A reminder that sales taxes are likely due on housekeeping services and data processing services

Do you utilize a third-party housekeeping or janitorial service to clean your lodging property?  If so, be aware that these third-party charges are typically subject to Texas sales tax, and the lodging property should be prepared to remit sales taxes on those services.  

This is true even if the housekeeping or janitorial service company fails to assess the tax on their invoice, and this could become a liability for the lodging property in the event of a sales tax audit.  This Texas Comptroller publication provides additional guidance and links to the applicable rules on point.

Additionally, some lodging operators have been surprised to learn that sales taxes are due on data processing services.  These taxable data processing services may include the usage of a reservation, booking, or lead management platform. Because many out-of-state data processing service companies do not collect Texas sales taxes, Texas lodging properties should be prepared to file a “use tax” return with the Texas Comptroller.  More information on how the sales tax applies to data processing services is available here.

Looking for more information on taxes in Texas?  Check out this THLA member resource.

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