If I have a contract with a
permanent resident, do I owe
hotel tax for the fi rst 30 days of
that guest’s stay?
When you have a binding contract with
a permanent resident for at least 30
days, no hotel tax is due. However, if
the contract is terminated before the
end of the fi rst 30 days, you owe hotel
tax for the period up to the time when
the contract was terminated.
If a guest stays for 30
consecutive days or more, has
paid hotel tax, and later asks for
a refund, what do I do?
In this situation, your guest has a legal
right to request a refund of hotel tax
paid. Therefore, you should refund the
amount of tax paid to your guest. If you
do not refund the amount of tax paid,
you are liable to pay that amount to
us. We do not refund hotel tax to hotel
guests.
If I am unsure whether or not a
guest is “permanent” at the end
of the reporting period, should I
report and pay hotel tax on that
guest’s stay?
When you do not know whether a
guest is a permanent resident at the
end of the period for which you are fi l-ing
Form RHM-1 because the guest’s
fi rst 30 days have not ended, you owe
hotel tax on receipts from that rental.
If the guest later stays for 30 days, the
receipts from that rental for the fi rst
30 days, or portion thereof, upon which
you have already paid tax should be
deducted on Form RHM-1, Step 2, Line
3, for the next month. Be sure to include
a breakdown with that month’s RHM-1
explaining the deduction.
Who is a “foreign diplomat?”
A foreign diplomat is an offi cial from a
foreign country who is stationed in the
United States while working as a diplo-mat,
consular offi cer, or staff member
at a foreign mission. This individual
has been issued a tax exemption card.
Each card contains the individual’s
picture and either a blue, a green, a
yellow, or a red stripe. A blue-striped
card exempts the individual from paying
hotel tax. A red -striped card exempts
the individual from paying hotel tax over
a minimum purchase amount listed on
the face of the card. A yellow-striped or
green-striped card exempts the individ-ual
from paying hotel tax unless hotels
are listed as a restricted category on
the face of the card, (e.g., exempt on
purchases, except hotels).
The United States Department of
State, Offi ce of Foreign Missions, is-sues
two types of exemption cards:
A personal tax exemption card is for
use only by the individual named on
the card.
A mission tax exemption card is for
offi cial use only.
In order to receive the exemption, your
guest must provide you with proper
identifi cation. You must attach a copy
of both sides of the tax-exempt card
to Form RHM-1 to be allowed to take
receipts from the rental of a room to a
foreign diplomat as a deduction. Please
indicate the color of the card on your
return. If you do not attach a copy of the
card to the return, we will bill you for tax
due, plus penalty and interest.
If a foreign diplomat is
accompanied by visitors, are
receipts from rentals to those
visitors also exempt from hotel
tax?
If a foreign diplomat has a
blue-striped mission card,
red-striped mission card and is
spending above the minimum pur-chase
amount listed on the card, or
yellow-striped or green-striped mis-sion
card that does not specifi cally
restrict hotels,
he or she may rent rooms on behalf
of the mission and obtain tax-exempt
lodging for visitors or nonaccredited
persons. The individual using the card
does not need to stay at the hotel. He
or she may pay the hotel bill with a
mission credit card or a mission check,
but may not use a personal credit card,
check, or cash.
The foreign diplomat may not use his or
her personal tax exemption card to pay
for hotel rooms of those outside his or
her immediate family.
Where can I get more
information about foreign
diplomats and tax exemption
cards?
If you would like more information about
foreign diplomats and their exemp-tion
from hotel tax, request a copy of
Diplomatic Tax Exemption Program by
contacting:
U.S. Department of State
Offi ce of Foreign Missions
77 West Jackson Blvd., Suite 2122
Chicago, IL 60604
Phone: 312 353-5762
Fax: 312 353-5768
or writing to:
Offi ce of Legal Services (5-500)
Illinois Department of Revenue
101 West Jefferson Street
Springfi eld, IL 62702
Are receipts from rentals
to federal, state, and local
government employees exempt
from hotel tax?
No. Receipts from rooms rented to
federal, state, and local government
employees are not exempt from hotel
tax. Being government employees does
not exempt these individuals from pay-ing
hotel tax.
Are receipts from rentals to
persons affi liated with schools
or charitable, religious, or other
not-for-profi t organizations
exempt from hotel tax?
No. Receipts from rooms rented to in-dividuals
associated with these groups
are not exempt from hotel tax. Being
associated with a school or not-for-profi t
organization does not exempt these
individuals from paying hotel tax.
If a person or not-for-profi t
organization presents a tax
exemption certifi cate issued
by the Illinois Department of
Revenue to me, are receipts
from that rental exempt from
hotel tax?
No. A tax exemption certifi cate issued
by the Illinois Department of Revenue
exempts certain entities from Illinois
Sales Tax, not hotel tax.
Page 2 of 3 PUB-106 (R-1/08)
Allowable Deductions for IDOR-Collected Hotel Taxes
