Kara Sears
Oklahoma's hotel tax law is a complex system that involves various taxes, exemptions, and regulations. The state imposes a sales tax on lodging and meals, with a specific rate for each, and additional city sales taxes apply as well. Understanding the intricacies of these laws is essential for hotel operators and short-term rental hosts to ensure compliance with tax collection and filing requirements. Non-compliance can result in penalties, interest payments, or even legal consequences. Certain exemptions from lodging and sales taxes are provided for specific entities and individuals, such as government employees on official business. This overview highlights the fundamental aspects of hotel tax laws in Oklahoma, but further exploration is necessary to grasp the detailed provisions and their implications.
| Characteristics | Values |
|---|---|
| State sales tax | 4.5% |
| City sales tax | 8.375% |
| Lodging tax due date | The last calendar day of the month following the date of collection |
| Lodging tax return frequency | Monthly |
| Exemption from sales tax liability | Colleges must be a part of the Oklahoma system of higher education or accredited by the Oklahoma Board of Regents for Higher Education |
| Exemption from lodging tax | Persons conducting business for the State of Oklahoma, Oklahoma municipalities, Oklahoma public schools, or other political subdivisions of the State |
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What You'll Learn
State and local hotel taxes
In Oklahoma, state sales tax is levied at 4.5% on lodging and meals, with an additional city sales tax of 8.375%. However, sales tax does not apply to charges that are already taxed by hotel tax. Hotel or motel operators with a sales tax permit can purchase food and drinks exempt from sales tax when provided as part of a packaged room rate.
Hotels in Oklahoma must collect lodging taxes from guests, which are then paid to the Oklahoma Tax Commission. The City of Tulsa also administers its own lodging tax ordinance, TRO Title 44, for businesses within city limits.
Certain exemptions from lodging tax exist in Oklahoma. Persons conducting business for the state, municipalities, public schools, or other political subdivisions are exempt from lodging tax and sales tax. However, state employees on personal business, private school employees, and employees of other states are not exempt. Hotels must retain signed copies of government exemption forms for each exemption.
Short-term rental operators in Oklahoma must register with the Oklahoma Tax Commission and file returns for each assigned filing period, regardless of income or tax collection. Failure to comply with tax laws may result in late fees, interest payments, or legal action. Short-term rental hosts who are not collecting lodging taxes may be in violation of Oklahoma tax laws and should consider consulting a tax professional.
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Exemptions for government employees
In Oklahoma, persons conducting state government business or business for municipalities, public schools, or other political subdivisions of the state are exempt from lodging and sales tax. However, state government employees on personal business, employees of private schools, and employees of other states are not exempt from these taxes.
For state government employees to be exempt from lodging and sales tax, room charges must be paid for using the State of Oklahoma purchase card. This tax-exempt card will have the number 736017987, and the name of the directly billed state agency will be listed under the employee's name. Hotels are required to retain signed copies of the government exemption form for each state government exemption.
Additionally, persons conducting business for a public school, municipality, or political subdivision of the state must pay for their stay by direct billing the employer or using a credit card or check in the name of the school, municipality, or subdivision. Personal credit cards, personal checks, or cash cannot be used to pay for these exemption stays. Similar to state employees, hotels must retain signed copies of the government exemption form for each exemption.
Federal government employees on government business are also exempt from lodging and sales tax when room rent and taxes are paid directly by the federal government. To verify that a federal government employee provided an approved means of payment, the first four digits of their centrally billed Visa Card will be 4486, 4614, or 4716, and the first four digits of a MasterCard will be 5565 or 5568. The sixth digit on the card should be a 0, 6, 7, 8, or 9.
In terms of the broader hotel tax laws in Oklahoma, there is a state sales tax of 4.5% on lodging and meals, and a city sales tax ranging from 8.375% to 8.875%. Lodging tax returns and payments are due monthly, and the lodging tax is due on the last calendar day of the month following the date of collection. Municipalities and counties may also charge their own lodging taxes.
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Short-term rental tax
In Oklahoma, short-term rental operators are required to register with the Oklahoma Tax Commission and file returns for each assigned filing period, regardless of whether they have earned rental income or collected lodging taxes. These returns are known as "zero-dollar returns". Short-term rental hosts are responsible for collecting lodging taxes from their guests and paying them to the correct tax authority. This is separate from income tax, which is paid directly to the government.
Lodging tax jurisdictions and rates vary depending on location, and for any given transaction, more than one tax may need to be collected and paid to different tax authorities. For example, taxes may need to be remitted separately to the state and city for the same guest booking. In addition to state-level lodging taxes, local governments may levy and administer additional lodging taxes.
