Since my city did not have any lodging facilities at the time the "bed tax" was created in the Legislature, my City Council did not enact the ordinance to collect it. The original amount was up to 3%. A couple years ago that was upped to 6% max. I get to tell my guests they SAVE 6% by booking with me instead of the hotels! My tax is the 6% sales tax. However, I get to "eat" the .005% B & O tax of my city - I am given the privilege of paying 50 cents on every $100 gross revenue. Although I would like to keep every dollar possible, if I want services, they have to be paid for..
gillumhouse said:
Although I would like to keep every dollar possible, if I want services, they have to be paid for.
Yes, in many cases the money collected is spent for things that benefit our businesses. Also, it's never our money in the first place. Like a sales tax, we just collect it from the guests and pass it along to the city. But until the day we pass it along, it sure feels like our money!
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Arkansawyer said:
gillumhouse said:
Although I would like to keep every dollar possible, if I want services, they have to be paid for.
Yes, in many cases the money collected is spent for things that benefit our businesses. Also, it's never our money in the first place. Like a sales tax, we just collect it from the guests and pass it along to the city. But until the day we pass it along, it sure feels like our money!
The 6% is just a pass through but the 50 cents per $100 gross really IS my money. It is not something I can pass on to guests.
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gillumhouse said:
The 6% is just a pass through but the 50 cents per $100 gross really IS my money. It is not something I can pass on to guests.
Yes, that sounds like a tax on you, amounting to 0.5% of sales. I haven't seen a locality do that, but I guess it's kind of like an occupation tax based on the size of your business.
You could up your rates to $129.50 and $95.50 to help cover it. Since most sales are probably credit card it wouldn't be like you're having to deal with a bunch of quarters all of a sudden, but those half dollars would add up over a year.
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B & O tax is a business and occupation tax. The amount depends on the business and it is, as far as I can tell, apparently a WV way for cities to find revenue. Before I opened my B & B, as a Councilman, I voted FOR raising the B & O in this city to be in line with other cities around us - ours was way low. To raise my rates will not take it off me, it will just raise the amount I have to pay. I cannot make my tax rate 6.05% - the only way it would work as a pass-through. And it comes out of my tax liability at the end of the year as another "cost of doing business". I do not resent the B & O tax as much as I do the personal property tax I am forced to pay year after year on everything - and to keep you honest, you MUST file a schedule C with your required form of what you have on July 1 (inventory) to be taxed. And they take the claimed food deduction from the Schedule C and divide it by 12 to determine what you had in inventory on July 1. I no longer claim purcahases for the B & B on my taxes for linens, furniture, etc. It costs me more in the long run in personal property taxes.
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