Billing a Unit Acquired for Supply Purposes
You must collect the tax on lodging in advance when you bill accommodation units to persons (such as travel agents, convention organizers, social clubs) that intend to supply the units to other persons for a price.
For accommodation units located in a region where the $2 tax on lodging applies, add $2 to the price of each overnight stay.
For accommodation units located in a region where the 3% tax on lodging applies, do not calculate the tax at that rate. Collect $3 for each overnight stay billed instead.
If the lodging unit is located in a region where the 3.5% tax applies, instead of calculating the tax at a rate of 3.5%, you must collect $3.50 in advance for each lodging overnight stay billed.
For accommodation units provided free of charge, collect the $2, $3 or $3.50 tax (depending on the region). GST and QST are charged on that amount.
Example
A hotel owner bills a travel agent for 20 rooms for one night. The travel agent then charges each of his clients the price of the room, which includes the tax on lodging. The hotel owner bills the tax in one of the following ways, depending on the region where the establishment is located:
| 20 rooms (one night) (20 × $90)
|
|
$1,800.00
|
| $2 tax on lodging (20 × $2)
|
+
|
$40.00
|
| Subtotal
|
|
$1,840.00
|
| GST ($1,840 × 5%)
|
+
|
$92.00
|
| QST ($1,932 × 9.5%)
|
+
|
$183.54
|
| Total
|
|
$2,115.54
|
| 20 rooms (one night) (20 × $90)
|
|
$1,800.00
|
| $3 tax on lodging (20 × $3)
|
+
|
$60.00
|
| Subtotal
|
|
$1,860.00
|
| GST ($1,860 × 5%)
|
+
|
$93.00
|
| QST ($1,953 × 9.5%)
|
+
|
$185.54
|
| Total
|
|
$2,138.54
|
| 20 rooms (one night) (20 × $90)
|
|
$1,800.00
|
| Tax on lodging of $3.50 (20 × $3.50)
|
+
|
$70.00
|
| Subtotal
|
|
$1,870.00
|
| GST ($1,870 × 5%)
|
+
|
$93.50
|
| QST ($1,963,50 × 9.5%)
|
+
|
$186.53
|
| Total
|
|
$2,150.03
|