Information Release

ST 1995-01 - Bed and Breakfast - December, 1995

The purpose of this information release is to reiterate the Ohio Department of Taxation's position on the application of the sales tax on sales made by bed and breakfast (B & B) operations.

Section 5739.01 (M) of the Ohio Revised Code (O.R.C.) defines a hotel as:

"... every establishment kept, used, maintained, advertised or held out to the public to be a place where sleeping accommodations are offered to guests, in which five or more rooms are used for the accommodation of such guests, whether such rooms are in one or several structures."

Section 5739.01 (N) O.R.C. defines transient guests as:

"... persons occupying a room or rooms for sleeping accommodations for less than thirty consecutive days."

Section 5739.02 (B)(2) O.R.C. states that sales tax does not apply to:

"Sales of food for human consumption off the premises where sold."

A B & B with five or more rooms available to transient guests is considered a "hotel" and sales tax is applicable to the total amount charged a transient guest for the room and food, regardless of whether the amount attributed to food is separately stated.

A B & B which has fewer than five rooms available to transient guests does not meet the definition of "hotel" and consequently does not have to charge the tax on the amount attributed to room rental. However, a B & B would be required to collect sales tax on the amount attributed to food being consumed on the premises. Since breakfast is one of the objectives of the B & B customer, all B & B's should separate the amount attributed to the room rental and the amount attributed to any meal. If there is no separation between the two charges, sales tax would be due on the total amount charged.

If you have any questions regarding this matter, you should call us at 1-888-405-4039.

Phone: 1-800-750-0750