Hotel, Motel, Holiday Inn

[00:00:08] Speaker A: Welcome, everyone, to taxing poetic. This is Hotel Motel Airbnb Hospitality and sales tax. Today we'll be discussing the intricate world of all the fees we pay when we want to go somewhere cool. Cool. And my name is Jenny. I am the skipper of the SS nerdship here, and I will let our captain introduce himself. [00:00:34] Speaker B: I'm Captain Timothy Howe and the CEO and founder of Synaxus. Good to be here. [00:00:39] Speaker C: First time he's ever called himself Timothy. [00:00:41] Speaker B: There you go. [00:00:42] Speaker A: Oh, so formal. [00:00:43] Speaker B: I decided to get a little formal today. [00:00:45] Speaker A: And when I'm not the. [00:00:46] Speaker B: Since you're calling me captain. [00:00:50] Speaker A: When I'm not the skipper on the SS nerdship, I am a supervisor with Synexus Tax Solutions. [00:00:55] Speaker B: Awesome. [00:00:56] Speaker A: Yeah. So, okay. [00:00:57] Speaker B: And our producer. [00:00:58] Speaker A: Oh, yeah, I forgot about him. [00:00:59] Speaker B: Hi. [00:01:00] Speaker A: This guy. [00:01:00] Speaker B: Yeah, the random dude sitting next to you we just pulled off the street. [00:01:03] Speaker A: I know. Exactly. Keeps us going here. [00:01:06] Speaker B: JB. Good to see you, JB. [00:01:07] Speaker A: Nice to see you. Thanks for being here to learn about Hotel and Motel Airbnb. [00:01:12] Speaker C: Very excited. [00:01:13] Speaker A: Yes, it is very exciting. So I'm about to reveal everybody some very sensitive and classified information. [00:01:22] Speaker B: Oh, my gosh. [00:01:24] Speaker A: And JB, I need you to unblock me on your phone because you're going to be my one phone call after this. So here we go. Okay, Tim, we know that they used your brain to map chat GPT for sales tax. They just downloaded all the information in there. And when people type in sales tax questions, it is the information that you have stored over many years. [00:01:52] Speaker B: And just in full disclosure, that's why you can't trust it. [00:01:56] Speaker A: Well, yes, also more on that later. However, I have some experience in multiple fields and industries with sales tax. But what I'm trying to say is I am not a chat GPT, and I'm going to need some more, like intro level. [00:02:16] Speaker B: Knowledge. [00:02:17] Speaker A: Knowledge. Thank you. I'm going to need some more intro level knowledge on hotel and motel. Hotel and motel. So I'm going to be learning along with everyone else. [00:02:24] Speaker B: Okay. [00:02:24] Speaker A: This is new to me. We have a new client. Just the past few months I've been learning some more about this industry and it's pretty interesting and excitIng, applicable to all of us. We all travel. [00:02:37] Speaker B: A lot of weirdness. A lot of weirdness really know actually existed. [00:02:41] Speaker A: I have paid these taxes for years and years. Never known why I do other than complain about them. So I'm glad you're here to download. [00:02:49] Speaker B: We're going to get into a little bit of that, too, right? [00:02:51] Speaker A: Yes, we're going to download, but real quick, because we're taxing poetic. I have another haiku that I wrote. Let me get my materials here. I just bumped the mic. Sorry about that. [00:03:03] Speaker C: It's okay. [00:03:04] Speaker A: Okay, here we go. [00:03:09] Speaker B: Five, seven, five. No pressure. [00:03:12] Speaker A: I'm just gathering my thoughts. Don't listen to Tim. He really likes wearing scarves because he's so bougie. And if you'd ever watched mean girls, you would know that podcast days are the days we wear scarves. [00:03:30] Speaker B: Okay, so. [00:03:31] Speaker A: Well, please keep that in mind. [00:03:32] Speaker B: I guess podcast days will not be on my calendar anytime soon, minus that big picture behind us. [00:03:38] Speaker A: Correct, exactly. I think that people are expecting scarves, is what I'm saying. [00:03:42] Speaker B: Someone who will remain nameless has a picture of me in a beret, and that will never come to surface. Exactly. [00:03:51] Speaker A: All right, so I'm done taxing poetic with my haikus about scarves. [00:03:56] Speaker B: Awesome. [00:03:56] Speaker A: And I'm going to let you start taxing poetic about hotel motel tax. [00:04:01] Speaker B: Yeah. So in all honesty, I think we're probably going to change this into a little bit of a question and answer kind of session, right? I think you wanted to get educated, and I do a little bit more about the occupancy taxes and per room night fees and all the fun stuff that actually comes along with hotel motel occupancy taxes. So the big thing to understand is that if you are in the hotel industry, and I'm sure anybody who's listening who works in the hotel industry with relation to taxation, knows that it is a very complex environment. If you think about when you go to a Marriott or if you go to any kind of full service hotel, you have a restaurant. Right. So they may have food and beverage taxes, they may have liquor taxes, and then you've got the hotel itself, which can be subject to standard sales taxes. And then they have all these convention and visitor bureau taxes and all these other things that go along with staying in a hotel, which jacks up, obviously, the price of your stay. [00:04:59] Speaker A: Right. Because you're checking in and they're like, hey, our room rate is $79 a night. You think you got a great deal. [00:05:06] Speaker B: And then when you check out, how much is it? [00:05:08] Speaker A: A lot more than that. [00:05:09] Speaker B: Like 100 and some bucks. [00:05:10] Speaker A: Correct. [00:05:11] Speaker B: Right. Could have upwards of like 20% sometimes. [00:05:14] Speaker A: And we've all been burned by that. [00:05:15] Speaker B: Right. [00:05:16] Speaker A: I know if you're traveling somewhere, especially post COVID, it's like they're trying to make up some fees. [00:05:21] Speaker B: Yeah, sticker shock. Yes, absolutely. And a lot of people are wondering, like, okay, well, why do these fees exist, right? What are we doing with them? What are governments doing with them? Well, stadium taxes, right? We all like going to watch football games and seeing the Falcons and seeing