Does a resort owe hotel occupancy tax on its separate self-contained housekeeping units, given that it already collects tax on its adjoining motel rooms?

Plain-English summary

Northward Ho! Resort operates 17 motel and motel-efficiency units (efficiency units add a two-burner stovetop, sink, refrigerator, and cookware) plus 8 separate housekeeping units, each with its own full kitchen, bathroom, and bedrooms. The motel and efficiency units get daily maid service and rent daily or weekly; the housekeeping units get no services at all from the resort and rent only weekly, in summer. Guests of either unit type can use the resort's coffee shop (open to the public), pool, and lake beach access. The resort already collects hotel occupancy tax on its motel units and asked whether that also obligates it to tax the housekeeping units.

The Department separated the two unit types entirely. New York's hotel occupancy tax carries a specific carve-out for "bungalows" — furnished, single-family living units — when the lessor provides no maid service, food, or other common hotel services like entertainment or planned activities, and the rental runs at least a week. Because the housekeeping units meet every element of that test (no maid service, weekly-minimum rental, and the only "amenities" — a public coffee shop, pool, and lake access — are the kind of thing you'd find at an ordinary campground, RV park, or standalone vacation rental, not hotel-style service), they qualify as exempt bungalow rentals, entirely independent of how the resort's motel units are taxed. The motel and efficiency units, by contrast, remain fully taxable no matter the rental length, because they come with daily maid service — a common hotel service that disqualifies them from the bungalow exemption. And if a housekeeping unit is ever rented for less than a full week, it loses the exemption for that stay and becomes taxable too, just like the motel units.

What this means for you

Resorts and lodging operators with a mix of serviced and self-catering units

Whether a unit is taxable turns on that unit's own services and minimum rental term — not on how you tax other unit types at the same property. A self-contained unit with no maid service, rented for at least a week, can be exempt even while your serviced units next door stay fully taxable.

Properties offering shared amenities like a pool, beach, or coffee shop

Ordinary recreational amenities available to all guests — pool, beach access, a public coffee shop — don't disqualify a bungalow-style unit from the exemption. What disqualifies it is common hotel services tied specifically to the unit itself: maid service, food service, or planned activities/entertainment.

Operators renting the same unit type at varying lengths

Track rental length closely on a stay-by-stay basis. The identical housekeeping unit can be tax-exempt for a full week's stay and fully taxable for a shorter stay in the same season.

Common questions

Q: Does collecting hotel tax on a resort's motel rooms mean the resort must also tax its separate housekeeping units?
A: No — each unit type is analyzed on its own facts. Self-contained housekeeping units with no maid service, rented for at least a week, can qualify for the bungalow exemption regardless of how the resort's motel units are taxed.

Q: Do a resort's shared pool, beach, or coffee shop count as taxable "hotel services" that would disqualify a housekeeping unit?
A: No — ordinary recreational amenities open to all guests are treated like amenities at a campground or vacation rental, not disqualifying hotel services, as long as the resort doesn't provide unit-specific services like maid service, food, or planned activities.

Q: What happens if a housekeeping unit is rented for less than a week?
A: It loses the bungalow exemption for that stay and becomes taxable hotel occupancy, the same as the resort's motel and efficiency units.

Citations and references

Statutes and rules:

• Tax Law § 1105(e) (hotel occupancy tax)
• 20 NYCRR 527.9(a), (b)(1), (e)(5) (hotel occupancy imposition; definition of "hotel"; bungalow exemption)

Prior authority relied on:

• Breezy Point Surf Club, Inc. v. State Tax Commission, 67 AD2d 760 (a cabana with private bathroom/kitchen plus sleeping rooms constitutes a bungalow/apartment rental of real property)
• Juliana Motel, TSB-A-91(44)S (weekly-or-longer rental of housekeeping/efficiency units without hotel services is exempt under the bungalow rule)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2004.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a04_7s.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Tax Policy Analysis
Technical Services Division

