Roll rate use tax. ( For the ...er...trees, forest, bunny fund )
Posted on 03/07/2010 6:48:13 PM PST by The Magical Mischief Tour
The state wants to tax the lodging businesses for the food that they offer as free breakfasts as part of their room rate. The budget-strapped state hopes to get an estimated $10 million for its coffers from the sweet rolls, coffee and such that hotel patrons enjoy at no charge from the Smoky Mountains to Graceland.
The proposal, pending in committees in the General Assembly, is to collect tax on the food at the prevailing sales tax rate in the county involved - up to 9.75 percent. State officials stress that the businesses would be taxed and not the hungry patrons. Reagan Farr, commissioner of the Department of Revenue, doesn't believe hotels would pass the tax onto consumers. "It would be nominal value that each consumer eats," he said. "I doubt that they would raise their rates. "You are literally talking about sales tax on a bagel and a bowl of Cheerios (as an example)."
He said the proposal would bring Tennessee in line with the way other states collect revenue. "Tennessee is an anomaly among the 50 states," Farr said. He said service providers have to purchase their items, "and when they do, they are deemed to be a user and they pay tax on them. This is true regardless of whether the service is ultimately subject to sales tax.
The proposal is in a much broader tax provisions bill sponsored by state Sen. Jim Kyle of Memphis and state Rep. Mike Turner of Nashville. According to the latest revenue figures, the state has collected $185.1 million less than the budgeted estimate for this fiscal year. The proposed extra tax would not be available until the next fiscal year.
The Tennessee Hospitality Association, representing hotels, believes the plan is unfair. "It's an improper way to collect tax dollars, and bullying as much as anything else," said Walt Baker, chief executive officer of the association. "Why don't they just double tax everybody? It's an unfortunate tactic to tax hotels even further."
He estimates up to 70 percent of Tennessee hotels offer free breakfast for paying guests. "It's the policy of national franchises," Baker said.
What kind of crack are they smoking to think this?
Let me guess.. To pay for TennCare??
California now taxes Shipping & Handling.
What next?
“Free” soap?
“Free” shampoo?
“Free” toilet paper?
“Free” HBO?
“Free” clean towels?
They already charge for the breakfast, it’s just packaged in with the room rate. Next thing that they’ll want to tax the guest for is if the hotel offers free parking as well, since if they charged for it, the government would collect a sales tax on it and an income tax on the hotel for charging for it.
Welcome to the Union of Socialist States of America.
Who could have believed it could come to this, with America now taxing free goods?
Idiots. Do I even have to say it? The costs of the breakfast are ALREADY BUILT IN to the room rate! There’s no such thing as free Breakfast!
If they tax the “free” meals.... wouldn’t they have to separate it from the room rate?
Wouldn’t the tax from the room rate be lower??
Won’t the state collect LESS money if hoteliers did that?
Plenty of f'n retards in gov't it appears.
Yeah, my thought too.
That’s double taxation! The hotels already figure these “free” meals into the room rate, which is taxed. Does the state think they are getting the food from the same place that Obama gets his unicorns and rainbows?
A lot of people have no concept of factoring in prices. That includes the typical politician.
The next time I go to Tennessee I believe I’ll get a hotel in another state. In ‘06, the tax was 17.25%. Ridiculous. I’m sure it has gone down since then. /s
The tax locusts are coming for your breakfast. I’m shocked./s
Which is so deep in trouble it’s now only NineCare.
And then the hotels just stop offering them.
Great move.
As a complete thread hijacking, I just spent the work week at the Omni Downtown in Austin. No free breakfast, but as a member of their points program they delivered a pot of Starbucks coffee every morning. It was delivered to the door, with the WSJ, at the specific time requested.
I'm a fairly active road warrior and that is way better service than I'm used too.
I am absolutely convince the dumbest most clueless people become our representatives. These people could NEVER hold down a real job in a private company. Just think about Nancy Pelosi and Barney Franks. If that does not prove it you are as dumb as they are!
Pretty soon the old joke about a tax on taxes is not going to be funny anymore.
Ummm...that pretty much means that the patrons will be paying the tax. One way or another.
Governments have to stop thinking of people as consumers and taxpayers. They are here to serve us, not visa versa.