the Braves and for me, the Seahawks and the Mariners and stuff like that from my hometown in Seattle. But a lot of those stadiums are funded through referendums for transient taxes. Transient taxes being what? [00:05:55] Speaker A: Travelers, tourists, people who don't live in your state. [00:05:58] Speaker B: Right. Because the people who live in the state typically don't want to, what? [00:06:02] Speaker A: Pay for them? People visiting. [00:06:04] Speaker B: That's exactly right. You do not want to pay for these transient occupancy taxes. And so it's like easier. It's like, okay, well, hey, Atlanta is a great town for conventions. We have a know the World Congress center is an amazing convention facility, and we bring a lot of tourism here every single year. So why not have the tourists fund our football stadiums or help fund our football stadium or help fund our Brave stadium or what have you. Outside of just fees that are tacked onto tickets. You also have fees attached onto hotel rooms. Right. That's kind of a big thing. It's not paid by the constituents that we talked about. It's an easy way to supplement the tax base and increase revenue, which is extremely important. And it can fund another. A multitude of things outside of even just stadium fees. I mean, these fees and these taxes can go to police and fire and all the other necessary things, which goes. [00:06:55] Speaker A: To what we've talked about in other episodes, the fundamental fairness of activity in a state. [00:07:00] Speaker B: That's right. [00:07:01] Speaker A: Someone who lives in the state is paying other taxes. Sales tax, property tax, income tax. People coming into the state to visit still have to be protected by fire, police, ambulance, if an accident happens. [00:07:15] Speaker B: That's right. [00:07:16] Speaker A: And someone has to pay for that. [00:07:17] Speaker B: Exactly. And why not do it through. [00:07:19] Speaker A: Exactly. [00:07:19] Speaker B: A transient, transient tax. There you go. Okay. The other thing is, too, as we talked a lot about this, sometimes it is a good place to hide additional revenue. Right. And we talk about hiding revenue. It's not so much that a state or municipality is actually trying to disguise. [00:07:39] Speaker A: I know you're making them sound very sneaky. [00:07:41] Speaker B: They're not sneaky. Well, they kind of are sneaky. [00:07:44] Speaker C: But hiding revenue or hiding fees, it could be either. Or hiding revenue, like from the government. [00:07:50] Speaker B: No, it's actually collecting revenue, but like, more of an easy way to pass a tax to collect additional. [00:07:55] Speaker A: I mean, not what you do on your personal. [00:07:56] Speaker B: Right. Exactly. The fact that your bank account's in the Caymans. We didn't ask any questions. No, that's true. Hiding of revenue. But no, it's much easier to pass when you think about voting on legislation or if you're a constituent that lives somewhere, do you want somebody taking an additional half a percent of your income? Do you want to see a half a percent income tax increase or would you see a penny on gas taxes or a penny on hotel taxes? Right. A penny per dollar. It's a lot easier and it seems a lot less to consume, much more palatable. That's right. [00:08:30] Speaker A: Yes. For a voter. [00:08:31] Speaker B: Exactly. And as you've discussed, you definitely want to vote and approve those bond taxes for education and other kids. Absolutely right. And we want good roads and we want to increase transportation taxes to fund our highways. [00:08:45] Speaker A: We want our cities to look nice. Exactly. [00:08:48] Speaker B: So why not have an easier way except to do this through in one avenue too? Hotels and motels. Right. Have people from even outside the state have to pay for it. Yes. One thing that a lot of people don't understand, though, is that in this modern advent of AirbNBs and VRBOs and all these. [00:09:09] Speaker A: Wait, hold on. [00:09:10] Speaker B: It's verbo now, right? [00:09:11] Speaker A: That's what I was going to say. I just got called out for that, too. It's Verbo, not Vrbo. No, I feel the same. I'm not happy about it. [00:09:19] Speaker B: For those of you who cannot see my look of dismay, I have a look of dismay because I just got. [00:09:23] Speaker A: Corrected on, got a major eye roll. But yeah, I'm sticking with Vrbo. [00:09:26] Speaker B: Can we just make up words? Is that what we're doing now? [00:09:28] Speaker A: I'm fine with that. [00:09:29] Speaker B: Is Verbo going to be in the dictionary? Is there like a definition? [00:09:32] Speaker A: It might be the word of the year. [00:09:34] Speaker B: Oh, my God. Jenny's got her vote in for the word of the year. Verbo. Okay, so anyway, with AirbnBs and Verbose. [00:09:43] Speaker A: You'Re being verbose about verbose. [00:09:48] Speaker B: They are subject to these occupancy taxes as well. And the reason is because when you actually look at the definition of an occupancy tax, and here comes, I guess, Jenny's definition of me being chat GPT with taxes, if you actually go into statute and you read what the definition of or what actually is construed as a short term stay in a hotel, Airbnb and Verbose actually fit that definition. Okay. It's typically anything that is under 30 days. Okay. That's not the standard rule in every jurisdiction. I want people to make sure that you understand that. But for the most part, most jurisdictions adhere to a 30 day rule. So if you're staying somewhere longer than 30 days, it is actually considered to be an extended stay and may not be subject to the local hotel and motel occupancy taxes. After that point, what tax would it be? [00:10:39] Speaker A: After that point, though? [00:10:40] Speaker B: You just have standard sales tax that would typically apply 100% and in some instances no taxes would apply. There are certain jurisdictions that look at those types of stays as being long term stays. It's why you don't pay sales tax on the rent of an apartment. Right. So if you enter into a rental agreement for an apartment or for somebody's house, and you're going to be there for, let's say, longer than six months, then that dwelling would not be