To assist hotels during the COVID-19 situation, the Government of Alberta has announced that hotels and other lodging providers will be allowed to keep the tourism levy they collect between March 1 to December 31, 2020.
Accommodation providers are still expected to file returns throughout 2020, as required by legislation, and will be expected to resume regular tourism levy payments in 2021. Amounts collected prior to March 1, 2020 that are being deferred under the previously announced deferral program can continue to be deferred until August 31, 2020.
About the Act
The Tourism Levy Act requires that providers of temporary accommodation in Alberta with more than four bedrooms available for rent at the same time in the same location collect and remit the levy to Alberta Finance Tax and Revenue Administration. The AHLA estimates that 1200 hotels and motels from communities across Alberta collect and remit the levy. Roughly 96% of the guest rooms on which the levy is charged are owned by AHLA members.
When the Tourism Levy became effective on April 1, 2005, the Economic Development Minister stated that all of the funds collected would be used for tourism marketing and development. The AHLA maintains the position that the full amount of the Tourism Levy should be allocated to these types of initiatives. View the AHLA’s government advocacy efforts on the Tourism Levy.
It is up to you to ensure you are collecting and remitting the levy properly. A number of hotels around the province have been audited, and some have received significant assessments for not charging the Levy properly. Review this special notice.
Exemptions from the Levy
Certain types of lodging are exempt from the Tourism Levy. These include:
- Accommodations held by the same individual(s) continually for a period of 28 days ore more;
- Accommodations provided by an employer to employees working in remote locations, whether owned and operated by the employer or by someone on behalf of the employer;
- Accommodations paid for directly by the Government of Canada;
- Facilities operated as hospitals, nursing homes, homes for the aged, and social care centres;
- Accommodations occupied by diplomatic representatives of foreign embassies;
- Tent, trailer, or R.V. sites at campgrounds or trailer parks; and
- Rooms in a hotel or other lodging place that do not contain beds or other sleeping facilities, which are rented for merchandise displays or for meetings, dinners, receptions, or other entertainment.
The operator can omit the Tourism Levy charge only if an exemption condition is known at the time the room is paid for and is recorded on the invoice. Operators must retain relevant documents to support all tax exempt revenue recorded. These documents are subject to inspection and audit by appointed representatives of the Provincial Treasurer.
If at first the levy is charged, and the qualification for an exemption is later established, the operator may refund the levy to the payer and deduct the amount on its next tax return. The operator should then retain the documentation to support its own deduction.