Making every dollar count through state lodging tax exemptions

WASHINGTON - The Air Force encourages you to stop paying taxes. Well, not your personal taxes, but it turns out that several states exempt uniformed service members and federal government employees from paying state lodging taxes when on official travel orders.

Unfortunately, travelers have to know to ask for these exemptions, and as a result Air Force members pay about $4.5 million in lodging taxes needlessly in these locations each year. If you are traveling to Florida, Texas, New York, Pennsylvania, Massachusetts, Missouri, or one of seven other states and territories that offer these exemptions, a few simple steps can save your unit and the Air Force real money.

Considering today’s fiscal challenges coupled with tomorrow’s uncertainties, the Air Force is continuously searching for cost-saving initiatives. In a memo to comptrollers across the Air Force, Assistant Secretary for Financial Management Jamie Morin said, “The vice chief of staff has taken a key step forward with the ‘Every Dollar Counts’ campaign and we have received a huge response from Airmen around the world. One idea that caught my attention pertains to state lodging tax exemptions, which could save millions for reinvestment in mission needs.”

Eleven states, plus Puerto Rico and the U.S. Virgin Islands, exempt U.S. military members and employees of the U.S. government from paying state taxes on hotel lodging charges which are directly reimbursable by the government. This lodging sales tax exemption applies to both TDY and PCS travel paid using the Government Travel Card. (All government travelers are already exempt from lodging tax if their lodging bill is paid directly by the government using a centrally billed account.)

Government Services Administration (GSA) maintains a website and map with state tax information at this URL: https://smartpay.gsa.gov/about-gsa-smartpay/tax-information/state-response-letter. Some states require a form and some do not. Puerto Rico and six states (Fla., Mass., N.Y., Pa., Texas and Wis.) do require a form and can be downloaded from this GSA website. The U.S. Virgin Islands and the other five states (Ark., Del., Kan., Mo. and Ore.) do not require any special forms.

All travelers should take advantage of this tax savings and be aware of these state laws. If you are about to go on official travel to one of these locations, you should visit the GSA website before traveling and obtain the tax exemption form, if applicable. All travelers should check with their hotel to verify state tax law compliance. If the hotel does not comply, the traveler should consider another hotel. Approving officials should review travel authorizations and vouchers for strict compliance with this requirement.