subject to either sales or use tax because it's a long term rental of real property. [00:11:10] Speaker A: That's interesting. Why do they not charge? There's no property tax, right? Okay. [00:11:16] Speaker B: Yeah, maybe. Well, there technically is property tax. So apartment complexes are paying property taxes and it's paid by the management company, and it's all a component of your rent, but you don't pay any sales tax in your rent. [00:11:29] Speaker A: What about an extended stay hotel? [00:11:30] Speaker B: Extended stay hotel, it depends on the jurisdiction. And the thing is, again, with extended stay hotels, the rent has a component of quote unquote property tax inside of it. It's a cost. It's part of the cost of goods sold of them actually providing you the room. So it's been accounted for. So they're paying the property taxes. It's just not coming directly out of your pocket. [00:11:50] Speaker A: Interesting. It's not an on top of tax. [00:11:53] Speaker B: Exactly. [00:11:53] Speaker A: Okay. [00:11:54] Speaker B: Yeah. It would be inclusive. [00:11:55] Speaker A: It's not hidden. [00:11:56] Speaker B: No, it's not hidden at all. [00:11:57] Speaker A: Okay. [00:11:58] Speaker B: No. But a lot of jurisdictions will go ahead and continue to pay the sales tax. It's just you wouldn't be subject to the room occupancy or the per room night fees. And that's the other thing we haven't talked about is like, what is the structure of these taxes? [00:12:10] Speaker A: Yes, let's go back. [00:12:11] Speaker B: Yeah. [00:12:12] Speaker A: Structure of tax. [00:12:13] Speaker B: So the structure of taxes typically, as we've been talking here is know historically in our past episodes has been talking about sales and use. Right. Sales tax, use tax, whatever it might be, retailers, occupation tax, a lot of those things, whatever a state wants to call it, transaction privilege tax. Right. In Arizona, TPT, it's all the stuff that basically fits the standard definition of sales and use. Well, these hotel and occupancy taxes truly have different definitions. They have different names because they're based off of different things. It will be based off of a per night fee. So on each room night that it's occupied, you would pay a fee per night. So it'd be fifty cents, two dollars. Some jurisdictions have $3 per night that you charge on an occupied room up until 30 days. You may have a percentage of the total room charge that would be subject to a tax. That would be an occupancy tax. On any nights that would be less than 30 days. So the structure of the taxes are a little bit different. And because of what we call the imposition statutes, the way the taxes actually being imposed. [00:13:16] Speaker A: Super nerdy. [00:13:17] Speaker B: It is super nerdy, but it's the way that they actually draft the law to impose the tax on a taxpayer or ultimately basically on a customer. Consumer. [00:13:28] Speaker A: Now, hold on. [00:13:29] Speaker B: Yeah. [00:13:29] Speaker A: Are these also the rates? Do they still post them on the door in the hotel room? Are they required to do that? Still? [00:13:35] Speaker B: Little known fact. And here comes geek. Yes. Okay, so those room fees that are actually posted on the back of your door is the maximum amount that the hotel can technically charge you per night. [00:13:49] Speaker A: Really? [00:13:50] Speaker B: Yes. [00:13:50] Speaker A: And I assume legally obligated to post that. [00:13:53] Speaker B: That's right. And the reason it is, is to prevent price gouging. Right? [00:13:57] Speaker A: Right. [00:13:58] Speaker B: So if anybody was very familiar, we had a very interesting scenario here in Atlanta a number of years ago, about 15, actually, about 20 years ago, when the NBA All Star Game was in town, and you had certain hotels that were actually charging upwards of $1,000 a night when their average room rate was normally like $129. So like a courtyard or a days in could be charging seven to $800 of what they call a rack rate. [00:14:28] Speaker A: All right, a rack rate. [00:14:29] Speaker B: That's what it is. Racketeering rate. In all honesty, it does kind of seem like a racketeering rate when you're looking at the total value. But what they said was, hey, we're allowed to charge this because our maximum posted room rate on the back of the door is $999 a night. [00:14:42] Speaker A: Oh, for real? [00:14:44] Speaker B: Because what they typically do with hotel rooms is they price, and they see what would happen on an average nightly basis of what they could get for the room. [00:14:51] Speaker A: Okay. [00:14:52] Speaker B: And because the demand was so high during that period, they jacked the rates up through the roof, and people were like, you're price gouging. You're going crazy. And they're like, no, technically, we can legally do this. [00:15:03] Speaker A: Okay, there you go. [00:15:05] Speaker B: There's not really anything to do with taxes, but it's a way for them to post what their range of the rates could be for that room so. [00:15:14] Speaker A: We just recently had the Masters here. I know that's. You can't stay anywhere near Augusta because it's so expensive. But they're allowed to do that. [00:15:23] Speaker B: They are. [00:15:24] Speaker A: Okay. [00:15:24] Speaker B: They are completely allowed to do that. [00:15:26] Speaker A: Okay. [00:15:26] Speaker B: Yeah. And you also hear about the Masters rule, right, with homes and home rentals. [00:15:31] Speaker A: Yes. No. Well, tell me. I've heard about that. [00:15:34] Speaker B: Yeah. So people call it the master's rule. Basically, if you can rent your house up to a maximum of 14 days without having to record that rent as income or as revenue. So you can have someone basically come in and stay in your house and you can rent it out for up to 14 days without having to report any of that income. Yes. As income on your income taxes. [00:15:57] Speaker A: Okay. [00:15:58] Speaker C: So if you do an Airbnb for less than 14 days, you don't have to. [00:16:02] Speaker B: Basically. No. Yeah. It's federal income tax rule. [00:16:06] Speaker A: Oh, it's federal? It's not local. [00:16:07] Speaker B: No. It has nothing to do, I guess, state income