Booking a hotel in New York City can be an exciting yet daunting experience, especially when it comes to the extra taxes and fees involved. If you’re visiting the Big Apple and want to know exactly how much tax to expect on your hotel bill, you’ve come to the right place.
If you’re short on time, here’s a quick answer to your question: Hotel room taxes in New York City typically range from 14.75% to 18.375% on top of the nightly room rate.
New York Hotel Room Tax Overview
New York State Sales Tax
The New York State sales tax rate is currently 4%. This tax applies to hotel rooms across the state. So if you book a hotel room in New York City for $200 per night, you’ll pay 4% state sales tax on that room rate, which comes out to $8.
The statewide 4% sales tax has been in effect since 1965. While there have been some minor changes over the years, such as exemptions for certain goods and services, the overall state sales tax rate has held steady at 4% for over 50 years now.
New York State collects this sales tax revenue and uses it to fund essential services like education, healthcare, transportation and more. So by paying sales tax on your hotel stay, you are contributing to many important programs that benefit New York residents.
New York City Sales Tax
In addition to the 4% state sales tax, New York City imposes its own 4.5% local sales tax on hotel rooms and other goods and services purchased within the five boroughs.
So using the same $200 per night hotel room example, you would owe an extra 4.5% in NYC sales tax, or $9. This brings the total sales tax on your $200 hotel room to 8.5% when combining state and local rates.
The New York City sales tax was first enacted in 1934 at a rate of 2%. Over the years, it has gradually increased to keep up with rising City expenses. The current 4.5% rate has been in effect since 2009.
Revenue from the New York City sales tax helps pay for essential City services and infrastructure including the subway system, police, firefighters, parks, schools and more.
New York City Hotel Room Occupancy Tax
On top of state and local sales taxes, New York City imposes an additional 5.875% tax specifically on hotel rooms and other short-term rentals.
This is known as the New York City Hotel Room Occupancy Tax. It applies to the total bill for a hotel room before any other taxes are added on.
So for a $200 hotel room, you would owe 5.875% occupancy tax in addition to regular sales tax, which equates to $11.75. When you add up all the taxes, the total tax rate on a New York City hotel room comes out to:
- 4% New York State Sales Tax
- 4.5% New York City Sales Tax
- 5.875% New York City Hotel Room Occupancy Tax
This brings the total tax rate on New York City hotel rooms to 14.375%. So that $200 per night hotel room would have $28.75 in taxes tacked onto it, bringing your total bill to $228.75 per night.
The New York City Hotel Room Occupancy Tax has been in place since 1970. The revenue from this tax helps fund promotion of tourism and improvements to the City’s transportation system and other infrastructure.
So while painful to pay, these taxes do provide benefits for NYC residents and visitors alike.
Tax Rates in Popular NYC Hotel Neighborhoods
When staying in a hotel in Manhattan, there are several taxes that you can expect to pay on top of your room rate. The city and state tax rate in Manhattan is currently 14.75%. Additionally, there is a hotel room occupancy tax of $2.00 per room per night for rooms with a rate under $40.00 per night, and $3.50 per room per night for rooms with a rate of $40.00 or more.
These taxes are used to fund various city services and initiatives.
In Brooklyn, the tax rates for hotel rooms are similar to those in Manhattan. The city and state tax rate is also 14.75%, and the hotel room occupancy tax is the same as well. Visitors to Brooklyn can expect to pay these taxes when staying in a hotel within the borough.
Queens, like Manhattan and Brooklyn, also has a city and state tax rate of 14.75% for hotel rooms. However, the hotel room occupancy tax in Queens differs slightly. Rooms with a rate under $40.00 per night are subject to a $1.50 tax per room per night, while rooms with a rate of $40.00 or more are subject to a $2.00 tax per room per night.
The tax rates for hotel rooms in the Bronx are the same as those in Manhattan and Brooklyn. Visitors staying in hotels in the Bronx can expect to pay the 14.75% city and state tax rate, as well as the hotel room occupancy tax.
Staten Island, the smallest of the five boroughs, also has the same tax rates for hotel rooms as the rest of New York City. The city and state tax rate is 14.75%, and there is a hotel room occupancy tax as well.
Visitors to Staten Island can enjoy their stay knowing that the taxes they pay contribute to the city’s services and amenities.
For more detailed information about hotel taxes in New York City, you can visit the official website of the New York City Department of Finance.
Additional Hotel Fees to Watch For
When booking a hotel room in New York, it’s important to understand that the cost of the room is not the only expense you’ll incur. There are several additional fees that you should be aware of to avoid any surprises on your bill. Here are some common fees to watch for:
Destination Marketing Fee
One fee that you may come across is the Destination Marketing Fee. This fee is typically charged by hotels in order to fund marketing and promotional efforts aimed at attracting visitors to the city. It is usually a percentage of the room rate and can vary depending on the hotel.
The fee is intended to support tourism initiatives and promote the local economy.
Occupancy Tax Surcharge
Another fee to be aware of is the Occupancy Tax Surcharge. This tax is imposed by the city or state government and is added on top of the room rate. The specific amount of the tax can vary depending on the location and type of accommodation.
It is important to note that this tax is separate from the sales tax and is specifically designated for lodging purposes.
If you’re booking a high-end hotel or luxury accommodation in New York, you may also encounter the Mansion Tax. This tax is applicable to properties with a sale price of $1 million or more and is typically paid by the buyer.
However, some hotels may pass on this tax to their guests in the form of an additional fee. The Mansion Tax is designed to generate revenue for the city and fund affordable housing initiatives.
It is important to carefully review the terms and conditions of your hotel reservation to understand all the fees and taxes that may be applicable. Additionally, it’s a good idea to factor these additional costs into your budget when planning your trip to New York.
Tips for Minimizing Your Hotel Tax Bill
Look for Package Deals
One way to minimize your hotel tax bill in New York is by looking for package deals. Many hotels offer special packages that include accommodations, meals, and other amenities at a discounted rate. These packages often have lower tax rates compared to booking a room and paying for each service separately.
Additionally, package deals can provide great value for money, allowing you to enjoy a range of services and experiences at a lower overall cost.
Book Directly With the Hotel
Booking directly with the hotel is another effective way to minimize your hotel tax bill. When you book through third-party websites or online travel agencies, they may charge additional fees or taxes on top of the standard hotel tax.
By booking directly with the hotel, you can avoid these extra charges and potentially save money. Additionally, hotels may offer exclusive discounts or perks for direct bookings, further enhancing your savings.
Ask About Discounts
Don’t be afraid to ask the hotel about any available discounts. Hotels often have special rates for certain groups, such as AAA members, senior citizens, or government employees. By providing proof of eligibility, you may be able to secure a discounted rate that includes lower tax charges.
It’s always worth inquiring about any discounts that you may qualify for, as this can significantly reduce your overall hotel tax bill.
Consider Alternative Accommodations
If you’re looking to minimize your hotel tax bill in New York, consider alternative accommodations such as vacation rentals or bed and breakfasts. These types of accommodations may have different tax structures or lower tax rates compared to traditional hotels.
Additionally, they can provide a unique and personalized experience during your stay. Just make sure to research and book through reputable platforms to ensure a safe and enjoyable experience.
With three layers of taxes plus additional fees, hotel bills in New York City can take travelers by surprise. By understanding the typical tax rates in each borough and watching out for extra charges, you can avoid sticker shock.
With some smart shopping and booking strategies, you may also be able to trim a few dollars off your final bill.
Wherever you choose to rest your head in the city that never sleeps, safe travels! Thanks for reading our guide on how much tax is charged on hotel rooms in the Big Apple.