New Information on the New York City Hotel Remarketer Tax

NTA wants to share with you the latest information that has been posted by the New York City Department of Revenue regarding the New York City Hotel Remarketer Tax. NTA continues to oppose these updates to the tax and continues to seek clarity and answers.

The new information offers guidance to tour and receptive operators in calculating the remarketer tax. Of particular interest to tour and receptive operators is language regarding the "unbundling of packages." The Department of Revenue states that:    

• "When a remarketer has put together or purchased a package for resale and the remarketer knows the price of the components, a "cost of components" method should be used to determine what part of the package represents taxable additional rent. The taxable additional rent would be based on the ratio of the wholesale cost of the hotel room to the wholesale cost of all the components of the package multiplied by the total mark-up for the package. However, many remarketers buy packages from other remarketers, who may have bought them from others, and so on. They frequently have no idea of the cost of some or all of the components. In that instance, a 15% markup on 70% of the average retail rate of a similar room may be used to compute additional rent."

Additional information of importance to tour operators, receptives and hoteliers:

• Effective date: The tax on net rent and additional rent will apply to hotel rooms in New York City booked on or after September 1, 2009, which is the effective date of the local law enacting these
• If a remarketer purchases rooms from a hotel and sells them to a second remarketer that then sells to the occupant, each remarketer is responsible for collecting hotel tax on its own markup, and the hotel is responsible for the hotel tax on the discounted rate it charges the (first) remarketer.

In addition, information has just been posted regarding the Certificate of Registration. According to the Aug. 14 memorandum from the New York City Department of Finance, a Registration Certificate is required for all NYC hotel remarketers and this certificate is to be obtained by this Thursday, Sept. 3.

If you have any questions, contact Matt Grayson at 800.682.8886, ext. 4250, +1.859.226.4250 or matt.grayson@NTAstaff.com.

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