Hotel Occupancy Tax - Booking Agents

Effective January 22, 2019, a booking agent that facilitates the short-term booking of an occupancy on behalf of an operator located in Pennsylvania must now charge, collect and remit hotel occupancy tax on the "accommodation fee," which is an amount charged by the booking agent in excess of the discount room charge.  

The booking agent must also charge, collect and remit hotel occupancy tax on the discount room charge, as well as any other consideration received for the occupancy, except for gratuities (although the agent may be entitled to claim a credit for the amount of tax paid directly to the operator). 

Hotel occupancy tax is similar to Pennsylvania sales tax. It applies when renting out a property — including a home, room or apartment — to provide lodging to a guest for a period of fewer than 30 days.

What has changed with hotel occupancy tax under Pennsylvania law

Act 109 of 2018 (House Bill 1511 Printer's No. 4253) made the following changes effective January 22, 2019:

1. Expands the definition of operator to include “booking agents.”

• Under state law, a booking agent is a person or entity that facilitates or collects payment for hotel accommodations on behalf of or for an operator. The term booking agent does not include a person who merely publishes advertisements for accommodations.
• Examples of a booking agent include third-party intermediaries that purchase hotel rooms at a discount and then resell them, and operators of online marketplaces connecting people seeking to rent a home or apartment with travelers seeking short-term accommodation.

2. Imposes tax on all rent collected by booking agents.
   
3. “Rent” is expanded to include “accommodation fees.”

• The “accommodation fee,” the amount charged by the booking agent in excess of the discount room charge, is newly subject to tax.
• The “discount room charge,” the amount received by the operator of the hotel, was the only amount previously taxable.

Previously, hotel occupancy tax was paid by an occupant only on the hotel’s basic room charge (now called the discount room charge). Tax is now charged on the booking agent’s accommodation fee.

What must booking agents do to comply with the law?

Booking agents are required to be registered for two licenses to collect hotel occupancy tax.

1. The booking agent is required to obtain a Sales, Use and Hotel Occupancy Tax -Booking Agent license. Complete the REV-1840 Hotel Booking Agent Registration Form to acquire the Booking Agent license. Upon completion of the registration form, email the form to RA-BTFTDIRECTORFAX@PA.GOV or fax to 717-705-8994.
2. If the booking agent does not already have a separate Sales, Use and Hotel Occupancy Tax license, it should obtain one using the Pennsylvania Online Business Tax registration process at mypath.pa.gov.

The reason for the additional booking agent license is that taxes collected on the accommodation fee do not go into the commonwealth’s General Fund. Rather, the money is designated for the state’s Tourism Promotion Fund. Therefore, the tax on the accommodation fee must be accounted for separately.

The department requires a person operating a hotel to continue to remit Hotel Occupancy Tax on the discount room charge under his/her license number.  Online home sharing companies that rent out rooms for Pennsylvania property owners are required to remit the tax on all rents under their hotel occupancy tax licenses.

Sample Transaction:

A customer books a hotel room for one night through a booking agent for a discounted room charge of $100.00. The booking agent charges a $20.00 accommodation fee for providing the service. The booking agent bills the customer as follows:

1. The Operator remits $6.00 (.06 tax rate X $100.00 Discount Room Charge) to the PA Department of Revenue under his/her Sales, Use and Hotel Occupancy Tax License.
   
2. The Booking Agent remits $1.20 (.06 tax rate X $20.00 Accommodation Fee) to the PA Department of Revenue under his/her Booking Agent License.

• The Booking Agent must also file a tax return under his/her Sales, Use and Hotel Occupancy Tax License claiming a Taxes Paid-Property Resold ("TPPR") credit on the myPATH return for any amount of tax paid to the operator and remitted to the department by the operator.
• In instances where the booking agent collects the tax from unlicensed hotels (e.g. private homeowners), the tax on the discount room charge is remitted and reported under his/her Sales, Use and Hotel Occupancy Tax License, and the tax on the accommodation fee is remitted under his/her Booking Agent License.

What are the filing and remitting requirements?

The booking agent license will follow the current retail license filing frequency.  Licensees must submit a hotel booking agent tax return with the Pennsylvania Department of Revenue, even for periods when no taxable hotel booking rentals occurred. The tax account filing frequency for ensuing calendar years may change based upon the amount of tax reported to the department.

Where does a booking agent file and remit hotel occupancy taxes?

File returns and remit payments using myPATH, a free tax filing system, by visiting mypath.pa.gov and logging into your myPATH account.

What are the due dates for the taxes?

The due dates for booking agents follow the same due dates for sales, use and hotel occupancy tax. These due dates are updated on a yearly basis and can be found on the REV-819 posted to the department's website. Visit this page for current due dates for sales, use and hotel occupancy tax.

What about local taxes?

• The 6 percent hotel occupancy tax remitted to the department (plus the additional 1 percent local tax in Allegheny and Philadelphia counties on the state tax base) is separate and distinct from local hotel taxes administered by local taxing jurisdictions throughout Pennsylvania.
• Under Act 109 of 2018, booking agents must collect, report and remit directly to local authorities hotel excise taxes imposed and administered by those local taxing jurisdictions.
• For a list of local hotel occupancy taxes, visit this link.

When does a private homeowner renting their home need a Sales, Use, and Hotel Occupancy license?

A private homeowner who exclusively (100%) utilizes a booking agent does not need to have a Sales, Use, and Hotel Occupancy Tax license.

Who do I contact if I have a question?

For additional questions, contact the department's Customer Experience Center at 717-787-1064 or visit our Online Customer Service Center to review frequently asked questions.