Local Hotel / Motel Tax

About

Description: Local hotel and motel tax is imposed on the gross receipts from the renting of sleeping rooms for 31 consecutive days or less. Contracts for periods of more than 31 consecutive days are exempt. To qualify, the renter must contract to rent for a single period of more than 31 days and cannot accumulate these days.

Tax Rate: May not exceed 7%. This is in addition to the state tax rate of 5%. The state rate for hotels and motels did not increase to 6% on July 1, 2008. Local option tax, if any, does not apply.

Distribution of Funds: The local government imposing the tax.

Due Date(s) of Returns: Local hotel and motel tax is reported with quarterly sales tax. They are due the last day of the month following the end of each calendar quarter. Rates and answers to common questions are available on our hotel and motel page.   

Code Citation: IC 423A

Who Applies: Anyone renting taxable sleeping rooms. Requested as part of the application for a sales tax permit.

When To Apply: Prior to making taxable rentals.

Initial Requirements: This excise tax is reported and remitted on a quarterly basis electronically through GovConnectIowa. No permit other than an Iowa sales and use tax permit is required to collect this tax.

Duration: Does not pertain.

Processing Time: 2-4 weeks. Submitting the application electronically on the Department website speeds the process.

Fee Structure: None.

Renewal Requirements: Does not pertain.

Exam: Does not pertain.

Additional Information: None.