability of sales of tangible personal property is summarized below. This list is not all inclusive. The applicable sales tax must be collected unless the purchaser provides a valid exemption certificate*.

Sales by Hotels / Motels
Total gross receipts received from the rental of rooms at a hotel, motel, bed & breakfast, cabin camp or any other type of lodging unit with at least 4 sleeping rooms. The rental of sleeping rooms is subject to sales tax regardless of the length of stay.Taxable
Rooms rented through an accommodation broker.Taxable
Rental of non-sleeping rooms such as ballrooms; banquet, meeting or reception rooms; office space, etcExempt
Fees charged for items such as roll-away beds, additional person in room, cleaning or damage, deposits when the facility retains the deposit.Taxable
Fees charged for shuttle or transportation, returned checks, parking, faxing documents, internet and computer connection use.Exempt
Fees for the use of equipment, health club fees, telephone charges, lock-out fee, lost key fee and photocopy fees, safe boxes located in room.Taxable
Deposits that are returned to the customer.Exempt
No show revenues even if guest never takes possession of the room.Taxable
Rooms rented by direct purchase of a tax exempt entity**.Exempt
Charges for admissions to amusement, entertainment or recreation (such as cover charges)Taxable
Retail sales of items from a gift shop, newsstands, vending machines, minibar or pantry.Taxable
Coin operated laundry.Exempt
Rental or lease of tangible personal property.Taxable
Charges for dry cleaning and laundry services, in-house or out (environmental surcharge also applies to dry cleaning)Taxable
Charges for catering services, food service equipment rental, flatware, china/place settings, linen rental, audio visual equipment rental, table and chair rental, servers, bartenders, mandatory gratuities, etc.Taxable
Charges for premium cable channels, special events and video games.Taxable


** Sales/rentals to exempt entities with proper exemption certificates provided are exempt from sales tax, but not Transient Guest tax. Ensure the exemption certificates are retained to substantiate all non taxed transactions.

Note: Kansas tax applies to the “gross receipts” from the sale of taxable goods or services in Kansas. Gross receipts include any amounts collected from the customer including any charges billed for freight, delivery or special handling.

Transient Guest Tax
A ‘hotel’ (not located within a Redevelopment District) is defined as an establishment having ‘more than 2 bedrooms’. A hotel, motel, tourist court or any other establishment renting out a minimum of 3 sleeping rooms within a city or county that has imposed a Transient Guest Tax must collect and remit this tax on its room rentals for 28 days or less. Please refer to Revenue Ruling 19-2010-04 for more information about Transient Guest Tax.



Date Composed: 07/06/2006 Date Modified: 02/24/2012