City taxes are used to charge guests for any local fees and taxes, like the Resort tax for example. They are added to the price specified by the rate. If your price per night includes those local fees, you do not need this specific function. However, if it doesn't, you should set the city taxes and then select them in your rate plans. Then the system will automatically post the amounts you have specified.
City taxes differ from actual taxes. The former are posted as charges on guests' folios and then these charges also appear in revenue reports. City taxes are not calculated as a percentage of the respective room rates, but are added as absolute amounts to these room rates. The city taxes themselves can be taxed. In contrast to them, actual taxes are calculated as a percentage of the respective charges.
Set the city taxes
- Go to 'Other' - 'Settings' - 'City tax'
- If some of the nights are exempt from this tax, specify how many in the 'Skip nights' field.
- Sometimes you only pay local taxes up to a certain number of nights. If this is the case, specify how many nights at most are charged in the 'Max nights' field. Nights above this number will not be subject to City Tax.
- Text - specify the name of the charge representing the tax
- Revenue category - it will list the values for the 'City Tax' Revenue group, if any.
- Select the currency of the tax.
- If this local tax is subject to some other tax, specify its rate in the 'Tax%' field.
- Tax Code - If the Tax requires separate reporting you can use the Tax Code field. This will add an additional column in your tax report as well as an additional row in the tax table of the Folios.
- Print text - This is the text that will be shown on the Folios of the guests. If empty, the value from field "Text" will be used
- Hide on the posting screen - the city tax charge will not be available to be added manually to the folios.
Then set the amount of the city tax payable in 'Tax seasons'.
Select the starting date of the season. If your tax does not change with the season, just define one season and it will apply for the whole year. The amount of the city tax can be a fixed amount per night or per person, a percentage (usually of the night price), or a combination of both. All examples are for the "Extra, separate charge" city tax option.
For fixed price per night, enter the amount in 'Price night':
The city tax is a fixed amount per adult and per child:
The city tax is a percentage of the night price:
Complex city tax:
Max City Tax Limit
If you have a City Tax that is a percentage of the nights and it is greater than a certain amount, you can use the new fields to set their maximum values. The system will determine the maximum City Tax amount by multiplying the number of adults and children in the booking by the set maximum values. If the calculated tax is greater than the limit, the limit value is taken. It is necessary to fill in both fields to use this functionality.
Check out how the City Tax is applied in a booking and the different City tax modes: Booking - Rate and City Tax