Occupancy Tax Flashcards
(40 cards)
What is Occupancy Tax?
Taxes due on gross receipts derived from the rental of any room, lodging, or accommodation furnished by a hotel, motel, inn, or similar place within the County under 90 consecutive days to the same person.
The Occupancy Tax also applies to rooms or houses rented by individuals through websites including, but not limited to, Airbnb, VRBO, Windu, Roomorama, etc.
This occupancy tax is in addition to state and local sales tax, and is based on gross room sales.
What is the occupancy tax rate?
6%
What types of accommodations are exempt from remitting occupancy tax?
The tax does NOT apply to accommodations furnished by nonprofit charitable, educational, benevolent (any non-profit organization organized and existing exclusively for the relief of poverty, distress, disaster, or other condition of public concern within this state) or religious organizations when furnished to further their nonprofit purpose.
The tax also does NOT apply to accommodations furnished to the same person for at least ninety (90) consecutive days.
When are remittances due (simply)?
Monthly - by the 20th of each month following the month in which the tax accrues, unless the weekend/holiday rule applies
Establishment A, not falling under any exemptions, rents out a room to someone for 45 consecutive days. Are occupancy taxes due for that stay?
Yes. The stay is less than 90 consecutive days.
Establishment B, not falling under any exemptions, rents out their house to a friend of theirs for 2 consecutive months. Are occupancy taxes due for that stay?
No. The stay is more than 90 consecutive days.
What is needed to process a remittance?
A monthly remittance form and payment, if necessary. Taxpayers who have set up an AccessBuncombe account can remit online.
Do the collected funds stay within the tax department?
No. The tax revenue must be distributed to the local tourism development authority for use promoting travel and tourism in the area.Buncombe County Tourism & Development Authority (BCTDA) is ours. They handle all waivers and refunds.
Are there penalties for failing to pay occupancy taxes, remitting late, or sending only either the remittance form or a check with no form?
Yes.
5% penalty every 30 days for failure to file return when due, up to 25%
10% penalty for failure to pay tax when due.
The penalties for failure to pay occupancy taxes are either specified in the local bill that authorized the tax or tied to the penalties for delinquent state sales taxes found in GS 105-236. These include a 5%-per-month penalty for failure to file the required monthly return, up to a maximum of 25%, and a one-time 10% penalty for failure to pay the tax along with the monthly return. Both penalties are based on the amount of tax owed.
For example, if a hotel owed $1,000 in occupancy tax for a particular month and did not file a return or pay the tax, the total penalty for the first month would be $150: $50 for the failure to file and $100 for the failure to pay. GS 105-236a9 also makes the failure to file a return or pay the tax a Class 1 misdemeanor.
What collection remedies are available to collect delinquent taxes owed?
-Attachment, garnishment, and levy
-Set-off debt collection
-Civil suit
-Criminal misdemeanor prosecution
Are occupancy taxes the same as sales tax? Do occupancy taxes INCLUDE sales tax?
No and no. NC Sales tax is collected solely by the state, with a portion of it on our behalf and then distributed to the county later on.
You can contact the NC Department of Revenue at 1-877-252-3052 or www.dornc.com.
How do I get started if I do need to pay Occupancy Tax?
Fill out the New Remitter Form and send to the Tax Department as indicated on the form.
When is Occupancy Tax due (detailed)?
Occupancy Tax remittance and forms must be delivered in person or postmarked on or before the 20th of every month for the previous month of sales.
For example, Occupancy Tax for the month of July (1st-31st) is due on or before August 20th. If the 20th falls on a weekend, the due date will be the following Monday.
What charges/fees are included in Gross Receipts/Sales?
In general, anything you charge a guest, you include.
Room rental
Credit card fees
Damage fees
Early/late departure fees
Extra person charge
In-room safe rentals
Inspection fees
Linen fees
Maid/cleaning fees
“Peace of mind” fees (damage waiver)
Pet fees
Reservation/handling/processing/ administrative fees
Security deposits
Smoking fees
Transfer fees
Tentative reservation fees
Charges for cribs and roll-away beds
Charges for microwave ovens and refrigerators
What are the accepted payment methods?
Currently payments are accepted in the form of online pay and cash, check, or money order physically delivered or mailed to the Buncombe County Tax Department.
What if I use an online service (such as Expedia, AirBnb, VRBO, etc) for my reservations? Do I still need to pay Occupancy Tax?
Simply, it depends.
The property owner is responsible for ensuring that Occupancy Tax is collected and remitted to Buncombe County for all applicable sales and fees. Some online services will collect the Occupancy Tax at the time of the reservation. Some of the online services will also remit the tax on the owner’s behalf, while some choose to send the tax collected to the owner for remittance. It will be the responsibility of the property owner to communicate with the online service and be clear on the extent of their involvement.
If a third party is collecting AND remitting Occupancy Tax for sales at your establishment, you will not need to remit any tax for those particular sales. There is a place on the monthly remittance form to subtract these sales before calculating the tax due.
Please note, in the event of an audit, the property owner would be required to produce documentation showing that a third party had remitted Occupancy Tax for any sales that the owner did not pay tax on.
What do I do in the event that the same tenant stays in the same room for 90 days?
An accommodation rented to the same person for a period of 90 or more continuous days is NOT subject to Occupancy Tax.
The tax collected from any person prior to the accumulation of such 90 continuous days of occupancy by said person shall be refunded to such person by the establishment.
An establishment making any such refund of tax which has been paid to the County shall be entitled to claim a credit for the tax so refunded on the return due to the County for the month in which the refund occurred.
Does Buncombe County have an exemption for federal government employees?
North Carolina has an exemption for Centrally Billed Account (CBA) travel cards and purchase cards.
Federal government employees using a CBA card are exempt from state sales tax as well as Buncombe County occupancy tax.
More information on the state tax exemption and how to recognize the cards that the exemption applies to can be found at the GSA website as well as in Section 37 of the NC Department of Revenue Sales and Use Tax Bulletin.
If an establishment has $0 to remit for a month, do they still need to file for that month?
Yes.
If a taxpayer wants to set up an account to remit online, how does that process begin?
Payments can be submitted on AccessBuncombe, new participants will need to sign up and then they will receive information that their account has been set up and they are ready to go.
Remittance forms will still need to be submitted so we can upload them to their accounts on OccTax, which remitters can’t access.
How do cities or municipalities affect occupancy tax?
Occupancy Tax is a County-wide tax, and municipality location has no bearing on it.
What if a normal occupancy tax account, such as a hotel, rents out their space to a non-profit?
Occupancy tax still needs to be collected, since the property owners are still making money from them.
Now, if the entity that is renting the property is doing so for more than 90 days, then no, no Occupancy Tax.
How do AirBnB and VRBO remittances differ from other owner accounts?
If a 3rd party (AirBnB, VRBO) is remitting, their process is different and not connected directly to the O-tax remittance site. They send a bulk payment with no way to know who they’re remitting for.
The owner o-tax account with us is for direct bookings only, so if there are no direct sales being made, to note that, and send in a remittance form.
You’re confused, or someone asks a question you can’t answer, or is trying to obtain information about certain accounts. What do you do?
“Just take an extra moment any time anyone is asking you to give them information about an OccTax or Gross account. There is very little we can provide to someone who is not associated with the account, but we can be in plenty of trouble for giving out even a little. As always, if you are even remotely unsure, ask. Anything regarding waiver requests (aside from just providing the TDA’s info), feel free to send my way.” - Daily Collections Supervisor
