How do you deal with tax exempt?

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How do you deal with tax exempt?

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In the UK - they pay me full wack then can claim the VAT (Value Added Tax) which is 20% back - however we only have to put out special VAT number on the bill - after that its their problem (its printed on their receipt)

Some do ask for me to work it out - I have a vat calculator on my computer so I put in the gross price and it works out the VAT.

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You can go to the website for your State for whatever entity covers tax revenue and you can find the guidelines.  Most guests who were tax exempt phoned me to let me know so that they would have the amount if they had to get a check for their stay from whomever.  We had several State-wide conferences here for either City or State officials, who are exempt.  Some guests were exempt from the State sales tax and some local taxes, but not hotel/motel tax.  It can be complicated, which is why it's up to the guest to supply you with the proper forms.

In my State, they must have the tax exempt form filled out & signed to give to you so that you can keep a copy in the event of showing proof to the taxing authorities.  You should definitely keep the forms on file. 

My reservation software allowed me to entered tax exempt stays and make notes about the particulars.

It took quite awhile before the State university here figured out that they were tax exempt for their "hotel" stays.  I just collected and paid the taxes as required unless someone had the forms to tell me that they were exempt.  The onus is certainly on them, not you. 

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We occasionally get Fed. Tax Exempt employees here.  They all provide me with a form, provided by the gov. agency, that includes their name and exempt #. 
Most state agencies here are not tax exempt.  Exemption of state agencies do not travel across state lines. 
Tax Exemption for Fed. employees are only for business travel.
Ministers are not exempt from paying taxes, but if the CHURCH pays for the stay - church issued card or check, it can choose to pay or not pay taxes.

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copperhead wrote:

Ministers are not exempt from paying taxes, but if the CHURCH pays for the stay - church issued card or check, it can choose to pay or not pay taxes.

That is what I mean. That is what I am saying, when they hire someone to visit as a guest speaker or whatever event and pay for the room.

Not a minister as a profession who happens to be on vacation or takes his wife to an inn for the weekend on an anniversary.

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I meant Church/Non Profit Org. 

gillumhouse's picture
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I have had a couple of those over the years - non-profits that is as I do not charge the churches in town. They have always given me a certificate of non-profit for me to copy and put in my files if I need it as proof.

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gillumhouse wrote:

They have always given me a certificate of non-profit for me to copy and put in my files if I need it as proof.

Where I live, lots of non-profits are subject to sales tax. It's a certificate from the state declaring them tax-exempt that matters. Of course, this only comes into play if the state sales tax folks audit you, but if they do, you better have a copy of that tax exempt certificate, not a non-profit corp. certificate.

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gillumhouse's picture
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Tax Dept certificate is what I was talking about. Nothing else counts - anyone can make a corp certificate.

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If they can provide you with their tax exempt ID number. Then they are. If not..they aren't.

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We have had this crop up only once. Don't know if it was a scam or real, but they wanted to pay us with a government P/O. We declined. I'm not waiting to get paid with a government P/O. You pay it and claim it!

I would check with the tax department of your state to see what exemptions they have. 

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Are state run, ie government run, ie "public schools" tax exempt when they travel for school stuff? 

OnTheShore's picture
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I think I would check with your state tax authorities, as it is up to each state to determine who is or is not exempt from taxes.

Someone from out of state who is exempt from paying the tax in their state may or may not be exempt from paying the tax in your state.

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Harborfields wrote:

I think I would check with your state tax authorities, as it is up to each state to determine who is or is not exempt from taxes.

Someone from out of state who is exempt from paying the tax in their state may or may not be exempt from paying the tax in your state.

I remember this conversation but not the details. I remembered saying that those from Oregon used to shop in Washington state and show their driver's license and be tax exempt. But then someone else said something that made more sense...and I forget now.

They pay tax where the service is used. So that makes sense.

I am just discussing this here. The person is tax exempt, but it made me wonder, just like a minister is always tax exempt.

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Joey Bloggs wrote:

The person is tax exempt, but it made me wonder, just like a minister is always tax exempt.

Never heard of that. I know the churches here don't pay sales tax on cleaning and office supplies and other church expenses, but I guarantee you the preacher pays sales tax when he buys himself a car, or when he eats at the local restaurants.

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Joey Bloggs wrote:

I am just discussing this here. The person is tax exempt, but it made me wonder, just like a minister is always tax exempt.

I've never had a minister mention that.

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Madeleine's picture
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It's my experience that, yes, when a state school is footing the bill we don't charge the lodging tax, the only tax we have. But they have to provide us with their id number when booking.

The only other tax exempt guest has been a foreign diplomat.

white pine's picture
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We do the same, always get the tax id number....

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Anon Inn's picture
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I'd call the state tax people.  Here we have two tiers, state sales tax and county room tax.  I suspect most of tax exempt people here would be exempt from the state tax portion only.  This is one for the tax pros.

gillumhouse's picture
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They have to have a certificate of exemption that I can copy. When they make the reservation online they tell me they are exempt. And I tell them to bring the certificate and then I manually adjust to remove tax.

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05/22/2008

They have to show their tax exempt certificate / number. Then no tax is charged on the amount of the stay.

Arks's picture
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They can call, e-mail, or put it in the reservation notes. No mention of it on the website or reservation page.

I've had several state employees stay at my place. I asked them, and none were tax exempt, so it really hasn't come up.

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Online, do you have a place for them to select it, or just tell you in person.

Madeleine's picture
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Guests can just tell me in the notes section, nothing set up online.

Arks's picture
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If they are tax exempt, I don't charge tax. 

I'm probably missing something in your question!

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