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Business Tax - Transient Occupancy Tax

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1. What is Transient Occupancy Tax (TOT) also known as Hotel/Motel or Lodging Tax?

Transient Occupancy Tax is a tax paid by transients and is collected by operators of hotels, motels, boarding houses, and other lodging places which can accommodate four or more persons at one time as well as travel campgrounds that offer guest rooms or other accommodations rented out for continuous occupancy for fewer than 30 consecutive days. Effective July 1, 2013, the tax is 7% of the total amount paid for room rental. If the room rental charge is not separately stated on the bill, the tax must be calculated on the room charge.

2. How do I register to file TOT with Loudoun County?

After obtaining your Loudoun County Business Professional and Occupational License (BPOL) our office will establish a TOT account and TOT forms will be mailed to you. Existing establishments will be issued quarterly forms automatically.

3. Where do transient occupancy tax dollars go?

Starting July 1, 2013, seven cents per dollar should be collected. Of that tax, two cents goes to the County's General Fund, three cents is to be spent promoting tourism, travel or business that generates tourism or travel and the additional two cents imposed will be used to fund transportation in Northern Virginia.

For more information regarding the county’s budget, please visit the Loudoun County Budget Office.

4. If I collect TOT, do I have to have a business license as well?

Operators of hotels or motels renting eight or more guestrooms are subject to the Business Professional and Occupational License tax.

5. Should the transient occupancy tax be imposed on meeting rooms?

TOT does not apply to meeting rooms. It is to be imposed only for the occupancy of any room or space that is suitable or intended for occupancy by transients for dwelling, lodging, or sleeping purposes.

6. How do I calculate TOT if the hotel charges include fees in addition to that of room rental?

If the charge made by any hotel to a transient includes an additional charge, then the portion of the total charge representing only room rental should be distinctly set out and billed to such transient as a separate item. If the room rental charge is not separately stated on the bill, then the tax must be calculated on the entire charge.

7. Who is exempt from TOT?

Transients who stay 30 consecutive nights or more are exempt from Loudoun County TOT. Transients who stay 90 consecutive nights or more are exempt from Virginia retail sales and use tax on the room charge, as well. For further guidance on Virginia State retail sales and use tax regulations, please visit the Virginia Department of Taxation.

No TOT is due on room rental paid to any hospital, medical clinic, convalescent home or home for the aged.

Room charges paid directly by the federal government or a federal agency, whether direct-billed or paid with a qualified exempt government-issued credit card, are not subject to TOT. Most qualified exempt government-issued credit cards will have the statement "Exempt" printed on the card. If room charges are paid for by a government employee, TOT is applied to the room charge even if the employee is later reimbursed for such charges by the federal government or a federal agency.

8. If a company rents a room for 30 consecutive days or more and different employees occupy it during that period, is the company exempt from TOT?

Yes. It is not necessary that the same transient occupy the room for 30 consecutive days or more. A company may rent the room and have different employees occupy it during the 30 consecutive day period.

9. What are the due dates for the reporting and remittance of transient occupancy taxes collected?

The taxes collected from transients are held in trust by operators of lodging establishments until remitted to the county. On a quarterly basis, hotel operators report room charges and tax amount calculated and remit TOT collected to the Commissioner of the Revenue. TOT report and payment deadlines are as follows:

Report and
Payment       TOT Collection
Deadline       Period

January 31      October - December
April 30          January - March
July 31           April - June
October 31     July - September

10. What is the penalty for late filing or remittance of the TOT?

There is a 10% late filing penalty if the return and remittance are not postmarked by the deadlines above. Interest at the rate of 10% per year computed on a monthly basis beginning on the first day following the date upon which the tax was due will be added to the tax and penalty. An additional penalty of up to $1000 may be imposed for repeated delinquencies.

11. What do I do if TOT was collected from a transient in error?

If a tax was collected in error, it should be returned to the transient who was improperly charged. If the hotel, motel, boarding house, travel campground, or other facility cannot return the improperly collected tax to the rightful payer, the law requires that it must be remitted to the county with other TOT collections and not retained by the operators of lodging establishments as additional income.

12. What records must I keep regarding TOT?

Businesses responsible for the collection and remittance of TOT should keep accurate records for the current and three prior calendar years. These records are subject to audit by the Office of the Commissioner of the Revenue.