”   .




                           ‘.
                                OF       TEXAS

                                AUSTIN     PI. Texan


                                     September 21, 1959

        Honorable Robert S. Calvert    Opinion No. ~-706
        Comptroller of Public Accounts
        Capitol Station                Re: Applicability of H.B.
        Austin 11, Texas                    11, Chapter 23, 3rd
                                            Special Session, 56th
        Dear Mr. Calvert:                   Leg., to hotels.
                 By letter dated August 28, 1959, you have requested
        an opinion on certain questions dealing with the new hotel
        occupancy tax. Since your questions are numerous, each
        wlll~be stated and answered individually.
                 Question No. 1: Is the character of accommodations
        taxed by the new act limited to sleeping rooms?
                Answer: Article 23.02(a) of House Bill 11 provides:
                  "There IS hereby levied a tax upon the
                cost of occupancy-of any EQpm or w
                furnished by any hotel where such cost
                                   the rate of Two Dollars
                                      such tax to be equal to
                                        paid by the occu-
                pant. . .'
                Occupant is defined In the Act as:
                  I,
                   . . .anyone, who, for a consideration,
                uses, possesses, or has the right to use
                or possess any room or rooms In an
                under any a,     concession, perm+,hZiit
                                 contract
                of access, license,
                -                            or agreemen .'
                 It Is apparent that the.Hotel Occupancy Tax is not
        limited to sleeping rooms, but is collectible on the price
        charged for any lease, concession, right of access, license,
        contract, or agreement for any room or space in a hotel.
                 Question No. 2: .If the tax Is collectible upon other
        than sleeping rooms, is it collectible is situations where a
        hotel owns or has control of a building or space located
        separate and apart from the hotel Itself, but which on occasion
        may be used for certain functions by people, including guests
        of the hotel?
Honorable Robert S. Calvert, Page 2   (Opinion No. ~~-706)


         Answer: The term "hotel" means any buildin or
buildings in which the public may, for a consdn:obtain
sleeping accommodations. Art. 23.01(a), H.B. 11. Such
tax is to be levied upon the cost of ---4+&p~~c;jtym~~~~m"~
                                     occu ant
as defined above. Art. 23.02,  H.B. ii.
the use or possession, or the right to the use or possession,
of any room or rooms & a hotel. Art. 23.01(c),   ~3. il.
It Is clear that the tax Is not collectible on rentals or
char.gesimposed on buildings owned by a hotel, which are
           se arate from the hotel and which are not used
!?kFegr*           letting sleeping accommodations.
         Question No. 3:  In Instances where a hotel extends
credit to a guest, is the tax due when occupancy occurs, or
when the account Is actually paid?
         Question No. 3A:  Is the tax due In cases where
guests leave w~lthoutpaying their bill, thereby becoming
what is known In:the trade as "skippers"?
         Answer: The tax,18 levied upon the consideration
paid by the occupant. Art. 23.02, H.B. 11. The tax Is to
be collected by the hotel. Art. 23.03, H.B. 11. Article
23.04 provides:
          "On the last day of the month following
        each quarterly period, every person required
        In Article 23.03 hereof to collect the tax
        imposed herein shall file a report with
        the Comptroller showing consideration paid
        for all room occuuancles In the Drecedinn
        quarter, the amount of -.
                               tax collected on such
                     and any other Information as the
                    may reasonably require. Such
        person shall pay the tax duo on such oczupan-
        clesat the time of filing such report.
        (Enphasls added;)
         The foregoing language clearly indicates that the
tax Is due from the hotel only In cases where the consideration
has been collected from the occupant. Consequently where a
person la given a complimentary room or "skips" with?& paying,
no tax Is due, since no consideration has been paid.   For
the same reason the hotel need~not remit taxes~due on accounts
~wherecredit has been extended until the cost of ocoupancy
has actually been paid by the occupant.

1
 It should be noted that anytime a "skipper" Is brought to heel
 and made to pay, the tax is due from the hotel.
..   ‘.




