Why am I Being Audited?

You just received notification that your business has been selected for a Texas Comptroller state tax examination. Unless you have been through the audit process before, you probably have lots of questions and concerns. Of course one of the first questions most business owners ask is, “Why my business?” Although it’s common to think you did something wrong, this usually isn’t the case. However, if you have been selected for audit, Texas Tax Group has a team of 15 former Texas Comptroller State Tax Auditors who can help you save time and money. (more…)

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Homeowners Renting a Room to the Public

The many upcoming springtime festivals, rodeos, races and other entertainment events have some Texans leasing their homes to visitors in town for the events. Remember though, that persons leasing rooms or houses must collect hotel occupancy tax from their customers, in the same way a hotel or motel collects the tax from its patrons.

*Originally published in Tax Policy News; a monthly newsletter about Texas tax policy at http://www.window.state.tx.us/taxinfo/taxpnw/tpn2013/tpn1302.html#issue1.

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State Employees Are Not Exempt from Hotel Occupancy Tax

State employees traveling on official business are not exempt from state or local hotel occupancy tax, unless an exception applies. State employees should not issue a hotel occupancy tax exemption certificate to a hotel.

State law exempts certain state employees from state and local hotel occupancy tax: mostly judicial officials, heads of state agencies, members of state boards and commissions and members of the Texas legislature. Each agency issues such employees a hotel occupancy tax exemption photo identification (ID) or card which must be presented to the hotel, along with a completed Texas Hotel Occupancy Tax Exemption Certificate (Form 12-302) (PDF, 66KB) , during the check-in process. Refunds are not available.

Employees of Texas institutions of higher education travelling on official business may claim exemption from the 6 percent state hotel occupancy tax by presenting a completed Texas Hotel Occupancy Tax Exemption Certificate to the hotel at check-in. These employees must pay any local hotel occupancy tax imposed.

Texas state agencies are exempt from sales tax, but they are not exempt from hotel occupancy tax. State employees are entitled to reimbursement for hotel occupancy taxes paid when traveling on official business of the state. Most state agencies reimburse their employees through travel vouchers. The hotel tax is an incidental expense and does not apply to the maximum lodging reimbursement rate.

State agencies that have submitted a blanket refund request will receive a refund through the state’s accounting system each fiscal quarter for hotel tax that the agency reimbursed to employees. A state agency not on the state’s accounting system must make separate quarterly refund requests with the Comptroller’s office and with each local taxing authority that collected hotel tax. Submit a Texas Claim for Refund of State Hotel Occupancy Tax (Form 12-104) (PDF, 65KB) to claim a refund.

For more information, see Tax Code Sections 156.103(c)351.006(d) and 352.007(d) andRule 3.163.

*Originally published in Tax Policy News; a monthly newsletter about Texas tax policy at http://www.window.state.tx.us/taxinfo/taxpnw/tpn2012/tpn1211.html.

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Tax is Due on Short-Term Home Rentals

Texas will be host to a number of major sporting and entertainment events this fall, including football games, baseball playoffs, music festivals and now Formula One racing. Individual homeowners and leasing companies often rent their homes and properties to vacationers attending these events. Like the rental of a traditional hotel room, hotel occupancy tax is also due on the rental of a home.

Persons and companies renting furnished homes to members of the public who have not registered for the 6 percent state hotel occupancy tax must submit a completed Texas Hotel Occupancy Tax Questionnaire (Form AP-201). Hotel tax is due on past rentals, as well.

See the April 2011 Tax Policy News for additional information.

*Originally published in Tax Policy News; a monthly newsletter about Texas tax policy at http://window.state.tx.us/taxinfo/taxpnw/tpn2012/tpn1210.html

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National Collegiate Athletic Association (NCAA) Conference Realignments

Changes to NCAA conference affiliations are bringing new travelers to Texas who are unfamiliar with Texas hotel tax law. With Texas A&M University joining the Southeastern Conference (SEC) and West Virginia University (WVU) joining the Big 12 Conference, sports and academic teams and their fans from the SEC and WVU are booking hotel stays throughout the state.

As educational organizations, Texas colleges and universities and their employees (coaches) traveling on official business qualify for exemption from the 6 percent state hotel occupancy tax. The exemption does not apply to local hotel occupancy tax. See Texas Tax Code Section 156.102.

Educational organizations, as defined in Rule 3.161(a)(2), include independent school districts, public and nonprofit private elementary and secondary schools and Texas institutions of higher education. Universities, colleges, junior colleges and community colleges from other states or countries are not exempt and must pay all hotel occupancy taxes imposed.

For example, an SEC team traveling to College Station to play Texas A&M may not claim a hotel tax exemption. The same is true for a team from WVU when it travels to a Big 12 school in Texas. On the other hand, teams from Baylor, Texas Christian University, Texas Tech University and the University of Texas may claim a state hotel tax exemption when traveling to a Texas city.

A completed Texas Hotel Occupancy Tax Exemption Certificate (Form 12-302) (PDF, 66KB) should be submitted to the hotel to claim the exemption. A hotel may accept the exemption certificate, in good faith, when presented with a letter of hotel tax exemption from the Comptroller or proof the school has received a letter of hotel tax exemption, such as a copy of the exempt verification from the Comptroller’s Texas Tax-Exempt Entities Search. See Rule 3.161(b)(2).

In addition to reserving hotel rooms, travelers may also use other non-conventional types of lodging, such as renting a person’s home. A hotel is defined in Texas Tax Code Section 156.001 as a building in which members of the public obtain sleeping accommodations for consideration. Therefore, the rental of a home, apartment or condominium unit is also subject to hotel occupancy tax.

For more information, see the Hotel Occupancy Tax section on the Texas Comptroller’s Window on State Government’s website and Hotel Occupancy Tax Exemptions (Pub 96-224).

*Originally published in Tax Policy News – a monthly newsletter about Texas tax policy at http://window.state.tx.us/taxinfo/taxpnw/tpn2012/tpn1208.html

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