Duff on Hospitality Law

It seems fitting that my first post of 2014 would come from the year's first major industry conference - the Americas Lodging Investment Summit (ALIS) held each January in Los Angeles. As expected, this year's Summit set near record attendance (nearly 2,600 registered attendees) and its attendees were brimming with confidence.

I’m pleased to introduce another guest author from local accounting firm Clark Nuber. Julie Eisenhauer is an audit and accounting principal specializing in the hospitality industry. We're grateful that Julie has offered to share her experience and knowledge with our readers. Welcome, Julie, and thank you for today’s post on this important revenue ruling. – Greg

In a letter sent to major hotel chains, FCC Commissioner Ajit Pai urged hotels to program their telephones to be able to dial 911 without first dialing 9. The motivation behind this initiative is the death of Kari Hunt Dunn, who was stabbed to death at the Baymont Inn in Marshall, Texas this past December, while her daughter unsuccessfully attempted to dial 911 for help. The Baymont Inn’s phone system required all guests to dial 9 before dialing 911. As a result, the daughter was unable to reach emergency services.

By now, most hoteliers and restaurateurs know that all employers are required to prepare and maintain the Form I-9 for all of their employees. But did you realize that those forms can be a basis for financial liability if they were improperly prepared? This post will identify your risks and strategies to reduce a fine if you are ever audited by the government.

Some employees in SeaTac, Washington will ring in the new year with a minimum wage increase to $15 dollars an hour, and other benefits including paid sick and safe leave. The new law takes effect on January 1, 2014. Following a judge’s recent ruling, the changes will not apply to employees within the Seattle-Tacoma International Airport. If, however, you’re in the hospitality and/or transportation industry operating outside of the airport, and satisfy certain size requirements (for instance, hotels are generally covered if they include 100 or more guest rooms AND are staffed by 30 or more workers), you need to prepare for changes under the new law.

More information to come. You can contact Greg Duff with any questions.

New York State Attorney General, Eric Schneiderman, has made waves in recent months by subpoenaing the popular “apartment-sharing” website AirBNB for information on more than 15,000 of the website’s hosts in New York City. The subpoenas were issued as part of Schneiderman’s campaign to enforce a 2010 New York law that took effect last year, clamping down on “illegal hotels” across the state. With the backing of tech trade groups and civil liberties organizations, AirBNB has now mounted a high-profile defense against these subpoenas. Meanwhile, other destination cities around the globe are taking steps to follow New York’s lead.

For those of you who attended, or even those of you who did not attend, below are the slides from today's sales presentation in Portland. Feel free to contact me if you have any questions.

For those readers and followers unable to attend last month’s AHIA Fall Meeting in Los Angeles, we have posted below our PowerPoint presentation, “On-Line Distribution: Overview, Issues and Tips.” A huge thanks to AHIA for hosting us last month. 

If you have any questions regarding the presentation or distribution generally, please let Ruth or me know.

Hunting for a top-rated hotel or searching for the perfect dim sum restaurant? Chances are you will turn to sites such as Yelp, Citysearch or TripAdvisor to guide you through the mass of options most locations have to offer. As the Huffington Post recently noted, “In an increasingly tech-reliant world, most of us do not step foot in a restaurant or buy anything online without doing at least a modicum of Internet research.”

Hoteliers and restaurateurs have long known that positive online reviews equal greater occupancy rates, increased bookings, and greater revenue for their businesses: An influential 2011 Harvard Business School (HBS) study found that “a one-star rating increase on Yelp translated to an increase of 5% to 9% in revenue” for restaurants, while researchers at Cornell found that a one-star swing in a hotel's online ratings on travel sites equate to a 11% sway in room rates.

So how trust-worthy are those 4-star online reviews? Turns out, unsurprisingly, caveat emptor.

A 2013 HBS report estimates that the number of fraudulent reviews on Yelp rose from 5% in 2006 to 20% in 2013.

I'm pleased to introduce guest author Katie Nguyen, a CPA from local accounting firm, Clark Nuber. Katie specializes in state and local taxes for the hospitality industry and has offered to share her experience and knowledge with the Duff on Hospitality readers. Welcome, Katie, and thank you for today's post on some important tax incentives available to Washington's owners and operators. - Greg 

I’d imagine that every hotel and restaurant owner/operator is interested to know how to save money on his or her state taxes (while still following all of the applicable laws and rules, of course). As a former Washington Department of Revenue auditor, I've seen many exemptions, credits, and preferential tax rates go unused – primarily because businesses just didn't know that they existed! This post provides a brief explanation of some Washington tax incentives (both old and new) that the hotel and restaurant industry should be taking full advantage of.

Sales/Use Tax Exemption for Items Imparting Flavor or Supporting Food

The Washington legislature recently enacted a measure providing a retail sales and use tax exemption on purchases by restaurants of the following two types of items:

• • Items used to impart flavor to foods that are completely or substantially consumed by combustion during the cooking process. Such items could include charcoal, charcoal briquettes, wood chips, grape vines, and the like.
  • Items comprised entirely of wood that support the food during the cooking process. Such items could include wood planks, etc.

This exemption expires July 1, 2017.

Commute Trip Reduction Credit

Also recently passed by the state legislation was a bill extending the life of the Commute Trip Reduction B&O tax credit. This credit is a great incentive for those taxpayers who help subsidize the cost of employee public transportation, carpooling, or non-motorized commuting. For each employee, the credit is capped at $60 or 50% of the transportation cost paid (whichever is lower) annually. Be sure to submit your application to the Department of Revenue by January 31, 2014 to get your 2013 credit!