Illinois Department of Revenue
Publication 106
Purpose:
To explain to hotel operators the
deductions that are allowable
under the hotel taxes collected
by the Illinois Department of
Revenue.
Objectives:
To identify the hotel taxes that
are collected by the Illinois De-partment
of Revenue
To identify who is responsible for
paying the hotel taxes
To identify allowable deductions
under the hotel taxes
To answer frequently asked
questions regarding hotel tax
deductions
Allowable Deductions for
IDOR-Collected Hotel Taxes
General Information:
This publication explains the proper
reporting of allowable deductions for
the hotel taxes collected by the Illinois
Department of Revenue (IDOR).
Throughout this publication, the term
“hotel tax” refers to all IDOR-collected
hotel taxes to which you are subject.
What hotel taxes does the
IDOR collect?
The IDOR collects the following state
and Chicago area hotel taxes on
Form RHM-1, Hotel Operators’ Oc-cupation
Tax Return:
State tax
Illinois Hotel Operators’ Occupation
Tax (HOOT)
Chicago area taxes
Metropolitan Pier and Exposition
Authority (MPEA) Hotel Tax
Chicago Municipal Hotel Tax
(CMHT)
Illinois Sports Facilities Tax (ISFT).
The IDOR does not collect any local
hotel taxes other than the Chicago
area taxes listed above. All other local
taxes are paid directly to the local tax-ing
authority.
Upon whom are these taxes
imposed?
The state and Chicago area hotel taxes
collected by the IDOR are imposed on
persons in the occupation of renting,
leasing, or letting rooms to the public for
living quarters for periods of less than
30 days (i.e., hotel operators).
The HOOT is imposed on all hotel op-erators
whose businesses are located
in Illinois.
The CMHT and ISFT are imposed on
hotel operators whose businesses are
located in the city of Chicago.
The MPEA Hotel Tax is imposed on
hotel operators whose businesses are
located within the MPEA boundaries.
Depending on the location of your
business, you may be subject to one or
more of these hotel taxes.
What deductions are allowable
under these taxes?
You may take the following deductions
on Form RHM-1:
local hotel tax paid directly to a local
jurisdiction and not collected by the
IDOR
receipts from permanent residents
receipts from foreign diplomats
receipts from student housing not ap-plicable
to hotels
receipts associated with display
rooms, public rooms, sampler rooms,
meeting rooms, dressing rooms for
swimming pools, offi ces, and private
dining rooms
receipts from the sale of food and
beverages
receipts from the use of a telephone
receipts associated with barber
shops, laundry services, vending
services, ticket sales, valet parking,
garage rent, promotions, photos,
magazines, and sundries
room adjustment charges, allow-ances,
and discounts
bad debts and uncollectables
intracompany sales
refunds
Each of these items is deductible under
all IDOR-collected state and Chicago
area hotel taxes.
If an item is not listed above, it most
likely is not an allowable deduction on
Form RHM-1.
Note: Receipts from the sale of food
and beverages, prepaid phone cards,
barber shop services, laundry services,
vending services, promotions, photos,
magazines, and sundries may be sub-ject
to Illinois Sales Tax.
Are receipts from “no shows”
deductible on Form RHM-1?
No. When a guest becomes liable for
paying a charge to rent a room, the
receipts from the rental are subject to
hotel tax, regardless of whether the
person actually occupies the room.
Do I include all hotel taxes
I collected on Form RHM-1,
Line 1, Total receipts?
Yes. You must include all state, Chicago
area, and local hotel taxes you col-lected
in your total receipts on Form
RHM-1, Line 1.
If you collected a local hotel tax, you
may deduct that tax on Line 2, Local tax
deduction, because you pay it directly
to the local jurisdiction. You may not
deduct the amount you collected for the
MPEA Hotel Tax, CMHT, or ISFT on
Line 2.
Who is a “permanent resident?”
A permanent resident is a person who
has the right to occupy any room in a
hotel for at least 30 consecutive days.
PUB-106 (R-1/08) Page 1 of 3
