Audit reveals significant tax discrepancies at local hotels
September 20, 2024 | Northampton County, Pennsylvania
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In a recent government meeting, officials reviewed the findings of independent audits on hotel room rental tax compliance for several establishments in Northampton County, revealing significant discrepancies and areas for improvement in tax reporting practices.
The Red Roof Inn in Easton was found to owe $2,650.15 in hotel room taxes for the period from January 1, 2021, to December 31, 2022. The audit indicated that while the hotel generally used the correct remittance forms and submitted them on time, there were notable errors. Specifically, the operator failed to complete the tax collected line on six remittance forms and inaccurately calculated the hotel rental tax for 21 out of 24 months reviewed. These issues were attributed to a transition between affiliated franchises, which hindered the provision of financial records for the first two months of 2021. Additionally, the hotel did not include property damage and smoking fees in their taxable revenue, which are considered taxable under county regulations.
The Sarah Mansion, operating under license number 120, was also scrutinized and found to owe $1,137.99 in hotel room taxes. The audit revealed that the hotel used outdated remittance forms for most of the audit period and submitted forms late in 15 of the 24 months, incurring penalties in 12 instances. Furthermore, the taxable room revenue was consistently understated, and the operator failed to refund the first month's tax for permanent residents as required.
Wind Creek Bethlehem, license number 148, demonstrated better compliance, using the latest remittance forms and submitting them on time. However, the audit uncovered that the hotel underreported $12,805.66 in taxable room revenue by not including fees for room damage, cleaning, and smoking. This resulted in an outstanding tax amount of $580.85 owed to the county.
The meeting underscored the critical importance of accurate reporting and compliance with tax regulations across all hotels to avoid penalties and ensure proper revenue collection for Northampton County. The findings serve as a reminder for hotel operators to adhere strictly to tax remittance policies and accurately report all taxable revenues to prevent future discrepancies.
The Red Roof Inn in Easton was found to owe $2,650.15 in hotel room taxes for the period from January 1, 2021, to December 31, 2022. The audit indicated that while the hotel generally used the correct remittance forms and submitted them on time, there were notable errors. Specifically, the operator failed to complete the tax collected line on six remittance forms and inaccurately calculated the hotel rental tax for 21 out of 24 months reviewed. These issues were attributed to a transition between affiliated franchises, which hindered the provision of financial records for the first two months of 2021. Additionally, the hotel did not include property damage and smoking fees in their taxable revenue, which are considered taxable under county regulations.
The Sarah Mansion, operating under license number 120, was also scrutinized and found to owe $1,137.99 in hotel room taxes. The audit revealed that the hotel used outdated remittance forms for most of the audit period and submitted forms late in 15 of the 24 months, incurring penalties in 12 instances. Furthermore, the taxable room revenue was consistently understated, and the operator failed to refund the first month's tax for permanent residents as required.
Wind Creek Bethlehem, license number 148, demonstrated better compliance, using the latest remittance forms and submitting them on time. However, the audit uncovered that the hotel underreported $12,805.66 in taxable room revenue by not including fees for room damage, cleaning, and smoking. This resulted in an outstanding tax amount of $580.85 owed to the county.
The meeting underscored the critical importance of accurate reporting and compliance with tax regulations across all hotels to avoid penalties and ensure proper revenue collection for Northampton County. The findings serve as a reminder for hotel operators to adhere strictly to tax remittance policies and accurately report all taxable revenues to prevent future discrepancies.
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