Understanding Hotel Taxes, Resort Fees & Deposits For Incidentals

by SharonKurheg

When you find a hotel rate, especially in the United States, you will rarely, if ever pay just that amount. Just like when you purchase an item in the U.S., unless it says that tax is included, chances are good that you’ll have to pay tax on top of the advertised price; that’s just how we charge for things in the U.S. The same goes for hotels. Unless an advertised price explicitly says that taxes & fees are included, you can bet that something(s) is/are going to be added on to make your final price. And in recent years, some hotels have added on something sneaky called a “resort fee,” too. Plus you often have to put down a deposit for incidentals. But let’s start at the very beginning (a very good place to start):


So you got a fantastic rate on that hotel room, right? Don’t forget the taxes! Because tax codes in the United States vary from state to state (and oftentimes from county to county), the hotel taxes you’ll eventually pay will vary depending on what state AND sometimes what county you’re in. Here are some examples:


If your hotel is in Orlando FL, which is in Orange County FL, your hotel cost will be the price of the room, plus 6.5% sales tax + 6.0% resort/tourist tax, for a total of 12.5% (BTW that resort/tourist tax may also be called an occupancy tax, but may also be known as a lodging tax, a room tax, a sales tax, or a hotel tax).


If your hotel is in Kissimmee FL, which is in Osceola County (that’s just south of Orange County and does include a few of the resort hotels at Walt Disney World), your hotel cost will be the price of the room, plus 7.5% sales tax + 6.0% resort/tourist tax, for a total of 13.5%.


If you’re visiting Key West, that’s in Monroe County. The combined sales tax rate for Key West, FL is 7.5%  (the Florida state sales tax rate is currently 6%. The Monroe County sales tax rate is 1.5%). Other taxes that are included bring the total rate up to 12.5%


If you’re visiting New York City, the hotel tax will be:

  • New York State Sales Tax for Hotels – 4%
  • New York City Sales Tax for Hotels –  4.5%
  • MCTD (Metropolitan Commuter Transportation District) sales & use tax – 0.375%
  • NYC Hotel Room Occupancy Tax Rate –  $2 per room + 5.875%
  • New York State Hotel Unit Fee (aka Javits Center fee)  – $1.50 per unit per day

It winds up being a little less than 15% + $3.50 per day.


If you’re staying in Las Vegas, the amount of tax you will pay can vary from, not only where you are, but what your accommodations are. Guests at non-resort lodging (i.e., motels) can (might) pay as little as 10 percent, but hotel rooms on the Strip come with a 12% tax, while those in the Downtown area carry a 13% tax.

Any of those numbers could go up if you’re using a service to help you book your hotel. Not all, but some services will add another percentage for themselves, for added profit. And you can’t tell because booking services generally lump everything together into one big, vague “Taxes & Fees” category.

What Can You Do About This?

Not much. Taxes are taxes and no one gets out of paying taxes ;-). However you can be an educated consumer and before you book, start Googling! Be pro-active and read the fine print and/or email/call to find out if the rate you see online is what you’ll actually pay or if there’ll be taxes added on, either when you pay online or when (SURPRISE!) you get to the hotel. Go to the hotel’s website and see what their price is in comparison to what your booking agent quoted you. Find out what the hotel taxes are for the state/city/county your hotel is in (i.e. Google CHICAGO HOTEL TAXES). You’ll still have to pay, but at least you won’t be surprised. And nope, even if you live in another country, you’re not exempt from paying taxes on your hotel room. If you’re cheeky enough to ask and the hotel worker knocks off a percentage, it’s not because you live outside of the United States – they’re just being nice.


Resort fees are not the same as taxes. A resort fee, also called a facility fee, a destination fee, an amenity fee or a resort charge, is a separate mandatory fee that a guest is charged by an accommodation provided, along with a base room rate and its tax. Most resort fees are taxed.

Resort fees are illegal in many countries. In other countries, including the United States, there’s no specific legislation that either allows or outlaws resort fees, nor how much they can be, so resorts and freestanding hotels have taken to charging them as a way to increase how much money they get for a room. The average resort fee is about $25 per day but can vary greatly from location to location and the resort fee can actually COST MORE THAT THE HOTEL RATE! (You might find an online sale rate of $49 per night and then pay $100 per night resort fee. Because some places suck.)

There doesn’t appear to be rhyme or reason for who charges resort fees. Some hotels in a given chain will and some won’t. The Disney-owned hotels in Walt Disney World (WDW) do not (although, based on a survey that went out to WDW guests a while back, apparently they were toying with the idea at some point) but the WDW Swan and Dolphin, which are on Disney property but are owned and run by Marriott, do. Yet there are other Marriott hotels that don’t charge a resort fee.

So How Did Resort Fees Start?

For years, hotels have charged guests for individual amenities at a hotel, such as for use of facilities like the gym or pool, daily newspaper delivery, etc. But they were only charged to those who wanted such extras. In the mid-late 1990s, some resort hotels began to charge mandatory fees, regardless of which facilities were actually used by the guests. This allowed the hotel to advertise a cheaper room rate because they made up the difference from the mandatory fee, so they made more money in the end.

