Hotel Occupancy Tax - Booking Agents

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.

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

1. 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 booking agent will need to obtain a sales, use and hotel occupancy tax license before registering for a booking agent license.
2. Upon receiving the sales, use, and hotel occupancy tax license, the next step is to register for the booking agent license. Complete the REV-1840 Hotel Booking Agent Registration Form [PDF] to acquire the booking agent license. Upon completion of the registration form, email the form to ra-btftregisfax@pa.gov​ or fax to 717-787-3708.
   

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.