tax. I don't know if I think Georgia is the same way, but, yeah, basically it's called the master's rule, so you don't have to report that. Wow. [00:16:16] Speaker A: Okay. [00:16:17] Speaker B: So we've digressed. [00:16:19] Speaker A: Yes. [00:16:20] Speaker B: Gone off. [00:16:20] Speaker A: JB. Bring us back. [00:16:21] Speaker B: Bring us back. [00:16:21] Speaker C: Yeah. I was wondering how much of our Tic tacs we've actually already. [00:16:25] Speaker B: Yeah. And getting into Tic TACs, I mean, obviously we talked about occupancy taxes, right. So with the occupancy taxes, it's basically something that's over and above what a sales tax is. And that occupancy tax can be a percentage. It can be a flat fee. It can be anything that a city or a county or a state would want to impose on the short term rental of a room. So Texas has their own occupancy tax return. Certain counties and cities in Georgia have their own occupancy taxes. Mobile, Alabama, has their own occupancy tax. There's a number of jurisdictions in Alabama that actually do. But then you also have per room night fees. A lot of jurisdictions do this as well. Tennessee, Alabama, a number of other states of where they will actually charge or require, excuse me, a hoteler or a lodger to actually collect per night fees based off a number of taxable nights that they sell in a month in a period. [00:17:24] Speaker A: Tell me about. If I'm going off track. Sorry, JB, but tell me about during COVID and everything was shut down. And I assume all these occupancy fees, hotel motel fees, are a critical source of revenue for a lot of states, especially states say like Florida, I assume that was a big deal. [00:17:43] Speaker B: It was a huge deal. Yeah. It was a massive revenue loss. [00:17:47] Speaker A: Right. [00:17:48] Speaker B: And frankly, it's a very interesting question. And I think this even gets even broader than the economics of tax. I think if you just look at the economics of the lodging industry in general, the lodging industry was impacted. It was crazy, the amount of revenue that was lost. And you have hotels that basically were shuttered during COVID that have actually never come back. Okay. And they won't ever come back. There's a lot of folks in the industry that actually believe that we were overlodged, that there was, in certain jurisdictions, there are hotels that were running average occupancy of 40% to 42%. And that's what you typically look at vacancy rates to look at a success of a hotel. Right. And vacancy rates and occupied room nights. And the thing is, when we looked at over that COVID period, obviously your occupancy went basically to zero. [00:18:45] Speaker A: Right. [00:18:46] Speaker B: And they had nobody to staff the hotels. And that's what you're seeing now too. Like if you've traveled recently, and I'm sure a number of people who are listening have seen this, a lot of hotels haven't gone back to doing daily hospitality service. Room service, room service, yeah, housekeeping, things of that nature. They'll just tell you, hey, if you need your roommate up, give us a call. We'll come up and we'll give you fresh towels. But there's no guarantee that we're actually going to turn down your room or that we're going to do anything. And a lot of that is because of staffing shortages and a lot of the things that were impacted during COVID or because of COVID So jurisdictions lost an awful lot of money as well as the hotel industry, as well as the restaurant industry. We're going to talk about a lot. [00:19:24] Speaker A: Of taxes, but just an interesting thought of if that's a significant source of your revenue for a state, again, like the state of Florida, the state that from, that was a big deal. [00:19:36] Speaker B: It was a huge deal. [00:19:37] Speaker A: Now, have they increased rates now that travel has mostly resumed to try to make up any revenue? Or is it. [00:19:46] Speaker B: I don't know. I haven't really looked at a tracking or to see what the differences were between certain jurisdictions pre COVID and post COVID, how they've actually adjusted their rate base. I can tell you that most jurisdictions are, and for the most mean, we're seeing increases in know in a number of different municipalities across the US, as we normally do with sales and use. Right. But in particular with lodging taxes, I haven't seen just a particular area to be like, holy cow, this is crazy how much they've increased it. [00:20:18] Speaker A: Got it. Okay. Well, that's good to know for us travelers. [00:20:21] Speaker B: For you travelers, yes. [00:20:24] Speaker C: What else? On Tic Tacs? So we got occupancy. [00:20:27] Speaker B: Oh, and exemptions. [00:20:28] Speaker A: Oh, exemptions. [00:20:30] Speaker B: This is actually really kind of interesting. So when you think about exemptions and documenting exemptions, it is a very interesting component of an audit for most lodgers, hoteliers. However you want to say it, for most people in the hotel industry, if you're actually going through an audit, the documentation that you keep for exempt stays is very critical. Certain jurisdictions. A couple come to mind in one of my favorite states, Colorado, that the cities actually in Colorado, because of the way that the laws are written, they're home rule jurisdictions. Right. And we haven't ever talked about this, and I think in the past, when we talk about home rule versus state administered tax jurisdictions, what's the difference, Jenny, what's the difference between a home rule and a state administered tax jurisdiction? [00:21:20] Speaker A: A home rule is basically a locality, not a state tax. It's a city tax, a county tax. [00:21:24] Speaker B: And who are you remitting the return to? [00:21:26] Speaker A: To the state. [00:21:28] Speaker B: But in a home rule, you're remitting it to who typically. [00:21:31] Speaker A: Oh, the city or the county. [00:21:32] Speaker B: That's exactly right. So it's a tax that's imposed by the local jurisdiction that you're ultimately remitting to them. [00:21:38] Speaker A: Right. [00:21:38] Speaker B: Whereas state administered, you may have county taxes like Georgia is all state administered. Right. We have 159 counties that all have