Online hotel search and booking tools take a percentage of reservation prices and then pass the reservation on to the hotel. Therefore, a hotel loses a certain percentage from every reservation made on one of the sites. Hotels that are listed on these hotel search and booking sites don’t include their resort fee in those prices, which means the booking site doesn’t get a percentage of the resort fee.  So when the hotel collects the resort fee at check-in, separately from the rate purchased online, the hotel collects 100% of that profit.

Resort fees also affect U.S. travel agents because they (the fees, not the travel agents, LOL) can change at a hotel’s whim. Travel agents can earn commission on the advertised rate of the hotel and don’t collect a percentage of taxes or fees. Travel agencies must also legally know what the resort fee for each hotel is so they can pass that information on to their clients (failure to do so could result in a lawsuit to their agency). Unfortunately, individual travel agents have found it difficult to keep up with changing hotel resort fees.

And on top of all of this, the hotel charges you tax on the resort fee!!!

Do All Hotels Charge Resort Fees?

Thankfully, no.  However more and more places are adding them to their hotel fees every year and, of course, it’s happening moreso in the larger, more touristy, conventiony and business-related areas. In New York City, for example, only 15 hotels charged resort fees in 2016, but in 2017, over 40 of them did, in 2018, that number had increased to 85 and it’s just grown even more from there. Here are some of the worst cities and some ideas of what they charge. These are just examples – keep in mind that just because your hotel isn’t listed doesn’t mean it doesn’t charge resort fees (links are from a website that gives good background info about resort fees in general, in case you want more info):

Las Vegas
New York City (the list is about halfway down the page)
North Carolina
San Francisco
Washington D.C.

What can you do about this?

A little bit. Hotels have made resort fees mandatory (which is not to say you can’t try to argue to have them take the fees off your bill). However you can be an educated consumer and before you book, start Googling! Find out of your hotel of choice charges resort fees (i.e. Google RESORT FEES “THE NAME AND CITY OF YOUR HOTEL”) and if they do and that bothers you, stay somewhere else that doesn’t charge one (and let them know you’re not staying there BECAUSE they charge a resort fee!). Be pro-active and read the fine print and/or email/call to find out if the rate you see online is what you’ll actually pay or if there’ll be resort fees added on, either when you pay online or when (SURPRISE!) you get to the hotel (you’ll still have to pay, but at least you won’t be surprised).


Many hotels request that you leave a deposit, either in cash or with a credit card, to cover incidental charges to your room. The policy ensures that if a customer leaves without paying for room service, phone calls, pay-per-view movies or mini-bar items, or if (s)he ruins any of the hotel’s property, the hotel will be covered, at least in part. The amount will vary per hotel (figure between $50 and $200 per day) and might be different if you’re paying by credit card, debit card or cash. The good thing about this deposit is that as long as you don’t wreck anything and/or don’t skip town without paying your bill, you should get the deposit back (credited onto your card, or a return of your cash) when you check out.

What can you do about this?

Hotel4Not much. Hotels have been burned by people who have left the hotel with the contents of their minibar, or who have done something on the carpet so horrendous that it needed to be professionally cleaned or even replaced. So the deposit is to protect themselves from losing too much money on guests who are thoughtless or dishonest.  And again, as long as you’re a good customer, you’ll get your deposit back anyway. However you can be an educated consumer and before you book, start Googling! Find out of your hotel of choice charges a deposit for incidentals and if so, how much. That way you’ll know ahead of time and won’t be surprised.


Staying at hotels is more expensive than ever, and taxes, fees and deposits certainly don’t help. You may not be able to avoid them, but if you do your homework, at least you’ll know what’s coming and how much it’ll be, so you won’t have any unfortunate surprises in your travels.

Feature Photo: Patrick Pelletier/Wikimedia

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This post first appeared on Your Mileage May Vary


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[…] Understanding hotel taxes, resort fees & deposits for incidentals when you rent a hotel room in the United States. […]

Sean Odonnell January 16, 2019 - 9:21 pm

In New York I recently stayed at the Pennsylvania hotel and they charged me 102% of the hotel rate as “taxes”. While on their website it stated twice that resort fees where included in the price shown. Thanks for the break down in New York taxes as I believe I was totally ripped off and taken advantage off due to not having the proper information.
I will be reporting this as fraud to the authorities.
Thank you

SharonKurheg January 16, 2019 - 9:22 pm

Wow, I’m so sorry to hear about that! Good luck!

Dan March 10, 2020 - 9:41 pm

The bed and breakfast I am staying at added “State of Illinois/City of Chicago Taxes and Fees (20.93%)” not only to the room nights, but also to both the incidental/damages hold and the credit card surcharge. Is that part of the deal?

SharonKurheg March 10, 2020 - 9:50 pm

The rules would vary from state to state so I’m afraid I don’t know. Sorry.


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