Were a campground's rentals of tepees or tents as sleeping accommodations subject to Illinois Hotel Operators' Occupation Tax?

Plain-English summary

Illinois said a campground's rental of tepees as sleeping accommodations fell within Hotel Operators' Occupation Tax. The Department read the statutory reference to buildings used for paid sleeping accommodations to include temporary as well as permanent structures, and it said the same reasoning encompassed tents.

The tax was imposed on the hotel operator's rental receipts, not directly on the occupant. The operator could collect a reimbursement charge from the guest, but remained liable even if it did not collect that reimbursement. The GIL identified permanent residents and certain foreign diplomats as the rental-receipt exceptions relevant to its discussion.

What this means for you

Do not assume that a fabric, portable, unfurnished, or campground structure falls outside hotel tax merely because it is not a standard room. Under this historical GIL, use as paid sleeping accommodation mattered more than whether the structure was permanent.

Common questions

Q: Did the Department distinguish tepees from tents?
A: No. It said the tax did not distinguish permanent from temporary structures and believed both tents and tepees rented as sleeping accommodations were covered.

Q: Was the tax imposed on the guest?
A: No. The operator incurred Hotel Operators' Occupation Tax and could seek reimbursement from the occupant.

Citations and references

• 35 ILCS 145/2(1), (3), and (6)
• 86 Ill. Adm. Code 480.101

Subject

Hotel Operators' Tax

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2010.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2010/st-10-0004.pdf

Original ruling text

ST 10-0004-GIL 02/24/2010 HOTEL OPERATORS' TAX
Under the Hotel Operators' Occupation Tax, hotel is defined to mean any building in which the
public may for consideration obtain sleeping accommodations. See 86 Ill. Adm. Code
480.101. (This is a GIL.)

February 24, 2010

Dear Xxxxx:
This letter is in response to your letter dated September 24, 2009, in which you request
information. The Department issues two types of letter rulings. Private Letter Rulings (“PLRs”) are
issued by the Department in response to specific taxpayer inquiries concerning the application of a
tax statute or rule to a particular fact situation. A PLR is binding on the Department, but only as to the
taxpayer who is the subject of the request for ruling and only to the extent the facts recited in the PLR
are correct and complete. Persons seeking PLRs must comply with the procedures for PLRs found in
the Department’s regulations at 2 Ill. Adm. Code 1200.110. The purpose of a General Information
Letter (“GIL”) is to direct taxpayers to Department regulations or other sources of information
regarding the topic about which they have inquired. A GIL is not a statement of Department policy
and is not binding on the Department. See 2 Ill. Adm. Code 1200.120. You may access our website
at www.tax.illinois.gov to review regulations, letter rulings and other types of information relevant to
your inquiry.
The nature of your inquiry and the information you have provided require that we respond with
a GIL. In your letter you have stated and made inquiry as follows:
COUNTY Bureau would like your assistance in definitive answer for the following:
-

A campground has purchased in 2009, three tepees and rents them out.
18 foot across and sleeps 8 people. There are no beds furnished. They
must bring their own sleeping bag.

A tepee is defined in the Merriam-Webster online dictionary as ‘a conical tent usually
consisting of skins and used especially by American Indians of the Great Plains.’ A tent
is defined as a ‘collapsible shelter of fabric stretched and sustained by poles and used
for camping outdoors or as a temporary building.
Does a tepee apply to the Hotel Operator’s [sic] Occupation Tax? If so, would you also
please clarify why tents are not subject to the tax and a tepee would be?
We understand it may take time to receive an answer. Would you please send
notification that you did receive our request and a possible timeline of when to expect a
response and who/how we should follow-up if the timeline is not met?
We appreciate your assistance in this matter.

DEPARTMENT’S RESPONSE:
The Hotel Operators' Occupation Tax Act (“HOOT”) imposes a tax upon persons engaged in
the business of renting, leasing or letting rooms in a hotel, as defined in the Act. HOOT defines “hotel”
to include any building or buildings in which the public may, for consideration, obtain living quarters,
sleeping or housekeeping accommodations. See 35 ILCS 145/2(1). See also 86 Ill. Adm. Code
480.101, which explains the nature, rate and scope of HOOT.
HOOT defines “rent” as “the consideration received for occupancy, valued in money, whether
received in money or otherwise, including all receipts, cash, credits and property or services of any
kind or nature.” See 35 ILCS 145/2(6). The definition of “rent” must be read in conjunction with the
term “occupancy.” HOOT defines “occupancy” as “the use or possession, or the right to the use or
possession, of any room or rooms in a hotel for any purpose, or the right to the use or possession of
the furnishings or to the services and accommodations accompanying the use and possession of the
room or rooms.” See 35 ILCS 145/2(3).
There is no corresponding tax imposed upon hotel room occupants. Rather, a hotel operator
may reimburse himself for his HOOT liability by collecting a corresponding reimbursement charge
from a room occupant. Although a hotel operator may state the reimbursement charge as "hotel tax"
on his bill, it is nothing more than a reimbursement charge. In our opinion, the only rental receipts not
subject to the HOOT are receipts from the rental of rooms to permanent residents or to certain foreign
diplomats. Given the structure of the tax, the hotel operator will incur HOOT liability on the rental
receipts even when he is not reimbursed by the room occupant.
While we understand that tepees may not be considered the equivalent of standard hotel
rooms, the tax does not distinguish between the renting of permanent or temporary structures. We
believe that the statutory language that imposes the tax upon any buildings rented as sleeping
accommodations encompasses the rental of tents or tepees as sleeping accommodations.
I hope this information is helpful. If you require additional information, please visit our website
at www.tax.illinois.gov or contact the Department’s Taxpayer Information Division at (217) 782-3336.
Very truly yours,

Debra M. Boggess
Associate Counsel
DMB:msk