their own rates, and we have the city of Atlanta. But it's all put on the Georgia St. Three. [00:21:50] Speaker A: Right. [00:21:50] Speaker B: Whereas in Colorado, city of Longmont, city of Aurora, you remit what, their own returns? [00:21:56] Speaker A: Yes. [00:21:57] Speaker B: Okay. Yes. And the thing is, within those jurisdictions and how they can write their laws, their tax laws, they can require different exemptions than the state does. [00:22:09] Speaker A: Right. [00:22:10] Speaker B: Okay. So they can actually pass their own laws that may be different than the way that the state imposes the tax. And there are a few jurisdictions in Colorado that actually have different laws for documenting exemptions versus the state. Whereas JB decides that he's going to go and stay for 30 days at a courtyard by Marriott. [00:22:29] Speaker A: Dang, JB. [00:22:30] Speaker B: I know. Right? And he's going to go hang out in, let's say, Westminster. And he's hanging the city of Westminster. Exactly. After 30 days, Colorado would say that you're automatically exempt. You don't have to file anything. You don't have to provide anything. It's just on the 30th day, boom, guess what? No more taxes. [00:22:52] Speaker A: So maybe I will save money by staying longer. [00:22:55] Speaker B: You could. [00:22:56] Speaker A: I know you could do that math sometimes. [00:22:58] Speaker B: Yeah. And aren't you taking a vacation soon? Yeah, we need to plan. I know. [00:23:02] Speaker A: 30 days. Sorry. Yeah, I'm going to save money. [00:23:06] Speaker B: Not going to be missed. Just kidding. Anyways, fair enough. But other jurisdictions in Colorado will instantaneously say, okay, on the 30th day, a person has to provide an exemption certificate or sign some affidavit that says that they have an intent to stay longer than 30 days. [00:23:26] Speaker A: Okay. [00:23:27] Speaker B: And if you don't get that intent, guess what? The exemption doesn't apply. We found this out under audits and it's really kind of weird, right? So you have to research the locals of where you're at and understand what their exemption requirements are for documentation before you just start exempting the people that are staying in your hotels. And it's very, very important. And as a person who goes, and if you're going to go and stay at a hotel and you're going to be there for an extended period, you need to know that as well because you don't want the hotel to sit there and keep charging you tax when you shouldn't have to pay it. [00:23:54] Speaker A: Can I just start selling exemption certificates online to people? [00:23:58] Speaker B: Did you really just ask that? No, you cannot do that. [00:24:01] Speaker A: That's not a side hustle. [00:24:02] Speaker B: I can ask. No, there is no side hustle in that. [00:24:05] Speaker A: Okay. [00:24:05] Speaker B: But a lot of these states too, and other municipalities will actually refund all of the tax that you had already paid for that 30 day stay. They would refund it and apply it to your stay. [00:24:15] Speaker A: Nice. [00:24:15] Speaker B: If it's greater than 30 days because they technically say you don't actually owe any of the tax for the entire period. [00:24:21] Speaker A: All right, I'll be working for Masbin for the next month. [00:24:23] Speaker B: Congratulations. Yeah, figure that out. [00:24:26] Speaker C: So you said a good thing to do is to check out one of the local rates. What's a bad way to do that? [00:24:33] Speaker A: Yeah, what's a bad way to check out the local rate? [00:24:36] Speaker B: Using chat GPT, which I think is a real quick segue. [00:24:41] Speaker A: I thought it was the same as your brain, so I'm confused. [00:24:45] Speaker B: Look. Yeah, you can't know everything. [00:24:48] Speaker A: It's not what I hear every day at work. [00:24:53] Speaker B: Well, in all honesty, we actually did some research, and another gentleman that we work with, a great guy, Roy Keeley, was actually talking to us about leveraging OpenAI and leveraging CHAP GPT to do tax research. Right. And so Roy decided to go out and start plugging in some questions into chat GPT and firing them over to me and saying, hey, how do these look for tax research answers? And frankly, it was pretty good. I will say I thought the results were all right. But if you're not phrasing the question correctly, like if I just went in and said into chat GPT, what is the sales tax rate on a hotel stay in Valdosta, Georgia? [00:25:40] Speaker A: It's like jeopardy. You have to phrase it in the form of question, in the correct form of the correct form of the. I can. Okay, I can understand that analogy. [00:25:48] Speaker B: You got. Yes, yes. [00:25:49] Speaker A: Okay. [00:25:50] Speaker B: Because you like jeopardy. [00:25:51] Speaker A: I do. I'm awesome at it. [00:25:53] Speaker B: You're a huge jeopardy fan. Yeah. You're just not so good at tactics. Okay. [00:25:57] Speaker A: Maybe if you did them in the form of a question or I did. Yeah. [00:26:00] Speaker B: You phrased your answer yes. [00:26:03] Speaker A: That would be kind of weird. I know. [00:26:05] Speaker B: But at the end of the day, it would give you a pretty decent response back and give you a fairly broad spread of what the rates might be. But it doesn't tell you this is the exact amount and this is what you should collect. Right. [00:26:22] Speaker A: Got it. [00:26:22] Speaker B: And it even tells you it says, this is not a tax professional's answer. You need to consult a tax professional. So a lot of people ask this question like, oh, my gosh, AI is going to replace my job. AI is going to replace the way that artificial intelligence is going to replace the way that we do compliance and the way that we do tax research and everything else. It's going to be a tool. It's going to be something that I think is going to help us, but it is not going to be the definitive end all, be all research answer because there's a lot of other things that go to, like if I went and I typed in and tested software and I said, is software taxable in the state of California? Well, what kind of software? Yeah, it's a favorite sales tax answer, right? [00:27:01] Speaker A: Yes, it depends. [00:27:02] Speaker B: