Hotel and Short-Term Rental Unit Occupancy

Tax Bulletin ST-331 (TB-ST-331)

Issue Date: July 30, 2025

Introduction

This bulletin explains how and when to calculate sales tax on the charge for occupancy of a hotel room or short-term rental unit.

A hotel is all or a portion of a building that is regularly used and kept open for the lodging of guests, and includes, but is not limited to:

• a hotel
• a motel
• an inn
• a bed and breakfast establishment
• a ski lodge
• an apartment hotel

A short-term rental unit is all or a portion of a building used for the lodging of guests, and includes, but is not limited to:

• a house
• an apartment
• a condominium
• a cooperative unit
• a cabin, cottage, or bungalow
• a similar furnished living unit, or
• one or more rooms therein

Hotel and short-term rental unit operators and booking services must collect sales tax on the charge for occupancy, when the rental rate is more than $2.00 per day.

However, a short-term rental unit operator that does not use a booking service to facilitate its rentals is not required to collect sales tax on the charge for occupancy when the rental unit is its own property and rented for a total of 3 days or less in a calendar year.

A room remarketer (such as an Internet travel site) is considered a hotel operator. For information on room remarketers, see TSB-M-10(10)S, Amendments Affecting the Application of Sales Tax to Rent Received for Hotel Occupancy by Room Remarketers.

A booking service that facilitates sales of short-term rental unit occupancy in New York State for an operator must collect sales tax on the charge for occupancy of that unit. A booking service does not include a room remarketer for purposes of these sales. For more information, see Sales tax on short-term rental unit occupancy.

Hotel and short-term rental unit occupancy

Occupancy is the use or possession, or the right to the use or possession, of a room in a hotel or short-term rental unit.

The rent charged for occupancy is the amount that guests must pay to:

• stay in the hotel room or short-term rental unit; or
• have the right to use the hotel room or short-term rental unit, whether the guest stays or not.

This amount is taxable at the combined state and local sales tax rate. See Tax Bulletin Sales Tax Rates, Additional Taxes, and Fees (TB-ST-825). If a hotel or short-term rental unit operator or booking service keeps any amount of the rent charged for occupancy when a guest does not show up or does not cancel a reservation within the time set by the operator or booking service, that amount is taxable as a charge for occupancy.

New York City unit fee

In addition to the state and local sales taxes on occupancy, operators and booking services must also charge a unit fee of $1.50 per unit per day of occupancy in New York City. The New York City unit fee is not subject to state and local sales taxes.

The customer's invoice must separately show the taxes and, if applicable, the New York City unit fee.

Local occupancy taxes (bed taxes)

Certain localities, such as counties, cities, towns, or villages, charge an additional tax on occupancy commonly known as a bed tax. These local bed taxes are not subject to state and local sales taxes. The customer's bill must show an applicable bed tax as a separate charge.

New York State does not administer local bed taxes. For information on a local bed tax, contact the locality where the hotel or short-term rental unit is located.

Other charges

Some hotels, short-term rental unit operators, and booking services may charge separate:

• parking or transportation services fees
• rental fees for recreation equipment, such as beach chairs and golf carts
• service fees
• host fees
• cleaning fees
• pet fees
• fees for extra people

These charges may be taxable as part of the charge for occupancy, or may be subject to tax as standalone services. See Products, services, and transactions subject to sales tax.

Permanent residents

No sales tax is due from guests who are considered permanent residents. To be a permanent resident, a guest must stay in the hotel or short-term rental unit for at least 90 consecutive days without interruption. In New York City, the local sales tax applies until a guest has stayed for at least 180 consecutive days.

Until permanent residency is established, hotels, short-term rental unit operators, and booking services must charge state and local sales tax and the New York City unit fee, if applicable, as shown below.

