Dean Elphick

🏨 US hotel tax, also known as occupancy, lodging, or bed tax, is predominantly a state tax with local jurisdictions adding their own taxes. State hotel tax rates generally range between 2%-6%, but Hawaii boasts the highest state rate at 10.25%. Notably, Georgia levies a $5/night fee and cities like Columbus can exceed 20% due to local taxes. Calculating hotel tax involves local tax rates and can result in significant total charges, for instance, a combined state and city tax of 10% on a $100 room equals $110 per night. Online travel agents may add 'tax recovery charges' and 'service fees' to bookings, obscuring their profit margins. Tax revenue typically funds tourism, infrastructure, and community services, with the guest bearing the tax cost. Rates and rules vary significantly by region, affecting room rates and overall costs.

🏨 Hotel VAT, a form of value-added tax, varies by country and region, with different rates and names such as GST or sales tax. The standard VAT rate for hotel rooms in the UK is 20%, temporarily reduced to 5% during COVID-19. The US has no federal sales tax but imposes state and local taxes ranging from 2.9% to 7.25%, plus potential hotel taxes (0%-20%). In Italy, the standard rate is 22%, with a reduced 10% for tourism, excluding luxury hotels. Germany imposes a reduced 7% on hotels, lower than its standard 19%. Spain and Ireland offer reduced rates of 10% and 13.5%, respectively. Mexico has a flat 16% VAT, while Australia and New Zealand apply a 10% GST, the latter dropping to 9% for stays over four weeks. Thailand's VAT is temporarily cut to 7%, and the Philippines applies a 12% VAT. Indonesia uses local "PB1" taxes for hotels. Compliance with VAT regulations is crucial for hotel owners to avoid penalties.