It depends on the state. [00:27:03] Speaker A: Depends on the state. Dots. [00:27:04] Speaker B: Dots. That's. It depends on the state. And the thing is, it also depends on the circumstance. It depends. Okay. Is it load and leave? Is it can softwarE, is it customized? What is customized software? And you have to get into all these definitions and figure all this stuff out. That's why I think chat GPT and moving into the future is going to be a really interesting tool to help us with our jobs, it's not going to be something that replaces our job. [00:27:30] Speaker A: That makes a lot of sense. It's just not as granular as it needs to be. It sounds like you're asking it a question. It's going to say, it depends. So you have to go do your own research, just like we do every day. [00:27:40] Speaker B: Right? Because, I mean, outside of just looking at statutory guidance, we also have regulations. I have to look at what court cases, right. And understanding how all those things play in and the hierarchy of authority. As it stands right now, artificial intelligence isn't smart enough, I think, to grab all of those particulars and bring them all together and create a definitive answer or a concrete response back and saying, this is an opinion. [00:28:06] Speaker A: Right. But it was pretty fun. I had never touched or done anything with chat GPT until we were researching for this episode and I was like, oh, wow, okay. It is just like a little Google machine. Just type in a question, you can ask it anything. [00:28:22] Speaker B: I know, it's so awesome. [00:28:23] Speaker A: It is awesome. [00:28:24] Speaker B: Yeah. Like, what's your favorite flavor of ice cream? Like, what's the best flavor of ice cream that's out there? And it says, oh, I don't have opinions, I'm just a machine. But the most popular flavors of ice cream are. And then it will spit out like, the top ten most popular flavors of ice cream. And you're like, oh, that's pretty interesting. I wish I could feel like it's. [00:28:40] Speaker C: Just a fancy version of Ask Jeeves. [00:28:42] Speaker A: Right? [00:28:43] Speaker C: I know that works. Remember the ask Jeeves? It just didn't work, dude. [00:28:46] Speaker B: It was terrible. [00:28:48] Speaker A: I wanted to do more like, hey, how does my hair look? Or do these pants make me look fat and even chappie? GPT is like, no, I'm not getting into that. Chat GPT is kind of a husband. [00:29:02] Speaker C: It's like trying to hit on chat GPT is a really good segue into the pop quiz. [00:29:07] Speaker B: I'm just asking so we can Avoid Jenny having a third husband. That's last name is now Chad GPT. [00:29:15] Speaker A: It has a nice ring to it. [00:29:18] Speaker B: Jenny GPT. I don't hate it. [00:29:24] Speaker A: My first name could be Chad, though. [00:29:25] Speaker C: It could be. It very well could be. [00:29:27] Speaker A: I should just change it. Yes. Anyway. Yes. Segue. Not an awkward segue at all. [00:29:31] Speaker B: Pop quiz time. [00:29:32] Speaker A: Pop quiz time. Oh, boy. [00:29:33] Speaker B: All right. Okay, I went first last time, so you get to go first this time. [00:29:36] Speaker A: Okay, well, should I get my. [00:29:39] Speaker C: Yes, it is. Season is two to two to two. [00:29:44] Speaker A: Let me get my chat GBT out here. [00:29:46] Speaker B: And remember, we're moving towards a prize of someone having to read a positive statement about the other individual. [00:29:53] Speaker A: Oh my gosh. Like I said, I'm so excited to do. [00:29:56] Speaker B: It's like the Saturday Night Live bit of them writing each other's. [00:29:58] Speaker A: Yes, yes, I know. [00:29:59] Speaker B: It's going to be fantastic. [00:30:01] Speaker A: Yeah. Colin Joe's to Michael Che. Oh, yeah, it's going to be awesome. We definitely need to write each other some jokes too sometime. Well, I typed in to chat GPT how much is the occupancy tax at Disney World? But that's kind of granular. I feel like it's not really a fair question. Like, how would you know that? [00:30:19] Speaker C: Let's see if he gets it right. [00:30:20] Speaker B: You're asking me what the occupancy tax. [00:30:22] Speaker A: Is at Disney World? What is it at Walt Disney World? Dude, what's the rate? [00:30:25] Speaker B: I'm not a walking rate table. [00:30:27] Speaker A: I thought you were chat GPT. Remember? Didn't they download your brain into chat GPT? [00:30:34] Speaker B: Well, actually it's not city of Orlando. What is that? Weirdo City? It's something park or. No, something Creek. [00:30:41] Speaker A: Reedy Creek. [00:30:42] Speaker B: Reedy Creek. [00:30:43] Speaker A: Yeah, that's in the news a little bit. [00:30:44] Speaker B: Just a little. Take you. I can tell you what the state of Florida sales tax rate is plus what the county rate would be. [00:30:56] Speaker A: Right, perfect. [00:30:57] Speaker B: Eight and a quarter. [00:30:58] Speaker A: Well, what's the sales tax rate in state of Florida? [00:31:03] Speaker B: 7%. No. Oh God, Nick's going to kill me. [00:31:07] Speaker A: He is going to kill. [00:31:08] Speaker B: You said 6%. [00:31:09] Speaker A: Yeah, you got it. [00:31:10] Speaker B: Yeah, it's 6%. [00:31:11] Speaker C: And we said a lot of numbers. [00:31:13] Speaker B: I was rolling every single one back in my brain. [00:31:16] Speaker A: Florida is a little complicated in a. [00:31:18] Speaker B: Lot of ways because a single article. [00:31:19] Speaker A: Surtax I am from Florida, so I can say this. YEs, it is a very strange state, as we all know in a lot of ways. [00:31:26] Speaker B: You have 6%. Let's see, so 6% for Florida. Then you have one and a quarter for Reedy Creek. Is that right? [00:31:32] Speaker A: Well, here we go. This is where I think you're making your point about chat GPT not having all the answers. Let me read this answer. The occupancy tax at Walt Disney World Resort in Florida is currently 6%, which makes sense. But wait, hold on. Is that 6% on top of the sales tax rate? Six should be plus 6%? [00:31:49] Speaker B: Yeah, it should be, because I can tell you it's not just 6%, right? Yeah. You're not just going to charge the Florida rate. You also got to have county and city and everything else in