Roughing it: Camping taxes are complicated – Wacky Tax Wednesday
While Memorial Day Weekend means three days of relaxation and fun for many Americans, it marks the start of the busy season for campgrounds. There are more than 15,000 campgrounds and RV parks in the United States, and from this weekend through Labor Day, many of them are full. Some are rustic, offering no hookup and minimal facilities. Others are more deluxe, with fitness centers, heated pools, movie theaters, and cocktail parties. These extra amenities can help increase bookings, but they can also complicate sales and use tax compliance for the businesses that offer them.
A variety of taxes typically apply to any type of lodging. Even New Hampshire, which has no sales tax, levies a Meals and Rooms (Rentals) Tax on campsites (except those located on U.S. government property). In many states, taxes vary depending on the type of lodging or the entity that operates it (i.e., privately or government owned).
It would be too great a task (and too boring a read) to describe here how all 50 states tax each and every charge associated with camping. After all, the Wisconsin Department of Revenue alone devotes an astonishing 26 pages to this topic in “Campgrounds, How Do Wisconsin Sales and Use Taxes Affect Your Operations?” There are a mind-boggling number of different charges associated with even the most rustic camping, from fees for electric hookups to self-service laundry machines and sewage disposal. Read on to learn just a few of the quirky camping tax rules you may encounter this Memorial Day Weekend.
Florida: Rental charges at Florida trailer camps, RV parks, and certain mobile home parks are generally taxable. However, if more than 50 percent of the total rental units in these facilities are “occupied by tenants who have continuously resided there for more than three months,” the rental units may qualify for an exemption from transient rental taxes. Businesses in that situation should file a Declaration of Taxable Status – Trailer Camps, Mobile Home Parks, and Recreational Vehicle Parks (Form DR-72-2) with the Florida Department of Revenue, and not exempt any sale unless the department okays it.
Idaho: Both the state sales tax and the travel and convention tax apply to privately operated campgrounds in Idaho, although the travel and convention tax doesn’t apply to day use fees. Only sales tax applies to campgrounds operated by the state and its political subdivisions. Local option taxes may also apply to camping fees.
Minnesota: Minnesota sales tax applies to admissions to all recreational areas, even those owned and operated by the state or local governments. Charges for campsites are exempt if the rental period is 30 days or more, provided there is an enforceable written agreement requiring the lessee or lessor to give notice before terminating the agreement. Fees for electric or water hookups are also taxable.
Wisconsin: Lodging services provided for a continuous period of one month or more are exempt when the lodging is in a hotel or motel; however, admissions to campgrounds are taxable no matter how long the stay — unless the campground is in a Wisconsin state park. For customers, fees for sewage disposal are exempt, but fees for electricity (both included and optional) at a campsite are taxable. Yet only optional and separately stated fees can be purchased as an exempt sale for resale by the business.
Charges for campsites are not subject to tax in Connecticut, New Jersey, New York, Pennsylvania, or Texas, but they are subject to a 3 percent tax in Montana — one of the few states without a general sales tax.
It’s fun to get good and dirty from time to time, but there comes a point during all camping excursions when cleanliness is a must. Many states encourage cleanliness by exempting it. Self-service laundry services are a nontaxable sale in Minnesota, Nebraska, Pennsylvania, and South Dakota. In fact, self-service laundry services are only taxable in three states: Hawaii, New Mexico, and West Virginia. Remember that when embarking on a cross-country camping trip, and plan accordingly.
Minnesota and South Dakota are among the states that also exempt coin-operated showers.
Lots of camping-related activities are free, but some come with a fee, and some of those fees are taxable in certain states.
Although boat launching and slip rental fees are exempt in Minnesota, the renting of boats, canoes, motors, life jackets, and a variety of other recreational items is taxable. Boat rentals are also taxable in Maryland and New York.
All activities related to water sports, including equipment rentals, are subject to sales tax in Washington. Campgrounds that offer yoga, tai chi, and chi gong (think “glamping”) may also have to charge tax on those services.
The campground store
My kids always love stopping by a campground store, each time hoping to talk Mom and Dad into buying a tasty treat or souvenir. My husband and I always appreciate them most when backcountry camping — last summer, we’d have happily paid extortion markups for a new water filter after ours stopped working five miles up the trail.
Each item in a campground store is either taxable or exempt per state and local laws. As a result, businesses must keep an eye on rates and rules for everything that’s sold. Local tax rates in many parts of the country change frequently, and product taxability changes also periodically occur. Sometimes this is due to statutory changes, and sometimes it’s because of sales tax holidays.
For example, campgrounds in Vermont need to be aware that a wide variety of sugary beverages became taxable in July 2015. Arkansas campgrounds with a store need to know that diapers, hats, rainwear, and numerous other products are exempt from sales tax during the state’s annual sales tax holiday, which normally occurs the first full weekend of August. In Pennsylvania, camp stores need to tax ready-to-eat food but exempt candy, gum, and firewood bundles. In Minnesota, firewood bundles are taxable. And so on.
If you have the luxury of relaxing over Memorial Day and are heading back to nature, take a moment to consider — and appreciate — the businesses that are open for you.
If you’re a business owner, consider how tax automation software can simplify sales and use tax compliance and free your time for other activities. Like going camping.
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