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Cancel penalties and taxes

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agoodman

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Do you charge taxes on cancel and no show fees? I seem to think that I am exempt from charging hotel tax because the bed was not occupied which made me think hmm I don't know if you can / should charge sales tax when there was "officially" no sale
(of course I would claim any I did not charge as deductions on my tax submissions to the state and county)
 

gillumhouse

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I charge the tax. It makes it too hard to sort out when I do my sales tax AND the tax dept does not care whether the bed was occupied or not - you took in revenue and they want their cut!
 

swirt

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On sales tax, if you made a sale, they want their cut. Here it is phrased as an exchange of goods and services. So if they cancel and we keep the deposit, no service was provided, so it is not taxed. If it is phrased as a tax on revenue, then it is taxable.
On hotel tax I think it also depends how the tax is phrased. If it is an occupancy tax, then no, you had no occupancy. If it is a revenue tax, then it needs to be paid.
The other rule of thumb is that if you collect it, it needs to be paid. So part of the answer may depend on how you calculate and provide a receipt for whatever money exchanged hands. (example: our deposit is for one room night without the taxes)
 

HighMountainLodge

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Um. Ask your accountant. Presumably this person is committed to keeping you out of trouble in all your taxing jurisdictions, of which there are unquestionably manifold.
 

Alibi Ike

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This is a topic at our state innkeeping convention. You probably need to check with your state.
 
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