Iowa Admin. Code r. 701-253.6
EXAMPLE 1A: Lodging provider. H owns a hotel located in Iowa. H offers rooms for rent to transient guests. Users can book rooms directly with H-in person, by phone, or through H's website-or through lodging facilitators. H is a lodging provider. See Iowa Code section 423A.2(1).
EXAMPLE 1B: Lodging provider-property management company. M offers property management and listing services on behalf of lake homeowners. O owns a lake home. O enters into an agreement with M, under which M will manage the property, list the property for rent, enter into rental agreements with users, and receive money from users for the rental of the property.
The lake home is lodging. See Iowa Code section 423A.2(1)"e." M is a lodging provider as a consequence of operating and managing the lodging and making the lodging available for rent. See Iowa Code section 423A.2(1)"h." M must collect and remit the hotel and motel tax to the department.
EXAMPLE 1C: Collection and remittance by a lodging provider. H operates a hotel and is a lodging provider. A user books a room by calling H's telephone number and paying a sales price of $100 to rent the room for one night. H's hotel is located in a jurisdiction with a 7 percent locally imposed hotel and motel tax. H shall charge the user $112. H shall add the $5 state-imposed tax as separate and apart from the sales price and separate and apart from the locally imposed tax. H shall add the $7 locally imposed tax as separate and apart from the sales price and separate and apart from the state-imposed tax. H shall remit $12, the total hotel and motel tax, to the department. See Iowa Code section 423A.5A.
EXAMPLE 2A: Lodging facilitator-online travel company. F operates an online travel company. On its website, F allows users to search for, book, and pay for hotel rooms. F's website includes listings from various hotels. Users are allowed to pay for the hotel room through a checkout page on F's website. F retains a portion of each sale as compensation for arranging the rental.
A user finds and selects a hotel room in Iowa on F's website. The user pays for the room through F's website. The lodging provider that owns the hotel is not an affiliate of F. The total price charged to the user includes an amount retained by F for arranging the rental of the hotel room. In this transaction, F is a lodging facilitator. See Iowa Code section 423A.2(1)"c,""d," and "f." The amount F retains from the user as compensation for arranging the rental is a facilitation fee. See Iowa Code section 423A.2(1)"d."
EXAMPLE 2B: Lodging facilitator-travel agency. T operates a travel agency. T allows customers to book hotel rooms in Iowa by coming to T's office or by calling one of T's agents. A user books a hotel room in Iowa through T. The user pays T a sales price of $120. Of this amount, $100 is consideration for renting the room. The remaining $20 is a fee paid to T for coordinating the rental. In this transaction, T is a lodging facilitator. The $20 fee T charges the user is a facilitation fee, which is included in the sales price. See Iowa Code section 423.2(1)"k."
EXAMPLE 2C: Lodging rented through a lodging facilitator. H operates a hotel and is a lodging provider. F operates an online travel company and is therefore a lodging facilitator. A user books a room at H's hotel through F's website. The total sales price charged to the user is $100. The $100 sales price includes a $20 facilitation fee that is retained by F. H charges F a discount room charge of $80.
The lodging is located in a jurisdiction with a locally imposed hotel and motel tax of 7 percent. The total price F must charge to the user is $112, which is the sum of the sales price, the 5 percent state-imposed hotel and motel tax, and the 7 percent locally imposed hotel and motel tax.
F shall add the $5 state-imposed tax as separate and apart from the sales price and separate and apart from the locally imposed tax. F shall add the $7 locally imposed tax as separate and apart from the sales price and separate and apart from the state-imposed tax. On any document F provides to the user confirming the transaction, F must separately state the sales price ($100), the state-imposed tax ($5), and the locally imposed tax ($7). See paragraph 253.6(1)"b." F is not required to identify to the user the portion of the sales price attributable to either the discount room charge or the facilitation fee. See paragraph 253.6(1)"c."
F shall remit to H that portion of hotel and motel taxes collected on $80, the sales price that represents the discount room charge. See Iowa Code section 423A.5A. F remits $9.60 hotel and motel tax (i.e., 12 percent hotel and motel tax rate × $80 discount room charge) to H. F remits $2.40 hotel and motel tax (i.e., 12 percent hotel and motel tax rate × $20 facilitation fee) to the department. H remits the $9.60 hotel and motel tax to the department.