there. [00:31:57] Speaker C: Yeah, I'm going to go with everybody's wrong chat, GBT and Tim. Right, then that means nobody's wrong. Nobody's wrong chat GBT is Tim. [00:32:05] Speaker B: JB, do we have a conversation after? [00:32:08] Speaker A: But listen. Okay. It says this tax applies to the room rate as well as any other fees or charges associated with the room, such as resort fees or parking fees. However, it's important to note that the occupancy tax rate is subject to change. So it's always a good idea to confirm the current rate with a hotel or with a tax professional. So just to your point, isn't that funny? That is kind of funny, is what. [00:32:30] Speaker B: It didn't even mention anything about sales tax. [00:32:32] Speaker A: No. [00:32:32] Speaker B: Which we know the room is going to be subject to sales. [00:32:34] Speaker A: Yeah, it just says the. Well, I did ask. I said, what is the occupancy tax rate at Disney World? And it gave me 6%. [00:32:40] Speaker B: There we go. [00:32:41] Speaker A: But it didn't say, hey, it's 6% on top of 6%. [00:32:44] Speaker C: Tim, what's your question? [00:32:47] Speaker B: Well, not expecting Jenny to just like, absolutely nerd out, what is the typical length of a stay for a room to not be considered taxable? [00:32:58] Speaker A: Oh, I was just learning about this a few minutes ago, wasn't I? [00:33:04] Speaker B: Yes, you were. [00:33:05] Speaker A: 14 days. [00:33:06] Speaker B: 30 days. [00:33:06] Speaker A: Oh, I thought it was 14 days. [00:33:07] Speaker C: I remembered that. [00:33:08] Speaker B: 130 days. [00:33:09] Speaker A: Well, I knew it was 30 or 14, but what's the four? Is that extended stay? [00:33:14] Speaker B: I didn't mention anything about 14. [00:33:15] Speaker A: Yes, he did. [00:33:16] Speaker C: I don't believe he did. [00:33:17] Speaker A: Yes, he did. He did say 14 days. [00:33:20] Speaker B: I swear to God. [00:33:21] Speaker C: Phil says no, too. [00:33:22] Speaker B: Yeah, Phil, for real, Phil working the board back there is like looking at Jenny like she's crazy. [00:33:28] Speaker A: Where did I get 14 days from? [00:33:30] Speaker B: I don't know. Awesome. Well, at least we've evened the score. [00:33:33] Speaker C: All right, what's your seC, Jenny? [00:33:35] Speaker B: Question? [00:33:36] Speaker A: I am going to listen back to this tape. I know for sure there was 14 days in there somewhere. [00:33:39] Speaker B: Okay? [00:33:40] Speaker A: Yeah. Okay. Well, this is a softball. I don't know, but I just asked GPT this while we were talking about Disney World. What happens if I own a hotel and don't charge occupancy tax? [00:33:57] Speaker B: What happens if you own a hotel and do not charge occupancy tax? You're going to get assessed by the local jurisdiction with penalties and interest, typically under an. [00:34:10] Speaker A: Mean chat. GPT is not messing around. It says if you own a hotel and do not charge occupancy tax, you will be in violation. Result in penalties, fines or legal action. Failure to do so could result in charges of tax evasion, which can carry serious consequences, including criminal charges and fines. So chat GPT is also your mom. [00:34:32] Speaker B: Yeah, chat GPT seems a little bit stricter than even Tim Howe, which is crazy. [00:34:36] Speaker A: Yeah. So that's definitely not from your brain. [00:34:38] Speaker C: I love your next question. [00:34:40] Speaker B: My next question is, if it is not a sales tax, what's another name for a hotel based tax? [00:34:48] Speaker A: Occupancy tax. [00:34:49] Speaker B: There you go. Look, that's a softball. [00:34:51] Speaker C: Softball. We've been talking about too much. [00:34:52] Speaker B: I mean, dude, I had to throw one out there. [00:34:55] Speaker C: All right, last question, Jenny. [00:34:57] Speaker A: Well, I kind of muffed this because we talked about it earlier. What is a stadium tax? [00:35:03] Speaker B: What is a stadium tax? I know it's a tax that's either levied on to a hotel occupant or it could be a restaurant charge or it could be even a car rental type charge, depending on the location that will fund the building or construction or even maintenance, future maintenance of a stadium. [00:35:26] Speaker A: But people, constituents have to vote on that, right? Or not, because there have been in the history of the world, stadiums that were not built because they couldn't pass. [00:35:37] Speaker B: A stadium tax 100%. And in a lot of jurisdictions, those types of taxes do require constituents to actually vote on them. You can't just make up a tax. [00:35:47] Speaker A: Right? [00:35:49] Speaker B: That's the great thing about the United States of America and living, you know, no taxation without Washington, DC. [00:36:00] Speaker A: It's on their license plate. I'm just saying. [00:36:04] Speaker B: But the fact is Boston Tea Party, get back to the American Revolution and hey, guess what? That was one of our biggest arguments. Like we had no say in the King dropping taxes on us. And that's the whole point here, is that we have to have some form of say in our tax rate increases and new taxes that are created and other types of things. And we talked about this in a previous, another episode about how they pass certain fees in other states without people being able to vote on them and they just kind of snuck them into the budget. Right. And that's a big no no. [00:36:35] Speaker A: And we will not mention those states again as to not offend them. [00:36:38] Speaker C: We've already been written down. [00:36:40] Speaker A: We're already going to be audited. [00:36:41] Speaker C: We already have to apologize. [00:36:42] Speaker B: All we got to say is they love John Denver. [00:36:47] Speaker A: Who doesn't? [00:36:48] Speaker C: Last question, Tim for Jenny. [00:36:50] Speaker B: All right, last question for me. What is a type of documentation that was required for a government exemption in a hotel room? [00:36:57] Speaker A: It's a certificate. [00:36:58] Speaker B: What kind of certificate? [00:36:59] Speaker A: A long term stay certificate for 30 days. [00:37:04] Speaker C: You think all the answers are just 30 now. Maybe that 30. [00:37:10] Speaker B: It's a governmental