In recent weeks, multiple threats to your property have arisen from both the state and federal government. Things are moving quickly enough that we thought we should inform you in as concise a manner as possible.
1. 911 Multiple Phone Line Regulations
MLTA is involved in the draft rules-making process towards regulations requiring all end users with multiple phone lines (hospitals, dormitories, apartments, hotels, retirement homes, etc) to have systems which show the specific location (room number) of any 911 call going into a dispatch center. The statute and corresponding rules must take effect no later than December 31, 2011. Left untouched, these regulations could force every property with a phone system older than 2007 to replace those systems or face up to $10,000 in fines.
MLTA will be requesting an exemption to these requirements for any lodging property which has technology that already notifies the front desk of the location (room number) of any 911 call going out from the building. We’ll also ask for an exemption for any existing phone system that lacks the technology to handle such an enhanced 911 call. Such properties would be required to comply the next time they replace their phone system.
2. State Audits for Sales Tax Charges for Room cleaning under two Circumstances (Smoking & Pet Dander)
The State is taking the position that sales tax should be assessed by any hotel for cleaning of rooms that have been smoked in, or in which an unauthorized pet was kept. At this point we’re aware of only one hotel that is facing an audit for these services. The hotel had not assessed sales tax for what they thought were “services.” State Treasury is taking the position that the use tax already covers a number of cleaning and maintenance services that are automatically provided any hotel guest, (i.e. housekeeping, plumbing, HVAC repair). Under a worst case scenario the hotel could owe the state four years of back taxes. This could have industry-wide implications.
3. State Audits for Proper Documentation provided by Charitable Organization not charged Sales/Use Tax
The State and federal government are both strapped for cash and are taking a much more aggressive stance in enforcement of existing tax laws and regulations. It appears likely that State Treasury is going to more zealously enforce requirements for proper documentation of charitable groups that held events or function at properties in which they were not charged sales/use tax. If audited, a hotel lacking proper documentation on file from the 510(c)(3) organization, could find itself in the position of owing up to four years of sales and use tax under such scenarios. This could have even greater industry-wide implications.
Our association counsel is preparing a concise memo, summarizing these two issues (numbers 2 and 3) along with possible remedies which we’ll provide to all MLTA member properties.
4. Federal Audits of all Lodging Properties by Department of Labor
This was previously outlined in a grassroots email issued last week which can be read by clicking here.
5. Possible Anti-Trust Exposure arising from Industry Practice of “Call Arounds.”
This was outlined in an email transmitted last week which can be reread by clicking here.
Such issues all hitting at the same time threaten to overwhelm our small staff and ability to keep up. The membership and support provided by your property strengthen our ability to effectively represent your interests as we tackle these important issues.