In Oklahoma, persons conducting business for the state government, municipalities, public schools, or other political subdivisions of the state are exempt from paying lodging and sales taxes, provided they follow certain payment guidelines. For example, state government employees can be exempted from lodging taxes if their room charges are paid for using the State of Oklahoma purchase card, which has a tax-exempt number. Hotels are expected to retain signed copies of government exemption forms for each exemption.
Short-term rental operators should be aware of the tax regulations that apply to their business and ensure compliance with tax laws. Failure to register with tax authorities and file short-term rental tax returns on time may result in late fees, interest payments, and legal action. To relieve the burden of filing, short-term rental hosts in Oklahoma can use filing solutions such as MyLodgeTax.
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Sales tax exemptions
In Oklahoma, sales tax exemptions apply to certain individuals and entities under specific circumstances. Here are some scenarios where sales tax exemptions are applicable:
- Government and Public Sector Employees: Persons conducting business on behalf of the State of Oklahoma, its municipalities, public schools, or other political subdivisions are exempt from sales tax. This includes state government employees on official business who pay using a state purchase card with a tax-exempt number. However, state employees on personal business are not exempt.
- Religious Entities: Sales tax is not applicable to rooms paid for directly by religious entities. However, this exemption does not extend to followers of the religious entity who are paying for their rooms.
- Educational Institutions: Rooms paid for by schools, including high schools, primary schools, and Oklahoma colleges, are exempt from sales tax. This exemption does not apply to out-of-state colleges.
- Non-Profits, Churches, and Charities: Organisations with an exemption certificate issued by the Oklahoma Tax Commission are exempt from sales tax when they pay using their organisation's credit card, check, or direct payment.
- Official Travel by City or County Agency Employees: State sales tax is waived for city or county agency employees who are on official business travel within Oklahoma.
- Food and Drinks as Part of a Packaged Room Rate: Hotels or motels that include food and drinks as part of a packaged room rate are exempt from paying sales tax on those items, provided that no separate charge is made for them.
- Permanent Residents: Hotels in Oklahoma can submit a lodging tax exemption form for permanent occupancies, claiming exemptions on their monthly lodging tax returns.
- Long-Term Stays: In some municipalities or counties, guests who stay for over 30 days with advance notice may be exempt from hotel tax if the hotel primarily operates as an apartment-like provider.
It is important to note that specific requirements and conditions must be met for each exemption, such as approved payment methods and the retention of signed government exemption forms. Additionally, while sales tax exemptions exist, separate lodging taxes may still apply in certain jurisdictions, like the City of Tulsa.
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Innkeeper's lien law
Oklahoma has an innkeeper's lien law that allows hoteliers to hold on to a guest's luggage to force payment of any unpaid charges. This law, outlined in 42 O.S. § 39, permits a hotelier to place a lien on luggage for charges due and to keep the luggage until the payment is made. If the guest fails to pay within 90 days, the hotelier can sell the luggage at a public auction, provided proper notice is given. Any proceeds from the sale that exceed the amount owed to the hotelier must be returned to the guest within six months.
The innkeeper's lien law is just one aspect of hotel tax laws in Oklahoma. Hotel tax laws in Oklahoma include various taxes such as state sales tax, city sales tax, and lodging tax. The state sales tax in Oklahoma stands at 4.5% for lodging and meals, while the city sales tax can be as high as 8.375%. These taxes are administered and collected by the Oklahoma Tax Commission based on state statutes.
In addition to the standard taxes, hotels in Oklahoma may also encounter specific situations that impact their tax obligations. For example, hotels holding a sales tax permit can purchase food and drinks exempt from sales tax if they are part of a packaged room rate. Colleges paying for rooms may also be exempt from sales tax liability if they are a part of the Oklahoma system of higher education or accredited by the Oklahoma Board of Regents for Higher Education.
Furthermore, certain individuals and entities are exempt from lodging and sales taxes in Oklahoma. This includes persons conducting business for the State of Oklahoma, Oklahoma municipalities, Oklahoma public schools, or other political subdivisions of the state. However, employees of these entities on personal business are not exempt and must pay the applicable taxes. Hotels are required to retain signed copies of government exemption forms for each exemption claim.
Understanding and complying with hotel tax laws in Oklahoma are crucial for hotel operators. Failure to register with tax authorities and file short-term rental tax returns on time can result in late fees, interest payments, and even legal consequences. It is recommended to consult with tax professionals to ensure proper compliance with the applicable tax laws and regulations.
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Frequently asked questions
In Oklahoma, a state sales tax of 4.5% applies to lodging and meals, and a city sales tax of 8.375% also applies. Hotels or motels holding a sales tax permit may purchase food and drinks exempt from sales tax if they are provided as part of a packaged room rate.
Persons conducting business for the State of Oklahoma, its municipalities, public schools, or other political subdivisions are exempt from lodging and sales tax. However, state employees on personal business are not exempt.
Lodging tax returns and payments are due monthly and are due on the last calendar day of the month following the date of collection.
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