Travel Technology - California 10.5% tax on internet??

I stayed at a hotel in San Diego not long ago and in looking at my bill, they charged my internet at a rate of 10.5%. I had thought that there was a federal law against this. Does anyone have any info about this tax and was it levied properly? Thanks.

They charged tax for a service they provided you in the hotel, which is appropriate.

This is not the same as being taxed for something you bought off the internet, which is what the federal law is about.

They charged tax for a service they provided you in the hotel, which is appropriate.

Really? It seems like an internet access tax to me, which I thought was illegal. CA is not one of the grandfathered states in the Internet Tax Freedom Act. I don't understand the specifics of this though; perhaps sales taxes apply.

That was my exact thought. It was taxed at a 10.5% rate. I think the hotel is taxing something they shouldn't be and that is why I asked. They are calling it a 'wired for business' tax. Wired for business is what they call their internet connection. Any ideas on how to handle this? It's a small tax, but it seems illegal to charge it.

Really? It seems like an internet access tax to me, which I thought was illegal. CA is not one of the grandfathered states in the Internet Tax Freedom Act. I don't understand the specifics of this though; perhaps sales taxes apply.

They aren't charging you for the internet access.. they're charging you for the facility to access the internet ;)

TX got into a big bruhaha about this afew years ago. They eventually determined they could charge sales tax on the internet access that didn't leave the state. They decided this would be email, since the email server is located in texas. ISPs had to determine how much of the fee was for email, and how much was for internet.. It got messy..

Was it 10.5% of about $10/day (ie $1.05)? Honestly I would personally not spend too much time pursuing the matter. Of course if it was Europe at 20-40 euros/day I would spend a couple of minutes pursuing it.

MisterNice

I stayed at a hotel in San Diego not long ago and in looking at my bill, they charged my internet at a rate of 10.5%. I had thought that there was a federal law against this. Does anyone have any info about this tax and was it levied properly? Thanks. California did not levy the tax, the City of San Diego did.

The tax is known as the City of San Diego's "Transient Occupancy Tax" (TOT) and is currently 10.5% of "assesable rent". There's also a relatively new (1/1/08) additional Tourism Marketing District (TMD) assesment of 2% for San Diego hotels with 70 or more sleeping rooms.

So should my internet be considered "assessable rent" and wouldn't the federal law make this tax illegal?

At first I thought that the San Diego TOT and TMD should only be applied to the room rent only, but then I found this:

http://www.sandiego.gov/treasurer/pdf/r303226.pdf

If you read section 2 and 3, the TMD includes services. My guess is that their TOT rules are the same as the TMD rules.

There's more stuff on this page:

http://www.sandiego.gov/treasurer/tot/index.shtml

-David

Got to pay for that new ballpark somehow. Fortunately for the ballclub and city, non residents are easier to tax.