Example of How Sales and Lodging Taxes WorkThe following discussion will cover how the basic sales and lodging tax calculations are applied and how the tax payment is remitted. Example: Destin, Florida vacation rental In this example we assume a transaction where the home is rented 7 nights for $250 per night, plus a $100 cleaning fee. Sales tax calculation are relatively simple the tax rate is simple applied to total rents (revenue) received. | Line Item | Amount | Comments | Rent
| $1,750.00 | Seven nights x $250 per night | Cleaning fee
| $100.00 | Cleaning fees or any other fees are subject to sales tax | Total collected
| $1850.00 | Total Revenue collected from the renter. There are no deductions for any expenses, this is a tax on revenue, not income or profit. | Sales Tax Rate
| 11.0% | 6% Florida Sales Tax and 5% Okaloosa County Tourist Development Tax | Tax
| $203.50 | Total revenue of $1850 x 11.0% | | Total Collected | $2,053.50 | Total cash collected from the customer of which $1850 you keep and $203.50 you will pay to the state and county. |
Now that you have collected the tax from your customer the following will summarize the tax return filing and payment process. In the following example we will assume the previous rental was the only booking for the month. | Line Item | Florida | Okaloosa County | | Revenue
| $1.850.00 | $1,850.00 | A separate tax return is file for FL and Okaloosa county separately | Tax rate
| 6.0%
| 5.0% | |
Tax Due | $111.00 | $92.50 | Revenue x the tax rate | | Collection Allowance
(Max $30)
| ($2.78)
| ($2.31) | FL and FL counties allow the taxpayer to keep 2.5% of the tax due as compensation for collection and remitting the tax, as long as the return is filed on time. | Net Tax Due
| $108.22
| 90.19 | This is the amount you pay, issue a separate check to Florida and Okaloosa county. |
The completed tax return form and payment need to be postmarked by the 20th of the month following the month of the tax period. For example, taxes on revenue for the July period need to be postmarked by August 20th. Important Note
This example was for a vacation rental in Destin, FL. It is important to note that tax rates, due dates, collection allowances (if any) and filing frequency for returns vary by city, county and state all over the U.S. The method of calculating the tax on a rental and calculations for completing a return are generally universal for all jurisdictions. A high percentage of locations require monthly filing but there is also a high percentage that require quarterly filing. Taxes being due on the 20th is the most common date, but a large percentage are also due on the 15th, 25th and 30th (or last day of the month). |