Outside New York City

Within New York City

Once permanent residency is established, the hotel, short-term rental unit operator, or booking service may credit the guest's account or refund the tax and unit fee already paid. If they do not credit or refund the tax and unit fee if applicable, the guest can apply directly to New York State for a refund. See Tax Bulletin How to Apply for a Refund of Sales and Use Tax (TB-ST-350).

A business can also qualify as a permanent resident when renting a hotel room or short-term rental unit if:

• the rental is for its employees' or clients' use;
• it is paying the charge for occupancy and any employee, customer, client, or other person who physically occupies the hotel room or short-term rental unit will not reimburse the business; and
• it rents the hotel room or short-term rental unit for at least 90 consecutive days (or at least 180 consecutive days in New York City for the local sales tax).

The customer does not have to be in the same room within the hotel or short-term rental unit to meet the 90- or 180-day requirement, as applicable.

Complimentary occupancy

When a guest is allowed to stay for no charge and does not provide other consideration, no sales tax is due.

Example: A guest reserves a suite for a family of five at a hotel. Due to a reservation error, the suite is not available when the family checks in. The family is given a standard room with two double beds and a cot for the night. The hotel chooses to provide the room at no charge because of the inconvenience. This complimentary room is not taxable because it is not provided in exchange for other consideration.

If the stay is complimentary but the guest provides other consideration, the normal charge for the occupancy is taxable.

Example: An organization reserves a block of rooms at a group rate for a function. As part of the arrangement, the hotel agrees to give the organizer a complimentary room. This complimentary room is provided in exchange for other consideration, and sales tax is due on the normal rental charge.

Employee lodging is handled the same way as other complimentary lodging. If the employee does not provide any cash or other consideration, and the value of the lodging is not income for purposes of the employee’s federal or state income taxes, no tax is due on the value of the lodging.

Exempt purchasers

A charge for occupancy is not taxable if the purchaser:

• is exempt from sales tax, and
• gives the operator or booking service a properly completed exemption certificate (Form ST-121, Exempt Use Certificate).

A purchaser that is exempt from the sales tax on occupancy is also exempt from the New York City unit fee.

Exempt organizations

Certain exempt organizations, such as religious groups, youth sports groups, and charitable organizations, can purchase occupancy without paying sales tax. To qualify for the exemption, the group must:

• have been issued Form ST-119, Exempt Organization Certificate, by the Tax Department and give the operator or booking service a properly completed Form ST-119.1, Exempt Organization Exempt Purchase Certificate;
• be identified on the bill or invoice for occupancy along with the individual occupant; and
• be the direct payer of record and pay directly from the funds of the organization, such as with a check from the organization, or the organization’s credit card, cash or other funds (if the employee or representative pays the bill with a personal check, personal credit card, or other personal funds, the exemption does not apply).

Government employees

Employees of the federal government (including military personnel) and New York State and its political subdivisions who occupy hotel rooms or short-term rental units while traveling on official business are not subject to sales tax. The government employee or representative must give the operator or booking service a properly completed Form ST-129, Exemption Certificate for Occupancy by Government Employees.

Veterans posts

Authorized representatives of veterans posts or organizations establish their exemption from sales tax by furnishing the operator or booking service with a properly completed Form ST-119.5, Exemption Certificate for Occupancy by Veterans Organizations.

Places of assembly

A place of assembly is a room or suite of rooms:

• to be used for purposes such as education, recreation, amusement, business, or religious meetings; and
• that contains no sleeping accommodations and is not intended to be used as sleeping or living quarters.

The rental of a place of assembly is not subject to sales tax. However, the rental of a place of assembly in conjunction with the sale of food or drink is generally subject to tax. See Tax Bulletin Caterers and Catering Services (TB-ST-110).

Note: A Tax Bulletin is an informational document designed to provide general guidance in simplified language on a topic of interest to taxpayers. It is accurate as of the date issued. However, taxpayers should be aware that subsequent changes in the Tax Law or its interpretation may affect the accuracy of a Tax Bulletin. The information provided in this document does not cover every situation and is not intended to replace the law or change its meaning.