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1. What is Transient Occupancy Tax (TOT) also known as Hotel/Motel or Lodging Tax?

Transient Occupancy Tax is a tax paid by transients and is collected by operators of hotels, motels, boarding houses, and other lodging places which can accommodate four or more persons at one time, including travel campgrounds that offer guest rooms or other accommodations rented out for continuous occupancy for fewer than 30 consecutive days. The tax is 7% of the total amount paid for room rental, but effective May 1, 2021 TOT tax will increase to 8% of the total amount paid for room rental. If the room rental charge is not separately stated on the bill, the tax must be calculated on the room charge.

2. What is a Transient?

Loudoun County Ordinance Chapter 878.01 defines a transient as any person who, for a period of not more than twenty-nine consecutive days, either at his or her own expense or at the expense of another, obtains lodging and/or space in any hotel or travel campground for which a charge is made.

3. How do I register to file TOT with Loudoun County?

When registering for a license and business personal property taxes, our office will also set up an account for TOT.  Quarterly notices are sent to remind taxpayers of upcoming filing deadlines. Reporting should be completed online. Payment may also be made online at the Treasurer’s Office web portal.

 

4. Where do transient occupancy tax dollars go?

Beginning May 1, 2021, eight cents per dollar of the total cost of the room rental shall be collected. Of the tax collected, two cents are allocated to the County General Fund, three cents are allocated to promoting tourism, travel or business that generates tourism, and three cents are used to fund transportation. For more information regarding the county’s budget, please visit the Loudoun County Budget Office.

The person or entity offering rooms for rent shall collect 7 cents per dollar of the total cost of the room rental. Of that tax collected, two cents are allocated to the County General Fund, three cents is to be spent promoting tourism, travel or business that generates tourism, and the additional two cents imposed will be used to fund transportation. For more information regarding the County’s budget, please visit the Loudoun County Budget Office.

5. If I collect TOT, do I have to have a business license as well?

Operators of hotels or motels renting eight or more guestrooms are subject to the Business Professional and Occupational License tax.

6. Should the transient occupancy tax be imposed on meeting rooms?

TOT does not apply to meeting rooms. It is to be imposed only for the occupancy of any room or space that is suitable or intended for occupancy by transients for dwelling, lodging, or sleeping purposes.

7. How do I calculate TOT if the hotel charges include fees in addition to that of room rental?

If the charge made by any hotel to a transient includes an additional charge, then the portion of the total charge representing only room rental should be distinctly set out and billed to such transient as a separate item. If the room rental charge is not separately stated on the bill, then the tax must be calculated on the entire charge.

8. Who is exempt from TOT?

Transients who stay 30 consecutive nights or more are exempt from Loudoun County TOT. Transients who stay more than 90 continuous days are exempt from Virginia retail sales and use tax on the room charge, as well. For further guidance on Virginia State retail sales and use tax regulations, please visit the Virginia Department of Taxation.

No TOT is due on room rental paid to any hospital, medical clinic, convalescent home or home for the aged.

Room charges paid directly by the federal government or a federal agency, whether direct-billed or paid with a qualified exempt government-issued credit card, are not subject to TOT. Most qualified exempt government-issued credit cards will have the word "Exempt" printed on the card. If room charges are paid for by a government employee, TOT is applied to the room charge even if the employee is later reimbursed for such charges by the federal government or a federal agency.

9. If a company rents a room for 30 consecutive days or more and different employees occupy it during that period, is the company exempt from TOT?

Yes. It is not necessary that the same transient occupy the room for 30 consecutive days or more. A company may rent the room and have different employees occupy it during the 30 consecutive day period.

10. What are the due dates for the reporting and remittance of transient occupancy taxes collected?

The taxes collected from transients are held in trust by operators of lodging establishments until remitted to the County. On a quarterly basis, hotel operators report room charges and tax amount calculated and remit TOT collected to the Commissioner of the Revenue. TOT report and payment deadlines are as follows:

Report and Payment Deadline	TOT Collection Period
January 31	October - December
April 30	January - March
July 31	April - June
October 31	July - September

11. What is the penalty for late filing or remittance of the TOT?

There is a 10% late payment penalty if the return and remittance are not postmarked by the deadlines above. Interest at the rate of 10% per year computed on a monthly basis beginning on the first day following the date upon which the tax was due will be added to the tax and penalty.

12. What do I do if TOT was collected from a transient in error?

If a tax was collected in error, it should be returned to the transient who was improperly charged. If the hotel, motel, boarding house, travel campground, or other facility cannot return the improperly collected tax to the rightful payer, the law requires that it must be remitted to the County with other TOT collections and not retained by the operators of lodging establishments as additional income.

13. What records must I keep regarding TOT?

Businesses responsible for the collection and remittance of TOT should keep accurate records for the current and three prior calendar years. These records are subject to audit by the Office of the Commissioner of the Revenue.