” . 

‘. 

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 occupant. . .' 

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, 

of access, license, 

perm+,hZiit 

- contract 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 occu ant 

as defined above. ---4+&p~~c;jtym~~~~m"~ 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.ges imposed 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~lthout paying 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 oczupanclesat 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 

~where credit 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 "permanent resident" 

Is defined by the act asz 

.any occupant who has or shall have 

'1. 

the ri ht to occupancy of any room or rooms 

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 Instrumentality of 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 pursuant 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