Florida Sales Tax Rules
12A-1.0615 Hotel Reward Points Programs
1. Scope.
(a) The provisions of this rule govern the taxation of transactions between program administrators of hotel reward points programs and hotels providing transient lodging accommodations that participate in these programs.
(b) For purposes of this rule, the term “transient rental tax” means the state sales tax imposed on transient rentals under section 212.03, F.S., the discretionary sales surtax as authorized in Section 212.055, F.S., the locally-imposed tourist development tax provided for in Section 125.0104, F.S., the tourist impact tax provided for in Section 125.0108, F.S., the convention development tax in section 212.0305, F.S., or any municipal resort tax in chapter 67-930, L.O.F.
(2) Transactions between a hotel and a guest using reward points.
(a) When a member of a hotel reward points program uses a certificate or confirmation number entitling the member to transient accommodations at a participating hotel at no charge, the hotel is not required to collect transient rental tax from the member.
(b) When a member of a hotel reward points program uses a certificate or confirmation number entitling the member to transient accommodations and pays the hotel any room rate or rental charges using any form of payment other than reward points, the member is required to pay the hotel transient rental tax on the amount of the room rate or rental charges paid using any form of payment other than reward points.
(3) Transactions between a hotel and a reward points program.
(a) For the purposes of this subsection, the following words are defined:
1. “Hotel” is used in the singular and is meant to describe a single operation, at one specific location, that provides transient accommodations as described in Section 212.03, F.S. The term “hotel” does not mean a group of affiliated hotels or a group of hotels operated by one franchisee.
2. “Reimbursements” mean money or credits received by a hotel from a reward points program fund.
3. “Contributions” mean money or credits paid by a hotel to a reward points program fund.
(b) Transient rental tax is due on a hotel’s reimbursements when the hotel receives more in reimbursements than it paid in contributions in the prior calendar year.
(c) Calculation of Taxable Reimbursements for Periods Other than a Hotel’s Initial Year of Participation.
1. Each January, a hotel must determine the percentage to be applied to reimbursements received during the subsequent calendar year using the following calculation:
Total Reimbursements Received in Prior Calendar Year ‒ Total Contributions Paid in Prior Calendar Year
÷ Total Reimbursements Received in Prior Calendar Year
= Percentage to be Applied to Reimbursements Received in Current Calendar Year
If the resulting percentage is zero or less, then no transient rental tax is due on reimbursements received in the current calendar year.
2. The full amount of reimbursements received by the hotel in the current reporting period must be multiplied by the percentage to determine the amount of reimbursements subject to transient rental tax for that reporting period.
3. Example: A hotel’s total reimbursements and contributions in the preceding calendar year are $10,000 and $7,500, respectively. The hotel’s percentage for the current calendar year will be calculated in January as ($10,000 - $7,500)/$10,000 or 25%. If the current reporting period’s reimbursements are $1,000, the amount of reimbursements subject to tax in the current reporting period is $250.
(d) Calculation of Taxable Reimbursements for a Hotel’s Initial Twelve Months of Participation in a Reward Points Program.
1. At the end of a hotel’s initial twelve months of participation in a reward points program, the hotel must determine the percentage to be applied to reimbursements received during the initial twelve months of participation using the following calculation:
Total Reimbursements Received During the Initial Twelve Months ‒ Total Annual Contributions Paid During the Initial Twelve Months
÷ Total Reimbursements Received During the Initial Twelve Months
= Percentage to be Applied to Reimbursements Received in the Initial Twelve Months
If the resulting percentage is zero or less, then no transient rental tax is due on reimbursements received in the initial twelve months of participation.
2. The full amount of reimbursements received by the hotel in the initial twelve months of participation must be multiplied by the percentage to determine the amount of reimbursements subject to transient rental tax for the initial twelve months. The full amount of any tax due must be remitted with the hotel’s first tax return due following the end of the initial twelve months of participation. The hotel must keep a supplemental schedule allocating the remittance to the appropriate reporting periods of the initial twelve months of participation in the hotel’s books and records kept in the normal course of business. This schedule must be made available to the proper taxing authority upon request.
3. The percentage calculated for the initial twelve months of participation must also be used to calculate taxable reimbursements for all remaining reporting periods in the calendar year in which the calculation is made.
4. Example: A hotel begins participating in a reward points program in June 2010. In June 2011, the hotel must calculate the percentage using the total reimbursement and contribution amounts for June 2010 through May 2011. The resulting percentage must be applied to all reimbursements received from June 1, 2010, through May 31, 2011, to determine the amount of reimbursements subject to transient rental tax for that period. The hotel must report any taxable reimbursements for June 2010 through May 2011 on the hotel’s first tax return due following May 2011. The hotel must also apply the June 2010 through May 2011 percentage to all reimbursements received each reporting period for the remainder of calendar year 2011. In January 2012, the hotel must recalculate the annual percentage using the total reimbursement and contribution amounts for January through December, 2011.
5. If a hotel ceases to participate in a reward points program before the completion of a full twelve month period, then the hotel must determine the percentage to be applied to reimbursements received by using the period of time that the hotel participated in the reward points program. Any tax due must be reported on the hotel’s first tax return due following the date on which the hotel ceases to participate in the reward points program.
(e) Tax must be reported and remitted as provided in Rule 12A-1.056, F.A.C.
(4) Recordkeeping.
(a) A hotel must maintain records received from or sent to the program administrators indicating reimbursements and contributions, and records indicating the calculations required under this rule to determine the amount of transient rentals tax due, until tax imposed or administered by Chapter 212, F.S., may no longer be determined and assessed under Section 95.091(3), F.S.
(b) Electronic storage of the required records will be sufficient compliance with the provisions of this subsection.
Rulemaking Authority 125.0104(3)(k), 125.0108(2)(e), 212.0305(3)(f), 212.12(12), 212.18(2), 213.06(1) FS., Ch. 67-930, L.O.F. Law Implemented 125.0104(1)-(4), (8), (10), 125.0108, 212.03(1)-(5), (7), 212.0305, 212.054 FS., Chapter 67-930, L.O.F. History–New 5-23-11.
