Are hotel rooms rented for more than 28 consecutive days by a single business exempt from Kansas sales tax?

Plain-English summary

A requester asked the Department to rule that hotel rooms rented for more than 28 consecutive days by a single business are exempt from sales tax. The Department answered that this is not the law — such long-term rentals are not exempt from Kansas sales tax.

The Department explained the history. There once was an exemption for long-term hotel rentals, but the Legislature repealed it in 1992. Showing the strike-throughs from the 1992 session laws, the letter quoted the old provision that had exempted "the gross receipts from the service of renting room[s] by hotels ... except such tax shall not apply where a room is rented by an individual, firm, association or corporation for a period of more than 28 consecutive days" (repealed by 1992 Kan. Session Laws Ch. 280, Sec. 59). "This means that companies have not been exempt from paying sales tax on their long term hotel room rentals since 1992. Accordingly, hotels and motels should charge state and local sales tax on hotel sleeping room rentals regardless of the length of the stay."

The Department then drew an important distinction with a different tax. The 28-day rule "is still in place for transient guest tax." Under K.S.A. 12-1692 and K.S.A. 12-1696, a "'[t]ransient guest' means any person who occupies a room in a hotel, motel or tourist court for not more than 28 consecutive days." So a stay longer than 28 days is exempt from the transient guest tax — but, as the letter stressed, it is still subject to Kansas state and local sales tax.

What this means for you

Hotels and motels

Charge state and local sales tax on sleeping-room rentals for every guest, no matter how long the stay. The old exemption for rentals over 28 consecutive days was repealed in 1992 and no longer exists.

Businesses booking long-term lodging

Do not expect a sales tax exemption for a long-term stay. Renting a room for weeks or months does not make the room charge exempt from sales tax.

The transient guest tax is different

The 28-day cutoff still matters for the transient guest tax (the local lodging tax): stays longer than 28 consecutive days fall outside the definition of a "transient guest," so the transient guest tax does not apply — even though sales tax still does.

Common questions

Q: Is a hotel room rented for more than 28 days exempt from Kansas sales tax?
A: No. Since the exemption was repealed in 1992, sales tax applies to sleeping-room rentals regardless of the length of the stay.

Q: Does anything change at 28 days?
A: Yes, but only for the transient guest tax. A stay over 28 consecutive days is not a "transient guest" stay, so the transient guest tax does not apply — sales tax still does.

Q: When did the long-term rental exemption end?
A: In 1992, when the Legislature repealed it (1992 Kan. Session Laws Ch. 280, Sec. 59).

Citations and references

• 1992 Kan. Session Laws Ch. 280, Sec. 59 — the 1992 act that repealed the former sales tax exemption for hotel rooms rented more than 28 consecutive days.
• K.S.A. 12-1692; K.S.A. 12-1696 — transient guest tax provisions defining a "transient guest" as a person occupying a room for not more than 28 consecutive days, so longer stays are exempt from the transient guest tax.
• K.S.A. 36-501 — the statute defining "hotels," referenced in the repealed sales tax provision.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: O-1999-021

Original ruling text

Opinion Letter

Body:

Office of Policy & Research

December 21, 1999

XXXX
XXXX
XXXX

RE: Your letter of December 8, 1999

Dear XXXX:

Thank you for your letter that we received earlier this month. In it, you ask for a ruling that hotel rooms rented for more than 28 consecutive days by a single business are exempt from sales tax. Please be advised that this is not the law. Such hotel room rentals are not exempt from Kansas sales tax. While there had been an exemption for such long term rentals, the exemption was repealed in 1992. The strike-throughs in the 1992 session laws show the repeal:

(g) the gross receipts from the service of renting room by hotels, as defined by K.S.A. 36-501 and amendments thereto, except such tax shall not apply where a room is rented by an individual, firm, association or corporation for a period of more than 28 consecutive days; 1992 Kan. Session Laws. Ch. 280, Sec. 59.

This means that companies have not been exempt from paying sales tax on their long term hotel room rentals since 1992. Accordingly, hotels and motels should charge state and local sales tax on hotel sleeping room rentals regardless of the length of the stay.

Please note that the 28 day rule in still in place for transient guest tax. See K.S.A. 1998 Supp. 12-1692, and K.S.A. 1998 Supp. 12-1696. These statutes provide: “‘Transient guest’ means any person who occupies a room in a hotel, motel or tourist court for not more than 28 consecutive days.” These statutes make long term rentals exempt from transient guest tax but subject to Kansas state and local sales tax.

I hope this letter answers your questions and adequately explains the law. If not, please call me to discuss this matter further.

Sincerely,

Thomas E. Hatten

Attorney/Policy & Research

Date Composed: 04/11/2000 Date Modified: 10/10/2001

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