          Honorable Robert S. Calvert, Page 3   (Opinion No. ~~-706)


                   Question No. 4: How Is the tax collectible
          upon the "American Plan," I.e., the system under which a
          guest pays lump-sum for meals and lodging?
                   Answer: The tax Is upon the cost of occupancy
          and not upon the cost of meals. Art. 23.01(b), H.B. 11.
          Consequently, such cost must be segregated ln20rder to
          calculate the tax upon the cost of occupancy.
                   Question No. 5: .Is the tax to be paid upon the
          rentals of equipment such as television sets and radio sets
          that are not an Integral part of the furnishings of the room?
          Is It levied In situations where air conditioners are rented
          wholly separate and apart from the room rental?
                   Answer: Again, the tax is upon the cost of occupancy.
          Where radios, TV sets or air conditioners are rented separate
          and apart from the room, and a separate charge made therefor,
          the tax does not apply. However, in situations where no
          separate charge Is made.and the air conditioner, radio or
          TV set Is furnished with the room, the tax Is levied on the
          total cost of occupancy.
                   Question No. 6:  In situations where a lessee occupies
          a space under conditions that the term of his occupancy Is
          not known at the time he takes possession, is the tax applicable
          for the first 30 days of occupancy even though the lessee
          remains in possession for more than 30 days?
                   Answere: The hotel occupancy tax 1s not imposed
          upon a "permanent resident." The term "permanentresident"
          Is defined by the act asz
                         .any occupant who has or shall have
                  the ri ht to occupancy of any room or rooms
                  '1.
                  In t e otel for at least 30 consecutive days
                > durlns the current calendar year or preceding
                  year.

          2
          -In this conneatlon we note that the Department of Revenue
            of the state of Pennsylvania has adopted a regulation whereby
           a certain percentage of the total cost Is allocated to meals.
           This is a procedure your department may deem expedient In
            administering this particular aspect of the Act.
Honorable Robert S. Calvert, Page 4   (Opinion No. ~~-706)


A peraon Is a permanent resident If he enters possession under
a lease having a term of at least 30 or more consecutive days,
since he has the right to occupancy for such term. However,
In Instances where the original lease term~or commitment Is
less than 30 days, the occupant does not achieve the status
of a permanent resident until he has actually occupied the
premises for 30 consecutive days. Therefore, in such situations,
the person would owe the tax for the first 30 days; thereafter,
he would be relieved of the tax because of his status as a
permanent resident.
         Your last question Is directed to whether or not the
tax applies to rooms rented from hotels by the Federal Government
when moving draftees to reception centers.
         It is well settled that In the absence of express
federal permission the State cannotlevy an excise or use tax
upon an Instrumentalityof the Federal Government. Attorney
General's Opinions No. W-598 and h'W-582. Therefore, under
the facts stated, you are advised that the tax Is not applicable.3



             The character of accommodations taxed
        under the new hotel occupancy tax Is not limited
        to sleeping rooms, but Is not collectible on
        buildings physically separated from the hotel
        not used for letting sleeping accommodations.
              The tax is due upon the consideration
         actually paid for occupancy and at the time
         of payment thereof.
             The tax is not due upon food served pur-
        suant to the "American Plan," nor is It due
        upon radios, televlslcnsets or air conditioners
        rented separate and apart from a room and for
        which a separate charge Is made.
              A person is a "permanent resident" ff he
         enters occupancy under a leasg the duration
         of which is at least 30 consecutive days, or
         if he has actually occupied a room or space
         for at least 30 consecutive days.

3
 This opinion is limited to instances where rooms are actually
 rented and used by or on behalf of a Federal instrumentality
 in the course of Its official functions.
Honorable Robert S. Calvert, Page 5    (Opinion No. ~~-706)


                 The tax does not apply to rooms rented
            to the Federal Government In the course of
            moving draftees'to reception centers.
                              Yours very truly,
                              WILL WILSON
                              Attorney General of Texas



                              By%&Assistant
JNP:cm
APPROVED:
OPINION CC+MITTEE:
Geo. P. Blackburn, Chairman
John C. Steinberger
Robert T..Lewis
Ernest John Flowers
Milton J. Richardson
REVIEWED FOR THE ATTORNEY GENERAL
By:   ‘W.   il.GEPPERT