exemption certificate. [00:37:12] Speaker A: Oh, that's so dumb. Okay, governmental. [00:37:14] Speaker B: And what can that be? You could be. A photocopy of a government ID is sometimes acceptable. Sometimes they actually have to have an exemption form that says that they're a government employee and they have to fill out this special form. Always check with the front desk, always. [00:37:27] Speaker A: Check with the hotel or check out my online store where I sell all the exemption certificates. [00:37:32] Speaker B: Jenny does not sell exemption certificates. [00:37:34] Speaker C: Well, she done. She did get two points and two points for Tim. So we are still at this point deadlocked. Deadlocked. [00:37:41] Speaker A: I feel like I should get minus points, though, for the 14 days. [00:37:44] Speaker C: Just wrong. [00:37:45] Speaker A: No, I don't like being wrong, though. [00:37:47] Speaker C: Not one is negative one. [00:37:49] Speaker A: I know. [00:37:50] Speaker C: That's math. [00:37:52] Speaker B: The biggest thing to remember, I think, and take away from this entire episode is just the complexities of owning and operating a hotel and even the idea of an like we didn't even talk about in Florida. If you actually have a rental property in Florida that you technically have to file property tax returns. Like if you're actually doing vacation rentals in Florida, short term vacation rentals in Florida carry natural sales tax with them. This actually predated Airbnb and Verbo. Verbo, I guess. But anyways, you actually would have the requirement to file a sales tax return in the state of Florida if you actually did short term rentals. [00:38:33] Speaker A: Real quick. Maybe a quick tic Tac. If you are interested, say you own a house in Augusta and you're interested in turning your house into an Airbnb, what do they need to know? [00:38:43] Speaker B: What do they need to mean? And a lot of it is like in Georgia. First, I'd research with the local jurisdiction to see if there's occupancy taxes that are imposed on Airbnbs or verbose. Okay. It'll automatically tell you, like, if you go to the jurisdictional website, if you go to the city of Augusta, or if you even go to the state of Georgia website and you type in and you actually look, is my Airbnb subject to sales tax in the state of Georgia? It will give you the guidance as to what those particulars are and what you need to register for. Again, consult with a tax person. Right now. I don't want every single person who out there is owning an Airbnb. [00:39:24] Speaker A: Yes, call Tim. Here's a cell phone number. [00:39:29] Speaker B: But in all honesty, do some easy research and it will tell you if you're actually subject to it. If you're subject to paying property taxes, like business, personal property taxes on the furniture and stuff like that that you own if you decide to turn this in. Some of them have length of stay requirements, too, or length of rental requirements. [00:39:44] Speaker A: That's the 14 days. [00:39:45] Speaker B: What's that? [00:39:46] Speaker A: I think the Airbnb exemption. [00:39:49] Speaker B: Thinking of what you were thinking about is a master's. [00:39:52] Speaker A: Knew it. [00:39:53] Speaker B: Yeah, the master's exemption. [00:39:54] Speaker A: Whatever. JB. [00:39:55] Speaker C: That one's on. Phil. [00:39:56] Speaker A: No. [00:39:57] Speaker B: Yeah. [00:39:57] Speaker A: You are all wrong. Surprise. [00:39:59] Speaker B: But the master's exemption had to do with income tax. Has nothing to do with this. [00:40:03] Speaker A: I just knew there was 14 days. [00:40:04] Speaker B: Okay. Yes. Well, anyways, we like to close this out. Yeah. [00:40:08] Speaker C: We have a list of people who need to apologize. [00:40:11] Speaker A: Okay. [00:40:11] Speaker C: The Verbo marketing team, they worked hard on that. I'm sure, Phil, for you trying to break the mic. [00:40:19] Speaker A: Phil. Oh, I'm so sorry. [00:40:21] Speaker C: Colorado again, makes the list. [00:40:23] Speaker B: Why did Colorado make the list? [00:40:24] Speaker C: I can't remember. But we said something, man. [00:40:26] Speaker B: Look, I have family that lives in Colorado, so just understand that I love that state, but I think you called them weird. [00:40:33] Speaker A: Maybe. [00:40:34] Speaker B: Look, the altitude messes with them. I think it messes with their legislative ability. But anyways, that's a pretty good apology. [00:40:41] Speaker C: Yeah, sorry, Colorado, the altitude messes with your legislative ability. Okay, then you have to apologize to Jenny for saying you won't miss her during her vacation. [00:40:49] Speaker A: Yeah, sorry, Jenny. Yeah, it sounded legit, too. [00:40:54] Speaker C: The people of kind of. They've got enough going on. [00:40:59] Speaker A: Yeah. [00:41:00] Speaker C: And then Jeopardy fans. You said Jeopardy fans with a slight disdain in your voice. [00:41:05] Speaker A: I didn't appreciate that. [00:41:06] Speaker B: I'm actually a big jeopardy fan myself. I used to watch it with my. [00:41:09] Speaker C: Dad all the time and I actually couldn't tell Washington, DC. Do we need to apologize to them? [00:41:12] Speaker A: No, I was sticking up for them. [00:41:16] Speaker C: I feel like way he says no makes me think the answer is yes. [00:41:19] Speaker B: Look, they're not our 51st state, okay? [00:41:23] Speaker A: We'll cover that more in our region, regional topics. We'll do a deep dive on DC. [00:41:30] Speaker C: Close it out. [00:41:31] Speaker B: All right. Thank you very much. If you, as always, have questions or if you want to help ride our show, you can call in and leave us a message and we'll be happy to address those questions. Or you can contact us, leave comments, and actually write a review. We'd love to hear a review of the podcast. It's a great way to get our name know. Thank you very much for listening. Thanks, Jenny. [00:41:54] Speaker A: Thank you, Tim. I learned a lot today. [00:41:55] Speaker B: Good. I'm glad you did. JB, as always, thanks for keeping us between the dishes. [00:41:59] Speaker A: Yes. [00:42:00] Speaker B: Awesome. Love it. [00:42:01] Speaker A: Talk to you all next time. [00:42:02] Speaker B: Bye bye bye. The.