Maybe more people will live in their cars on trips instead of hotels. I am glad I am off road warrior these days. Hotels used to be kind of fun a long time ago. I dread them now.
I suppose I'll try to avoid staying in Tennessee when I have an option. Politicians are really stupid.
The hotels in Tennessee should all stop offering breakfast completely, and reduce the room rates by the cost of the food service.
The result: Tennessee would get LESS TAX MONEY than they did before this boneheaded move.
“He estimates up to 70 percent of Tennessee hotels offer free breakfast for paying guests.”
These idots in TN are crazy. The ‘free breakfast’ is not free, it is included in the room rate. There is tax on the cost of the room. The tax is already paid.
Roll rate use tax. ( For the ...er...trees, forest, bunny fund )
>>The next time I go to Tennessee I believe I’ll get a hotel in another state. In ‘06, the tax was 17.25%.
That’s the sales tax in TN?? I’m originally from Vancouver, BC snd 14.5% GST/PST was ridiculous.
Next to come:
Toilet flushing tax.
“Free” Pillow?
“Free” Sheets ?
“Free” Parking?
“Free” Phone?
“Free” Lamp?
“Free” Maid? ;-) “Free” etc. Complete madness!
I ran a hotel in Atlanta a few years ago and we did a complimentary reception with food, beer and wine each evening. The state alcohol police said we needed to charge for it, so we did...5 cents per guest. What a joke.
So can I claim a tax refund if I don’t partake of the “free” coffee and donuts?
“State officials stress that the businesses would be taxed and not the hungry patrons. Reagan Farr, commissioner of the Department of Revenue, doesn’t believe hotels would pass the tax onto consumers.
What kind of crack are they smoking to think this?”
“I am glad I am off road warrior these days.”
Me too! Spent 3-5 nights a week in motels for several years. And 40,000 miles a year behind the wheel of my car (company vehicle). I’ve also had many of those ‘free’ breakfasts.
When I came back to Ohio in 2000 I lived in a Residence Inn for 5 months. After the first 30 days there was no tax on the room - seems it was treated just as an apartment rental after 30 days - no tax. I believe that would be true in TN too.
The cost of the FREE breakfast is, of course, not FREE as it is considered part of the overhead, to be covered by total income.
However, it appears that the state (Mass next, right?) will be taxing that breakfast NOT EATEN by the hotel guest who just leaves in the morning unfed. The guest, still hungry, will be forced to pay the tax on a meal he did NOT eat and will NOT get a refund for the uneaten meal.
Is there a state whose government has heads NOT filled with oatmeal? I’d like to know
It’s probably to pay for all the re-decorating and additions they have made to the governor’s mansion. Did it really need an underground meeting hall?
depends on whether oatmeal is taxed or not
I don’t know about the sales tax but that’s the tax we paid on our room at the Motel 6 in Chattanooga. That’s pretty tough to take for a New Hampshire boy where we have no general sales tax at all and our rooms and meals tax is about half of that 17.25%.
You Canadians even charged your GST on frikkin POSTAGE, for crying out loud. I couldn’t believe it.
it's NOT FREE... it's INCLUDED in the price!!!
9.75% of free is ZERO. Must be the new math.
One hotel I stayed at had that. I think it was in Omaha. Nice place. I liked Omaha.
...or they conveniently ignore that for the sake of conjuring up a new revenue stream.
Major league crack...
The government is getting anal and evil.
Don’t forget those free elevator rides.
Double taxation? Don’t the room costs pay for the “free” breakfasts, and aren’t the rooms taxed? This amounts to double taxation.
You think you have it bad? How about liquor, car insurance, medical insurance ALL controlled and regulated by the provincial govt? I’m trying to escape socialism yet look who we have for president..
There you go again, double taxation on an obviously already paid for amenity of staying at a hotel, and paying lots more than sales tax on the bill.
“You are literally talking about sales tax on a bagel and a bowl of Cheerios”
You are literally talking about sucking an extra $10 million out of the economy with no change in behavior by those effected and no costs passed on to anyone...
PA does tax on taxes - they apply a 6% sales tax on the retail price of liquor. The retail price of liquor bundles in a few other very significant taxes amounting to some 40% of the retail price.
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