TSB-A-04(7)S
Sales Tax
April 2, 2004

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S031009A

On October 9, 2003, the Department of Taxation and Finance received a Petition for
Advisory Opinion from Northward Ho! Resort, P.O. Box 464, Bolton Landing, NY 12814.
The issues raised by Petitioner, Northward Ho! Resort, are:
1) Whether the rental of housekeeping units containing their own kitchen, bathroom, and
sleeping rooms are subject to the imposition of sales tax.
2) Whether the fact that Petitioner is obligated to collect and remit sales tax on its adjoining
motel rooms requires that Petitioner collect tax on the rentals of the housekeeping units.
Petitioner submitted the following facts as the basis for this Advisory Opinion.
Petitioner operates a resort facility that contains 17 motel and motel efficiency units, and 8
housekeeping units. An efficiency unit is the same as a motel unit except that it includes two stove­
top burners, a sink, and refrigerator along with pots, pans and dishes. Daily maid service is
provided for the motel and motel efficiency units, and they are rented on either a daily or a weekly
basis. Each housekeeping unit contains its own kitchen, bathroom, and sleeping rooms. Petitioner
does not offer any services for the housekeeping units, and they are rented on a weekly basis in the
summer months. The resort has a coffee shop, pool, and lake beach access.
Applicable law and regulations
Section 1105(e) of the Tax Law imposes sales tax on, “The rent for every occupancy of a
room or rooms in a hotel in this state, except that the tax shall not be imposed upon (1) a permanent
resident, or (2) where the rent is not more than at the rate of two dollars per day.”
Section 527.9 of the Sales and Use Tax Regulations provides, in part:
(a) Imposition. A sales tax is imposed on every occupancy of any room or rooms in
a hotel, motel or similar establishment at the combined statewide and local sales tax rate in
effect at the situs of such establishment, except that the tax shall not apply to (1) the charges
for occupancy by a permanent resident, or (2) where the charge is $2 or less per day.
(b) Definitions. As used in this section, the following terms shall mean:
(1) Hotel. A building or portion of it, which is regularly used and kept open
for the lodging of guests. The term hotel includes but is not limited to an apartment

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Sales Tax
April 2, 2004
hotel, a motel, bungalow or cottage colony, boarding house or club, whether or not
meals are served.
*

*

*

(e) Nontaxable occupancy. The following occupancies are not subject to tax on hotel
occupancy:
*

*

*

(5) Bungalows. A lessor of bungalows, who rents bungalows which are furnished
living units limited to single-family occupancy, is not the operator of a hotel. Therefore, the
rents for the occupancy of such bungalows are not taxable, provided:
(i) no maid, food or other common hotel services, such as entertainment or
planned activities, are provided by the lessor; and
(ii) the rental is for at least one week.
The furnishing of linen by the lessor with the rental of a bungalow, without the
service of changing the linen, does not alter the nontaxable status of the rental charges.
Opinion
The Appellate Division has held that the charge for the use of a cabana (a unit with a private
bathroom and kitchen in addition to sleeping rooms) was for the rental of real property and that the
cabana constituted a bungalow or an apartment. See Breezy Point Surf Club, Inc. v. State Tax
Commission, 67 AD2d 760.
The Tax Department concluded in Juliana Motel, Adv Op Comm T&F, May 23, 1991,
TSB-A-91(44)S, that the rental of housekeeping and efficiency units for a term of at least one week
was not subject to the imposition of sales tax in accordance with Section 527.9(e)(5) of the Sales
and Use Tax Regulations, if no maid, food or other common hotel services or planned activities were
provided to the occupants.
In this case, Petitioner’s rental of housekeeping units for a term of at least one week will
constitute the rental of real property and will not be subject to the imposition of sales tax, provided
that Petitioner furnishes no maid, food or other common hotel services or planned activities to the
occupants of these units. Petitioner indicates that it does not provide maid service for its
housekeeping units, and that the available facilities for persons staying in these units are Petitioner’s
coffee shop, which is open to the public, a swimming pool, and lake beach access.

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Sales Tax
April 2, 2004
Rentals of a bungalow, efficiency and condominium units at a hotel resort with access to a
resort’s other common hotel services, such as entertainment or planned activities, may constitute the
provision of hotel services that make the charges for occupancy subject to tax.
In the present case, however, the privileges associated with the housekeeping units, i.e., the
use of an on-site swimming pool and beach access to the lake, are similar to the privileges ordinarily
provided with respect to renters at campgrounds, RV parks, and vacation house rentals not otherwise
connected with hotel properties. In this instance, therefore, the rental of the housekeeping units does
not constitute a taxable hotel occupancy. See Section 527.9(e)(5) of the Sales and Use Tax
Regulations.
Petitioner is an operator of a hotel with respect to the rental of the 17 motel and motel
efficiency units and must collect applicable state and local sales taxes on the charges for occupancy
for such units, whether such units are rented for a period of a week or more or for some shorter
period of occupancy. Additionally, when a housekeeping unit is rented for a period of less than a
week, such rental is likewise subject to the sales tax imposed on hotel occupancy, and Petitioner
must collect tax on such rentals.

DATED: April 2, 2004

NOTE:

/s/
Jonathan Pessen
Tax Regulations Specialist IV
Technical Services Division

The opinions expressed in Advisory Opinions are
limited to the facts set forth therein.