Hotels & Motels

You owe tax on hotels and motels if:
You are operating a hotel or motel in the city.

Examples of hotel/motel income which is taxable includes, but is not limited to:

• Guest room charges
• Meeting/banquet room charges
• Food/beverage charges
• Movie charges
• Local telephone call charges
• Commissions received on vending machine income

Tax rate on hotels and motels
The city transaction privilege tax rate on hotels/motels is 1.75% of gross income. (Note: The Mesa City Tax rate increased to 1.75% effective 07/01/2006)  In addition to the transaction privilege tax, hotels/motels area also subject to the Transient Occupancy Tax, which is discussed below.

Collection of Transaction Privilege Tax
You may choose to charge the transaction privilege tax separately on each sale, or include transaction privilege tax in your price. If you over charge any tax to your customers, you must remit the excess tax to the city.

If your price includes transaction privilege tax, you can compute how much of the total price is transaction privilege tax. You may deduct the total city, state, and county transaction privilege taxes from your gross receipts.

You are also required to have a Transient Occupancy Tax License for this business.