Must a private homeowner collect sales tax on the rent when a guest pays to stay in the home during a special event like the 1993 World University Games?

Plain-English summary

Buffalo hosted the 1993 World University Games (July 8–18, 1993), a period when hotels, motels, bed-and-breakfasts, and campgrounds were expected to fill up during peak tourist season. The Games' Private Home Lodging committee planned to refer overflow visitors to local homeowners (or their real estate agents) who would take in paying guests, with the committee earning nothing for the referrals. The organizers asked whether those homeowners would have to collect sales tax on what guests paid.

New York's occupancy tax (Tax Law § 1105(e)) applies to "the rent for every occupancy of a room ... in a hotel." A "hotel" is a building "regularly used and kept open ... for the lodging of guests" (§ 1101(c)(1) and regulation 20 NYCRR § 527.9(b)(1)) — a definition that reaches apartment hotels, motels, boarding houses, cottage colonies, and clubs.

The Department held that an ordinary private home that is not regularly used for lodging guests does not become a hotel just because the owner houses event visitors for pay on this one occasion. Because the homeowner isn't operating a hotel within the meaning of the statute and regulation, the occupancy is not subject to the § 1105(e) sales tax.

What this means for you

Homeowners renting out a room for a one-off event

Occasionally taking in a paying guest during a big local event does not, by itself, turn your home into a taxable "hotel." The line the Department draws is whether the property is regularly used and kept open for lodging guests. A one-time, event-driven arrangement falls outside that, so you generally don't collect the state occupancy tax on it.

Short-term rental operators generally

The result turns entirely on "regularly used." Someone who routinely offers a home, room, or unit for short-term paid stays looks much more like an operator of a hotel/boarding house under § 1101(c)(1) — and modern short-term-rental activity is treated very differently from the isolated, single-event lodging described here. Don't read this 1993 opinion as a blanket exemption for recurring rental activity.

Event organizers and housing coordinators

Referring visitors to private homes for supplemental lodging does not make the organizer a vendor, especially where no compensation is taken for the referral. The tax question rests with each host and whether that host is regularly in the lodging business.

Common questions

Q: Do I have to collect sales tax if I house a paying guest during a special event?
A: Not under these facts. The Department held that a private home not regularly used for lodging guests isn't a "hotel," so the occupancy isn't subject to the § 1105(e) occupancy tax.

Q: What makes a place a taxable "hotel"?
A: A building "regularly used and kept open" for the lodging of guests (§ 1101(c)(1); 20 NYCRR § 527.9(b)(1)). That includes apartment hotels, motels, boarding houses, cottage colonies, and clubs.

Q: Would this cover a regular short-term rental?
A: Not necessarily. This opinion addressed a one-time, event-driven arrangement in a home not regularly used for lodging. Regularly offering a property for paid short-term stays points toward being a hotel operator, which is treated differently.

Q: Did it matter that the referral committee earned nothing?
A: The committee's role was simply to refer visitors to homeowners and it received no compensation. The tax analysis focused on whether each homeowner was operating a hotel, not on the committee.

Q: Can another homeowner rely on this opinion?
A: No. An advisory opinion binds the Department only as to the petitioner and the facts described; another taxpayer with different facts cannot rely on it.

Citations and references

Statutes and authorities:

• Tax Law § 1105(e) (tax on rent for occupancy of a room in a hotel)
• Tax Law § 1101(c)(1) (definition of "hotel")
• 20 NYCRR § 527.9(b)(1) (Sales and Use Tax Regulations definition of "hotel")

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1993.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a93_5s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-93 (5) S
Sales Tax
January 5, 1993

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S921014A

On October 14, 1992 a Petition for Advisory Opinion was received from World University
Games, c/o Buffalo Athletic Corporation, 235 North Street, Buffalo, New York 14202.
The issue raised by Petitioner, World University Games, is whether the owner of a private
home will be required to collect sales tax when a guest pays for staying in the home during the 1993
World University Games.
During the period from July 8, 1993 through July 18, 1993 the World University Games
competitions will be held in Buffalo, New York. The Private Home Lodging committee of the
World University Games has determined that individuals unable to be lodged in hotels, motels, Bed
and Breakfasts and campgrounds because the games are being held during a busy tourist season may
require supplemental private home lodgings during this event. The committee will refer such
individuals to homeowners or their real estate agents. The committee will not receive any
compensation for such referrals.
Section 1105(e) of the Tax Law imposes a 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 a rent is not more than at the rate of two dollars per day."
Section 1101(c)(1) of the Tax Law defines the term "hotel" as follows:
A building or portion of it which is regularly used and kept open as such for
the lodging of guests. The term 'hotel' includes an apartment hotel, a motel, boarding
house or club, whether or not meals are served.
Section 527.9(b)(1) of the Sales and Use Tax Regulations defines the term "hotel" as follows:
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 hotel,
a motel, bungalow or cottage colony, boarding house or club, whether or not meals
are served.
Accordingly, private home owners who provide lodging during the 1993 World University
Games to individuals referred to them by the Private Home Lodging committee and whose homes
are not regularly used for the lodging of guests, will not be considered to be operating a hotel in
accordance with the meaning and intent of Section 1101(c)(1) of the Tax Law and Section

-2­
TSB-A-93 (5) S
Sales Tax
January 5, 1993
527.9(b)(1) of the Sales and Use Tax Regulations, and thus the occupancy will not be subject to the
sales tax imposed under Section 1105(e) of the Tax Law.

DATED: January 5, 1993

/s/
PAUL B. COBURN
Deputy Director
Taxpayer Services Division

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