The room occupancy excise imposed by Chapter 64G of the General Laws applies to the first ninety consecutive days of an occupancy of a room in a hotel, motel, or lodging house that is designed and normally used for sleeping and living purposes.

In order to qualify as a continuing occupancy upon which the excise is not imposed after the ninetieth consecutive day, the occupant must be the same for the entire period of occupancy. A break in the continuing nature of an occupancy begins the ninety day period anew.

Any change in the person occupying the room constitutes a new occupancy.

"Person" is as defined in Chapter 64G, Section 1(g) to include corporations as well as other specified legal entities and individuals.

Example 1:
An airline contracts with a motel operator for use by airline employees of eight rooms to be paid for by the airline whether or not the rooms are actually used at the rate of eighteen dollars ($18.00) a day per room on a continuing basis. The operator is required to collect the excise on the rental charges to the airline for the first ninety consecutive days. No excise is imposed on the rent for the continuing occupancy of these rooms after the ninetieth day.

Any room reservation arrangement between a person and an operator under which the person does not become liable for the rent for use or possession of a room in a hotel, motel or lodging house does not constitute an occupancy.

Example 2:
A corporation contracts with a hotel operator to reserve several rooms for use by its employees on a continuing basis at the rate of fifteen dollars ($15.00) a day per room. Under the contract, the corporation may cancel its reservations by seven o'clock each evening without obligation; otherwise, the corporation is liable for the full rate for occupancy. The operator is required to collect the excise on fees for occupancy whenever the corporation is liable for the fifteen dollar ($15.00) rental, for up to ninety consecutive days. Exercise of the cancellation option constitutes a break in the occupancy of the corporation and therefore begins the ninety day period anew.

Any change in the room occupied within the same hotel, motel or lodging house by a person does not constitute a new occupancy.

Example 3:
An individual occupies the same room in the same hotel for sixty-two consecutive days and then moves to a different room in the same hotel. The operator is required to collect the excise on the rent for the new room for the following twenty-eight days of the occupancy. Thereafter, the continuing occupancy of the room by the individual is not taxable. This result follows even though the rates on the two rooms differ.



/s/ L. Joyce Hampers
Commissioner of Revenue

July 09, 1979
TIR 79-5