Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › GROSS RECEIPTS TAX RULES › Rule 006.05.06-005-GR-8 - SERVICES SUBJECT TO TAX-LODGING

Current through Register Vol. 49, No. 6, June, 2024
A. The service of furnishing rooms, suites,
				condominiums, townhouses, rental houses or other accommodations to transient
				guests by hotels, motels, apartment hotels, lodging houses, tourist camps,
				hunting lodges, tourist courts, bed and breakfast properties, property
				management companies or any other provider of accommodations to transient
				guests is subject to gross receipts tax.
B.
1.
				"Transient guests" are defined as those who rent accommodations other than
				their regular place of abode on less than a month-to-month basis.
2. "Month to month" means a rental that
				satisfies the following criteria:
a. Rental
				payments are due in monthly installments for a monthly rental period;
				and
b. Thirty day notice of
				termination is required for either party to terminate the lease; and
c. The obligation of the renter to pay the
				monthly rental is unaffected by the renter's decision to leave the
				accommodations before the end of the monthly period (i.e. the entire month's
				rent is owed regardless of the renter staying at the accommodations the entire
				month).
3. A rental
				shall not be considered "month to month" if any of the following criteria are
				present in the rental arrangement:
a. The
				renter can terminate the stay without notice and obligation to pay ceases upon
				termination of the stay; or
b. The
				rental payment obligations accrue on daily or weekly increments regardless of
				the billing frequency.
4. Examples.
Example 1: Renter A rents a room from a hotel for a 6 month
				  period. Renter A owes the monthly rental payment for the entire month at the
				  beginning of each month. Renter A shall give a 30 day notice if A wants to
				  terminate the rental prior to the end of the 6 months. Renter A is not a
				  transient guest and the rental is not taxable.
Example 2: Renter B pays daily. Renter B occupies the rented
				  accommodations for a period of 34 days. Renter B does not pay, and is not
				  obligated for the payment of days other than the 34 days of occupation of the
				  accommodations. Renter B is a transient guest, and tax should be collected on
				  the daily charges.
Example 3: Renter C is staying at the accommodations
				  indefinitely. Renter C pays the bill at the conclusion of each month. Renter
				  C's bill accrues daily charges. Renter C can leave the accommodations at any
				  time. Renter C is a transient guest and tax should be collected on the entire
				  term of the rental even though Renter C occupied the accommodations for longer
				  than 30 days.
Example 4: Renter D company has a contract calling for the
				  rental of a certain number of rooms on an annual basis. Different people stay
				  in the rooms each night and different rooms within the hotel are used for this
				  purpose. The company is not a transient guest and tax is not required to be
				  collected on the rental charges.