EXAMPLE 2D: Additional sales price paid to a lodging provider. Assume the same facts as in example 2C. However, at check-in time, the user upgrades with H to a larger room for an additional sales price of $50. The user pays this additional $50 directly to H. H must charge the user $56, which is the sum of the additional sales price, the 5 percent state-imposed hotel and motel tax, and the 7 percent locally imposed hotel and motel tax. H remits the $6 hotel and motel tax, as well as the $9.60 hotel and motel tax received from F as described in example 2C, to the department.
EXAMPLE 2E: Lodging rented through a travel agent who retains a fee. Assume the same facts as in example 2C. However, instead of booking the hotel room through F's online travel company, the user books the hotel room through travel agency T, and T handles the transaction the same as the online travel company in example 2C.
The result is the same as example 2C. T has the same collection and remittance obligations as F in example 2C.
EXAMPLE 2F: Lodging rented through a travel agent who only receives a commission from the hotel. H owns a hotel and is a lodging provider. A user books a room for one night at H's hotel using T, a travel agency. The total sales price is $100. T coordinates the user's payment by collecting and transmitting the $100 sales price plus tax from the user to H. T is a lodging facilitator. T does not retain any part of the user's $100 payment nor impose an additional fee to the user for facilitating the transaction with H. After the user has stayed at H's hotel, T receives a $20 commission from H. T and H are not affiliates.
The lodging is located in a jurisdiction with a locally imposed hotel and motel tax of 7 percent. The commission H pays to T is not a facilitation fee. See Iowa Code section 423A.2(1)"d" and paragraph 253.6(1)"a." Therefore, there is no hotel and motel tax applied to the commission paid to T. T is required to collect $12 of hotel and motel tax (12 percent combined hotel and motel tax rate × $100 sales price) and remit the $12 to H when T facilitates payment of the sales price to H. H must receive the $12 tax on the sales price from T and must then remit the entire $12 tax to the department. T does not have an obligation to remit any hotel and motel tax to the department on this transaction.
EXAMPLE 3A: Lodging platform-home-sharing marketplace. Z operates a home-sharing platform. Z allows individual property owners to list rooms or entire properties with sleeping accommodations for rent to transient guests on the home-sharing platform. Users search, book, and pay for lodging through Z's platform.
O lists O's house on Z's home-sharing platform. O is not an affiliate of Z. A user books and pays for O's listing using Z's home-sharing platform. In this transaction, Z is a lodging platform. See Iowa Code section 423A.2(1)"g."
EXAMPLE 3B: Lodging platform-home-sharing marketplace collection and remittance. Z operates the homesharing platform described in example 3A. O owns a cabin in Iowa. The cabin is located in a local jurisdiction that imposes a 7 percent locally imposed hotel and motel tax. O lists O's property for short-term rentals on Z's marketplace. O offers O's property for rent for a three-day weekend for $900. When listing O's property, O also requires the guests pay a $20 towel fee and a $50 cleaning fee. On this transaction, Z imposes a $30 service charge on the user for processing the transaction on Z's website. A user reserves and pays for the cabin on Z's website.
The total sales price is $1,000 (i.e., $900 lake home rental + $20 towel fee + $50 cleaning fee + $30 service charge) before taxes. Z must charge the user $1,120. Z shall add the $50 state-imposed tax as separate and apart from the sales price and separate and apart from the locally imposed tax. Z shall add the $70 locally imposed tax as separate and apart from the sales price and separate and apart from the state-imposed tax. As a lodging platform, Z does not remit any part of the $120 in tax to O. Z shall remit the $120 in tax to the department. See Iowa Code section 423A.5A.
This rule is intended to implement Iowa Code sections 422.70, 423.37, 423.39, 423A.3, 423A.4, and 423A.5A.
Iowa Admin. Code r. 701-253.6
ARC 4195C, IAB 12/19/18, effective 1/23/19; ARC 6508C, IAB 9/7/22, effective 10/12/22; Editorial change: IAC Supplement 10/18/23