Tax Guidance for Persons, Firms, and Corporations Subject to Transient Occupancy (Lodgings) Tax
The Alabama Department of Revenue held a public hearing on August 10, 2017, to amend the Sales and Use Tax Rule 810-6-5-.13 entitled “Persons, Firms, and Corporations Subject to Lodgings Tax” to clarify the tax treatment for the rental of certain rooms that are neither intended nor suitable and not used for overnight sleeping purposes. This change is effective for all open tax periods for those transactions on which the lodgings tax was not collected. No refunds will be made for any tax on which a final assessment was entered and/or tax was collected prior to the effective date of this rule. A copy of the entire rule is attached. The amended section is worded as follows:
(8) Charges made for the rental of ball rooms, dining rooms, club rooms, sample rooms, conference rooms, wedding chapels, or other meeting spaces that are neither intended nor suitable and not used for overnight sleeping purposes are not subject to the tax levied by Section 40-26-1, Code of Alabama 1975, if the charges for the rental are separately stated by the facility and are used exclusively as a meeting room for any conference, seminar, club meeting, private party or similar type activity. This exclusion, as provided for in this rule, applies solely to the transient occupancy tax levied under Chapter 26 of Title 40, Code of Alabama 1975, and does not apply to any other taxes, licenses, or fees. However, the separately stated rental charges made exclusively for such meeting rooms by the facility are also excluded from the tax levied by Chapter 23 of Title 40.
Attached is a copy of Sales and Use Tax Rule 810-6-5-.13, entitled Persons, Firms, and Corporations Subject to Lodgings Tax. You may also view the rule on the Department’s website under the LEGAL link and then utilize the Administrative Rules icon.
The changes made to the rule will be effective September 28, 2017.
Click here to download a pdf version of this notice.