Is Cobb County's $3 Recreational and Sports Tourism Service Fee included in a hotel's Georgia sales-tax base?

Plain-English summary

Cobb County's $3-per-room-night Recreational and Sports Tourism Service Fee was not part of the hotel's Georgia sales-tax base when separately stated on the guest's bill. The county ordinance required hotel operators to collect the fee from guests, so the Department treated it as imposed directly on the consumer rather than as an expense of the seller.

The Department declined to decide whether federal or state governmental entities were exempt from the county fee. It said that question belonged to the Cobb County Board of Commissioners.

Common questions

Q: What condition kept the county fee outside the sales-tax base?

A: The hotel had to state the consumer-imposed fee separately on the invoice or similar document given to the guest.

Q: Did the ruling grant government entities an exemption from the county fee?

A: No. The Department said Cobb County, not the state Department of Revenue, had to determine county-fee exemptions.

Citations and references

• O.C.G.A. § 48-8-2(31)(B) -- transient accommodations as retail sales
• O.C.G.A. § 48-8-2(34)(A)(ii), (B)(iii) -- taxes and sales price
• Cobb County Code §§ 114-94, 114-96 -- Recreational and Sports Tourism Service Fee

Source

• Landing page: Georgia Sales & Use Tax Letter Rulings
• Original PDF: LR SUT-2016-02

Original ruling text

Georgia Letter Ruling: LR SUT-2016-02
Dated: January 5, 2016
Topic: Sales Price-Inclusion of Cobb County Recreational & Sports Tourism Service Fee
This letter is in response to your request for guidance on the application of Georgia sales and use tax to Cobb County’s
Recreational and Sports Tourism Service Fee.
Facts Presented by Taxpayer
Effective January 1, 2015 Cobb County began imposing a Recreational and Sports Tourism Service Fee of $3.00 per
room night on all hotels located in the Cumberland Special Services District No. 1 as created by the Cobb County
board of commissioners. Cobb County indicated this service fee is imposed on the guest and provided [Redacted]
(“Taxpayer”) the following example of how this fee should be presented on the folio Taxpayer provides its customers:
If a guest rents an overnight room and the rate is $100.00 per night, the fees will be calculated as follows.
Room Revenue
Sales Tax @ 6%
County Occupancy Tax @ 8%
Sports and Tourism Fee
Total Due

$100.00
6.00
8.00
3.00
$117.00

Issues
1.

Is the Recreational and Sports Tourism Fee subject to sales and use tax?

2.

Will sales and use tax exemptions for federal and state governmental entities apply to this fee?

Analysis
Georgia levies and imposes a tax (subject to certain specific exemptions) on the retail purchase, retail sale, rental,
storage, use, or consumption of tangible personal property and on certain enumerated services.1 “Retail sale” includes
“[t]he sale or charges for any room, lodging, or accommodation furnished to transients by any hotel, inn, tourist camp,
tourist cabin, or any other place in which rooms, lodgings, or accommodations are regularly furnished to transients
for a consideration.”2
The measure subject to tax is the “sales price,” which means
the total amount of consideration, including cash, credit, property, and services, for which personal
property or services are sold, leased, or rented, valued in money, whether received in money or
otherwise without any deduction for . . . taxes imposed on the seller, and any other expense of the
seller . . .3 (Emphasis added).
Sales price does not include any taxes legally imposed directly on the consumer that are separately stated on the
invoice, bill of sale, or similar document given to the purchaser. 4
The following sections from the Official Code of Cobb County, Georgia are relevant for purposes of determining the
appropriate tax treatment of the Recreational and Sports Tourism Fee (the “Fee”).

1

O.C.G.A. §§ 48-8-1, -30.
O.C.G.A. § 48-8-2(31)(B).
3
O.C.G.A. §§ 48-8-30(b)(1), -2(34)(A)(ii).
4
O.C.G.A. § 48-8-2(34)(B)(iii).
2

Georgia Letter Ruling: LR SUT-2016-02
Dated: January 5, 2016
Topic: Sales Price
Page 2 of 2

Sec. 114-94. - Recreational and sports tourism services fee.
A recreational and sports tourism services fee ("services fee" or "fee") is levied on the per night rate
of all hotel rooms in the district to pay, wholly or partially, the cost of providing, supplementing or
enhancing local government services within the district and to construct and maintain facilities
therefor, which thereby will enhance recreation, sports, tourism and commercial opportunities for
visitors to and guests of the district. The amount of this fee shall be fair and reasonable, bearing a
substantial relationship to the services offered to all individuals or entities paying such fee. . .
Sec. 114-96. - Recreational and sports tourism services fee rate; collection.
The amount of the services fee shall be set by the board and from time to time may be modified by
resolution as deemed necessary or prudent so as to fund the continued delivery of the local
government services and facilities specified herein. The amount of the fee initially set by the board
shall be $3.00 per room per day charge for an overnight accommodation at a hotel in the district.
This fee shall be collected by the owner or operator of each hotel in addition to any other rates,
fees, taxes, assessments or levies charged per night to each hotel room. (Emphasis added).”
The italicized language above indicates that hotel owners and operators are obligated to collect the Fee from their
customers. Consequently, for sales and use tax purposes, the Department of Revenue considers the Fee to be imposed
directly on consumers. Because “sales price” (i.e., the amount subject to sales and use tax) does not include taxes
legally imposed directly on the consumer that are separately stated on the invoice or similar document given to the
purchaser, the Fee is not subject to sales tax as long as it is separately stated on the invoice or similar document
provided to the hotel guest.
Rulings
1.

Because the fee is imposed on the hotel guest, the fee is not subject to sales and use tax as long as the fee is
separately stated on the invoice or similar document provided to the guest.

2.

The Department of Revenue is unable to opine on Fee exemptions that may be available to government entities.
A determination regarding Fee exemptions would be a matter for the Cobb County Board of Commissioners.

The opinions expressed in this ruling are based upon the information contained in your request and limited to the
specific transactions, facts, circumstances, and taxpayer in question. Should the circumstances regarding the
transactions change or differ materially from those represented, this ruling may become invalid. Subsequent statutory
or administrative rule changes or judicial interpretations of the statutes or rules upon which this ruling is based may
subject similar future transactions to different tax treatment than that expressed in this ruling.