Wyoming: When OTCs Must Collect and Remit Sales Tax
- Dec 10, 2014 | Gail Cole
Effective January 1, 2015, any person or business facilitating hotel room reservations in Wyoming Department of Revenue. Such businesses must then collect and remit applicable sales and lodging tax “as applied to the hotel room rate ‘mark-up’ and to any additional fees” charged to the customer for the business’ services. This change is the result of the State of Wyoming Supreme Court ruling in Travelocity.com LP v. Wyoming Department of Revenue, which regards the booking of hotel stays by online travel companies (OTC) utilizing the merchant model.
In the merchant model, an online travel company (or similar business) “facilitates the customer’s reservation for the lodging services with the hotel and charges the customer’s credit card for the room rate and applicable taxes on the room rate, as well as a mark-up on the hotel room rate and additional fees for the business’ services.” The OTC then remits the agreed upon room rate and associated tax to the hotel, while retaining the mark-up and additional fees.
Under this model, the OTC is not responsible for remitting to the Department of Revenue sales tax collected on the room rate (which it remits to the lodging establishment itself). It is responsible for collecting and remitting tax on hotel room rate mark up and any additional fees it charges and retains. OTCs must maintain detailed records related to these taxes.
For their part, lodging establishments entered into an agreement with an OTC or similar business (using the merchant model) “shall be responsible to the Department of Revenue only for collection and remittance of sales and lodging tax on the hotel room rate.” Lodging establishments must maintain detailed records on these amounts.
Additional information is available on this Department of Revenue important notice.
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