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Texas Hotel Consumables sales tax audit

By March 19, 2019March 27th, 2024Texas Sales Tax

Sales Tax Audit for Texas Hotel Consumables

If you are the owner of a hotel, then, chances are that you providing hotel consumables – soap, shampoo, conditioner, mouthwash, shower caps, pens, notepads, and other similar non-reusable, consumable items .

If you are undergoing a Texas sales and use tax audit, then, you should know that the The Texas Comptroller of Public Accounts (“Comptroller”) has long held that hotel consumables placed in rooms for use by hotel guests are subject to sales and use tax at the time of purchase.

However, In its opinion in DTWC Corp. v. Combs, No. 03-10-00801-CV (Tex. Ct. App. April 11, 2013), the court reasoned that hotel consumables are being sold by the hotel to its guests and, therefore, qualify as non-taxable under the plain meaning of the sale for resale exemption codified in Section 151.302(a) of the Texas Tax Code.

Facing a sales tax audit in Texas? Contact our attorney for a consultation.

Ansari Law Firm

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