Florida Sales Tax Audit Insider Tips – Hotels
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You may call us for free initial tax consultation and see how we can help you with the Florida sales tax audit. 1-866-700-1040.
Read below some tax tips regarding Sales Tax Audits.
Florida Sales Tax Audits, Hotel, Motel, Industry
A Florida sales tax audit can be a very expensive educational lesson for compliance with the Florida sales tax laws.
Targeting specific industries like the lodging industry (Hotels/Transient Rental and Extended Stay Hotels) because there is low hanging fruit for a revenue agent to pick.
There are always funds to be found in specific industries like the hotel industry to add to the General Revenue of The State of Florida.
Frank Lamantia of Fresh Start Tax LLC is one of own seasoned tax professionals that will represent your best interest if you are undergoing a Florida Sales Tax Audit.Frank is a 16 year veteran with of the Florida Department of Revenue and numerous exposures to hotel audits.
Both Extended Stay and Regular Hotels/Transient Rentals are targeted by the Florida Department of Revenue because of the large dollars they bring to Florida State Department of revenue coffers.
Beware:
As a former state of Florida auditor who has conducted many hotel audits I can warn you that if you do not have the proper documentation for an exempt rental in your hotel you will pay the price.
Also, you may think you have all the documentation you need but please read this article and you will be enlightened and informed to prepare you for a sales tax audit.
Your hotel/motel is a part of the tourism industry which is Florida’s largest industry.
The state of Florida struggles to reverse shrinking tax revenues by increasing tax audits with the hospitality industry focusing on exempt room rentals by unauthorized federal, state and local governments; schools; and nonprofit employees staying in hotels without proper documentation or authorization or for personal reasons.
Exempt Room Rentals – Complete and detailed records are required for all exempt rentals:
Federal Employees
A federal employee will be entitled to grant sleeping accommodation exempt from sales tax upon submission to the hotel of either of the following documents:
1. a copy of the official federal government travel orders which specifically gives authorization to that individual to acquire sleeping accommodations at government expense for that specific, or
2. a written statement, to which the employee swears or affirms, showing: His or her name, the name and address of his or her employer, the need for the purchase has arisen in pursuit of his or her employer’s affairs, and the government of the United States either will pay the bill directly, or will be providing reimbursement to the employee for the actual cost the purchase.
The suggested affidavit can be a found in Rule 12A-1.038(4), Florida administrative code
Governmental units (non-federal) and other exempt organizations.
Transactions involving employees of governmental units other than federal government (i.e., state, county, city, or any other political subdivision of this state) and authorized representatives of organizations that hold the consumers certificate of exemption issued by the Florida Department of revenue are exempt from tax on rental charges or room rates for transient accommodations only when:
- the rental charges or room rates are billed directly to and paid directly by the governmental unit or the exempt organization;
- the employee or representative does not use the transient accommodations for personal purposes; and
- the employee or representative provides the owner or the owner’s representative of the transit accommodation with proper documentation. See Rule 12A-1.038(4), Florida Administrative Code.
Military Personnel
Rental charges or rooms paid by military personnel currently on active duty and present in the community under official orders are exempt. To qualify for the exemption, the military personnel must present either of the following documents to the owner’s representative or the owner of the transient accommodations.
- A copy of the official orders supporting the active-duty status of the military personnel and making it necessary to occupy the transient accommodations; or
- a copy of an overflow certificate issued to military personnel on active duty status by any unit of the U.S. Armed Services
Continuous Residence
The state of Florida allows a sales tax exemption for periods longer than six months. Documentation of when the rental started in the sales tax paid from the beginning of the rental will be required by the Florida tax auditor.
“When any person has continuously resided at any transient accommodation for a period of longer than six months and has paid the applicable tax due to the rental charges or room rates for the first six months, that person is exempt from tax on the rail charges or room rates do for that transient rental combination after the first six months of continuous rental. See Rule 12A-1.061(14)(b), Florida Administrative Code”
Other Rental Considerations
As a veteran Florida Department of revenue auditor I am now working on your side and can tell you that the auditor will look at these items to pick up revenue for the state of Florida:
- conference services such as banquet rooms, meeting rooms, food, beverages
- audio and visual services such as large screen television sets digital video recorders microphone, slide and movie projectors, etc
- catering of food and beverage that may be purchased already prepared or prepared and served on the site by the motel/hotel
Purchases of Consumable Supplies
Overhead items such as tools paper, detergents, paint cleaners, brushes, pails, etc. will be taxable.
Rewards Points Program
When a member of a hotel rewards program uses a rewards certificate for transient accommodations and pays the hotel an additional room rate for upgrades, taxes are too on the additional room rate or rental charge.
Transient rental taxes are due when a hotel receives more in reimbursements from the program than the hotel contributed to the program.
This calculation is determined by comparing the total reimbursements and the total contributions during the previous calendar year, the hotel must determine the percentage to be applied to all reimbursements received during the current reporting period.
We are a full-service tax firm that specializes in federal tax representation and are one of Florida’s most experienced for sales tax audit defense.Our staff consists of tax attorneys, certified public accountants, former IRS agents and a former sales tax auditor with over 16 years of direct work experience with the Florida Department of revenue.
Feel free to contact us for initial tax consulting for Florida sales tax audit defense.
We will completely review your case and give you a full assessment of your audit status so you can make an informed and confident decision of how to fully resolve your sales tax audit case.
Florida Sales Tax Audits – Hotel, Motel Industry Experts
