Individuals who are members of hotel rewards points programs are not required to pay Florida transient rental tax on rewards points redeemed for a room or room upgrade. The individual is only required to pay tax on charges not covered by the redeemed points.
However, a hotel may owe transient tax on a portion of its revenue related to excess reimbursements from a rewards fund. When a participating hotel receives more in reimbursements from the rewards program fund than it was required to contribute, taxes have not been paid on the funds received in excess of contributions, and the hotel must pay tax on the excess amount. Hotels should determine whether they’ve received more in reimbursements from the fund than it paid in contributions in January of each year using the preceding year’s total contributions and reimbursements. The hotel should take the total reimbursements received in the prior calendar year and subtract the total contributions paid in the prior calendar year, then divide that amount by the total reimbursements received in the prior calendar year. That percentage is then multiplied by the total reimbursements received in the current calendar year. Tax must be remitted on that amount. No “true-up” is required at any point. Special rules apply in the first year a hotel is participating in a rewards program. Any reimbursements subject to tax are to be included on the hotel’s sales and use tax return as part of the hotel’s gross transient rentals and taxable transient rentals. (Rule 12A-1.0615, Effective June 1, 2011; Tax Information Publication, No. 11A01-11, Florida Department of Revenue, December 13, 2011)