Business

Guest Accommodation Room Tax made easy

Sunday, October 14, 2012    

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ONE of the revenue measures proposed for the 2012-2013 fiscal year was the introduction of a Guest Accommodation Room Tax (GART).

The new tax, which came into effect on September 1 this year, is levied on occupied guest accommodations. This means that all operators of guest accommodations falling in any of the following categories are liable to charge and to pay over GART, whether or not they are licensed under the Tourist Board Act:

• Hotels

• Bed & Breakfast

• Villas & Apartments

• Motels

• Guest Houses

• Resorts / Cottages

• Time-shares

How the tax works

GART is charged for each night or period of shorter duration (less than a night) for which a room is occupied.

GART rates vary based on the size property, as follows:

• 1 to 50 rooms US$1

• 51 to 100 rooms US$2

• 101 rooms and over US$4

Please note however that complimentary rooms attract the GART and this includes Day Pass complimentary rooms.

Definitions

“Guest accommodation” means a facility providing sleeping accommodation by itself or together with facilities for meals, and other amenities for the accommodation of transient guests. This includes tourists (within the meaning of the Tourist Board Act) and whether or not provided for reward; but shall not include:

• Any letting for residential purposes

• Any accommodation provided for persons under a contract of service with the operator

• A house use room.

An “operator” is defined as the person who owns the business concerned with the operation of any guest accommodation and includes the manager. It also refers to any other principal officer of that business or any person deemed by the Commissioner General as the person responsible for the operation of the guest accommodation. This applies whether or not that accommodation or operator is registered under the Tourist Board Act or General Consumption Tax Act.

A “guest” is defined as any person occupying a room on a temporary or transient basis.

Calculating the tax is simple using the following formulas:

Calculating the Tax (per night example)

Apple Hotel has 150 rooms. Occupancy level averages 50 per cent for September 2012. Rooms are rented once per night. The BOJ Weighted Average Buying Rate for the month of September is US$1 to J$90

Formula:

a) # of room nights = Number of occupied sleeping rooms per night x number of days in month rooms were occupied.

b) Tax due = Number of sleeping rooms occupied per night for the period x GART Rate x Conversation rate.

Calculation:

• 75 x 30 days = 2,250 room nights

• 2,250 x US$4 x J$90

Tax payable J$810,000

Calculating the Tax (per occasion example)

Ginger Hotel has 150 rooms. Occupancy level averages 50 per cent for September 2012. Rooms are rented based on lettings per night. Weighted average BOJ buying rate for the month of September is US$1 to J$90

Formula:

a) # of lettings per night = Number of occupied sleeping rooms x number of lettings x number of days in month.

b) Tax due = Number of lettings for the period x GART rate x conversation rate

Calculation:

• 87 x 172 = 14,940 occasions

• 14,940 x US$4 x J$90

Tax payable: J$5,378,400

Filing and paying

Operators of guest accommodations should file and pay over the tax at any of the 29 Tax Offices across the = island no later than the last day of the month following the month in which the tax was charged, using the prescribed form (RTO1). Late payments will attract a penalty of 15 per cent of the unpaid tax which is due and payable with effect from September 1, 2012. Failure to file also attracts a penalty of 15 per cent of the tax payable, or J$2,000, whichever is greater.

General

In an effort to ensure that operators are fully informed of the GART and how it works, Tax Administration Jamaica has started its road show designed to engage members of the guest accommodation industry. Sensitisation seminars, as well as visits to guest accommodation properties are being scheduled across the island.

Talking Tax is prepared by the Communications Unit of Tax Administration Jamaica to guide the public on their rights and obligations. To get additional information on this or any other tax matter, persons may contact 1-888- TAX-HELP (829-4357) or www.jamaicatax.gov.jm.

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