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Hospitality & Tourism

Based on work of the Georgia’s Hotel & Lodging Association, Dept. of Revenue forced to implement “emergency” changes to new $5.00 per night tax on hotel rooms across Georgia

Category: Hospitality & Tourism














PHOTO:  Holiday Inn, Brunswick, GA.


By Lou Phelps, Coastal Empire News


June 29, 2015 - The Georgia Hotel & Lodging Association (GHLA) released its testimony provided last Friday at a hearing in Atlanta before Lynnette T. Riley, Commissioner of the State of Georgia’s Department of Revenue. The GHLA was seeking changes to the new “State Hotel-Motel Fee,” passed by the Georgia legislature, including some “emergency” changes.


As of July 1 this week,  an additional $5.00 fee much be paid to the State for every room night in a hotel that is not tax exempt by Federal exemption, including all inns or short-term stay rental, to help fund transportation infrastructure in the State.


Which counties will get the money, projected to raise $1 billion annually, is based on population.  Therefore, Atlanta will get 75% of the money collected across the state.


Originally founded in 1907, GHLA is the only statewide organization representing Georgia’s lodging industry, according to James Sprouse, Executive Director of GHLA.


Hundreds of hotel owners, general managers, and hotel professionals across Georgia look to GHLA as a resource to help them to effectively manage their properties and advocate on their behalf at the state and local level.  Members include bed and breakfast owners, independent hotel owners, and small, medium, and large scale branded properties across Georgia.  


“Georgia’s lodging industry is a cornerstone to the State of Georgia’s economy and workforce, generating $1.6 billion in tax revenue for state and local governments; accounts for 7.6 percent or 40,353 jobs for Georgians; produces $1.2 billion in employee wages, and creates 44.8 percent of new jobs within Georgia because many of its members operate as small businesses – where new jobs are being created across the U.S., as well as in Georgia.   


“While GHLA appreciates the Department’s role in implementing the Rules, GHLA believes that additional revisions are necessary to ensure that Georgia’s lodging taxpayers do not bear an unreasonable and disproportionate burden in funding the state of Georgia’s transportation needs,” the organization stated in a filing heard today.    


And, it’s a little known statistic, but it is actually Georgia residents that account for 8 million to 12 million room nights within Georgia annually, according to GHLA.  Therefore, the new tax is a burden to local taxpayers.  “The Fee’s implementation will disproportionately impact Georgians who purchased 66 percent of the hotel nights last year and will cost Georgians $40 million a year,” they state.    


GHLA is asking the Department of Revenue to make four primary changes to the proposed rules:  


1. Revise the Rule on the Liability of Innkeepers and Third Parties so that Third Parties are responsible for remitting the State Hotel-Motel Fee.  


2. Amend certain language on Complimentary Accommodations.


3.  Modify the proposed rule for extended stay rentals so that it no longer conflicts with House Bill 170 and House Bill 106 as adopted.    


4. Create an exemption for existing contracts signed prior to July 1, 2015.  


“Georgia’s tourism industry competes daily with surrounding states and other leading cities and states. Our state’s competitive advantage depends upon the fragile intersection of supply and demand. It costs more to acquire a new convention and/or corporate customer than to retain an existing convention and/or corporate customer. Not subjecting existing contracts to the fee would avoid any negative "bait and switch" perceptions created by applying the Fee to previously negotiated rates,” explains GHLA.   


And then, there is the issue of how many hotel rooms are booked through ‘third party’ companies – through online companies such as,, etc.  In GHLA’s opinion, third parties making hotel reservations on behalf of hotel customers are best positioned to collect the Fee at the time of booking, not the hotel.  The legislation says that the Dept. of Revenue will come after the hotel for the fees.   GHLA wants the bill changed to say, “Therefore, the revised language would read as follows: “the Department shall assess and collect state hotel-motel fees from the third party”.  


They also want no fees due on Complimentary Accommodations, which are non-revenue generating transactions.  “Within the hotel industry, complimentary rooms are often provided to a guest with no expectation of current revenue or future revenue,” according to GHLA, which provided 11 examples of when “CA’s” are provided in the normal course of business.  For example, complimentary rooms are often provided to tour guides, travel representatives, and other marketing and media professionals.


And, then there is the issue of rooms purchased with reward points. GHLA believes they should be treated as complimentary rooms and not be subject to the Fee because no revenue is derived room the room.  When a guest redeems reward points to book a room, the hotel does not derive revenue for that guest.


When it comes to Extended Stays, often used by corporate visitors or traveling military personnel, the language of the new bill is confusing. According to GHLA, the language in the multiple bills enacted to institute the new fee conflicts.  One bill states, “The first 30 days of the rental are subject to the fee and will not be refunded even if the rental becomes an extended stay,” and another says, “each innkeeper in this state shall charge a $5.00 per night fee to the customer, unless it is an extended stay rental, for each calendar day a hotel or motel room is rented or leased.”


The Dept. of Revenues issued some “Emergency Rules” later on Friday to ‘clean up’ some of the problems with the legislation. 


A primary concern is the lack of advanced vetting the bill received, which was passed on the last day of the session, pushed by Governor Deal, with virtually no hearings.   


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