Short Term Rental Homes are Subject to Hotel Excise Tax
Beverly Cantrell - February 28, 2022 2:39 pm
City of Ponca City-
City Code 4-3-1 allows the City of Ponca City to collect the Ponca City Hotel Excise Tax of 8% from many different forms of lodging in Ponca City. Short term rentals, such as those provided by Airbnb and Vrbo are also subject to the hotel excise tax, as they fall under the definition of a hotel. A hotel is defined as:
Any building or buildings, structures, trailers, or other facilities in which the public may, for consideration, obtain sleeping accommodations in which one or more rooms are used for the accommodation of such guests, whether such rooms are in one or several structures. The term shall include hotels, apartmental hotels, motels, tourist homes, houses or courts, lodging houses, inns, bed and breakfast inns, rooming houses, trailer houses, trailer motels, dormitory space where bed space is rented to individuals or groups, apartments not occupied by “permanent residents”, and all other facilities where rooms or sleeping facilities or space is furnished for a consideration to the public at large. The term “facilities” shall not include hospitals, sanatoriums or nursing homes.
Hotel properties, must register with the City Clerk’s office before beginning operation. Each month’s Hotel Excise Tax Form and remission should be submitted by the 15th of the following month. Even if there are no proceeds from the property, a return from MUST be submitted to the City Clerk for each property reflecting as such. City Code 4-3-4 says operator responsibilities are as follows,
A. Prior to commencement of business or opening, every hotel operator shall file with the City Clerk: a Certificate of Registration and an Affidavit Form designating the operator. The required filings shall be made on forms prescribed by the City Clerk.
B. The City Clerk shall, within five (5) days after receipt of the required registration and affidavit, issue, without charge, to each operator a Certificate of Authority empowering such operator to collect the tax from the occupant and duplicates thereof for each additional hotel. Each certificate or duplicate shall state the hotel to which it is applicable. Such Certificate of Authority shall be permanently displayed by the operator in such manner that it may be seen and come to the notice of all occupants and persons seeking occupancy. Such certificates shall be nonassignable and nontransferable and shall be surrendered immediately to the City Clerk upon the cessation of business at the hotel named, or upon its sale or transfer, or upon the change of designated operator.
There are several penalties for non-submission of the hotel excise tax form or incorrect taxes reported. One is in the form of a $200.00 fine (City Code 4-3-6), which can be levied for each day that a return form is not submitted or if an incorrect tax is paid. The other penalties are taken by reference from Oklahoma Title 68, Section 217, which allows a penalty of 10% once a payment is 15 days late; however, if the total is paid within 60 days of the original due date those penalties are stricken. If there is determined to be an intent to defraud, there is a 50% penalty that is levied in addition to the above penalties.
Enforcement of these taxes will assist the City in promoting tourism and will help to increase bookings at these properties in turn. It allows for a fair market encompassing both commercial hotels and properties used for short term housing. Use of funds derived from Hotel Excise Taxes are defined in City Code 4-3-14:
A. Of the taxes collected pursuant to the provisions of this chapter, five-eighths (5/8) shall be set aside and used exclusively for encouraging, fostering and promoting conventions and visitors development and economic development associated with the travel and tourism industry. Three-eighths (3/8) shall be set aside and used exclusively for capital improvements to recreation facilities on public property for the public at large within Ponca City and its environs.
B. The City is authorized by this section to deduct a sum of three percent (3%) of all revenues produced from this tax to offset the cost of collection and disbursement. The minimum amount of this fee shall not be less than three hundred dollars ($300.00) per month.
For questions regarding registration, please contact either the City Attorney at 580.767.0337 or the City Clerk’s office at 580.767.0304. The City Clerk’s office is located on the first floor of City Hall, at 516 E. Grand Avenue.