Hotel Renovations Often Produce Sales Tax Credit or Refund

If Your Hotel Has Been Recently Renovated or Remodeled, You Could Be Owed a Refund or Credit.

Sales tax paid on various remodeling, renovations, and other less obvious tax-exempt aspects of hotel improvements, qualify for refund or credit…yet an astounded amount of overpaid taxes go unclaimed and therefore ultimately relinquished to the state.

Hotel management and hospitality management companies are continually renovating properties to add new technology, refresh interiors and improve efficiency to remain competitive and improve profitability.

Hotel renovations, whether managed by hotel management, or a contractor, often span many months and cost hundreds of thousands – to many millions of dollars. Renovations almost always include a significant amount of sales tax paid on line items that often go unrecognized as exempt from sales and use tax. This is especially true when there are periodic draws throughout an extended renovation or remodeling project over many months.

Time is Money

Erroneously overpaid sales tax is capital lost forever, unless it is submitted for credit or refund within the guidelines of tax law.

Hotel renovation, remodeling almost always includes sales and use tax exemptions unknown to CFO’s, Tax Attorneys, CPA’s Accounts, Sales Tax, Finance Dept.

Sales tax overpayment during a renovation can be easy to miss, even when managed by a sales tax or finance team. The method by which most renovations are billed and paid, prevent many tax-free transactions from being immediately visible to the finance team managing payment for renovations by independent vendors and contractors. It is important to stress that hotel renovations produce very specific scenarios that CFO’s, CPA’s, Tax Attorneys, Sales Tax Departments and Accountants are typically not familiar with…often resulting in lost capital.

Sales tax experts – who specialize in sales tax only – are typically most knowledgeable and extremely effective in identifying, filing for, and arguing legitimacy of sales tax exemptions to the Tax Department when requesting a refund or credit.

Sales Tax Recovery For NYC Hotels Undergoing Renovations

When is the best time to engage a sales tax expert when undergoing hotel renovation or remodel?

For maximum benefit, sales tax consultants should be engaged as early in the renovation process possible. However, a post-renovation audit can identify exemptions that qualify for credit or refund, if conducted in a timely manner.

How Much Sales Tax Could Realistically Be Overpaid?

R.K. Miller Associates has recovered hundreds of thousands of dollars for various hotels undergoing renovations, or have completed renovation.

Our sales tax consultants recovered close to $1 million in sales tax overpaid by one hotel in Manhattan that had undergone extensive renovation after sale of the property.

The sales tax and finance team of a large hotel management company has relied upon the sales tax expertise in other complex and large sales tax matters after R.K. Miller Associates reduced sales tax liability by nearly $1 million dollars as it related to a complex transaction.

Might it be a worth having a Sales Tax Expert on your team?
Contact us today to discuss how we may be of service to you.