City hotel tax paid in "cash only"

Who knows? It is Italy. Some will assume it is an under-the-table tax scam. Maybe they do not want to pay the extra credit card fee for collecting the tax. For me, it is the cost of travel, so I don't worry too much about it. Since we nearly always pay in cash, it is not a concern of ours. If that is the practice, then that is the practice.

With that kind of response, this whole forum is pointless... I'm just asking a simple question. It's not a big deal, just a curiosity.

Actually thought it was a pretty good response or else I would not have taking the time to response to question that doesn't have a definite answer.

"Maybe they do not want to pay the extra credit card fee for collecting the tax"

I would bet on Frank's answer here, due to the cc processing fees, kind of adds insult to injury in the merchants mind, imho. Not sure how his answer makes the Forum pointless, though. You're just asking a question, he just gave an answer.

Stephen - Had you already prepaid the hotels with a credit card prior to having to pay the city hotel tax? That is, was the city hotel tax the only thing you were paying at that time? Or was it part of your larger bill?

P.S. Not sure why one response you didn't like renders a whole forum "pointless." Frank wasn't working the desk when you needed to pay your city hotel tax. He was making what's called an educated guess, based on his extensive travel experience, and doing it in his free time too. He didn't claim infallibility, just offered his reasoned opinion for the answer to your question. I suppose if you really want to know "why cash only," the only persons who can answer that were those persons who told you "cash only" at the desks of the hotels you were checking out of.

It is probably the credit card fee that the owners do not want to absorb - small for each transaction, but very expensive for the sum total of every transaction.

".......... so I had to go out and buy something to break my $20." I am hoping the OP really meant a 20 euro note, and not U.S dollars.

Yeh, at 3%, and say the tax was 15 euro, so the hotelier gets 14.55 euro from the credit card company (8 to 10 days later), meanwhile he has to pay the city 15 euro exactly. Italians don't like paying taxes any more than anyone else, so he doesn't want to kick in the other 45 cents out of his own pocket.

My apartment rentals in Italy are also asking for this tax in cash as a per person/per night fee. I have my envelopes all ready with the amount specified for each place. Since they all quoted the same price it sounded legit to me. No surprises from my hosts, I like that.

99% of places I have stayed in wanted cash only. Not just the room rate, but the taxes, too. To me, that is just the Italian way! Never bothered me.

City Taxes are normal. Would you allow people renting your house to pay the "city tax" of $10 via a Credit Card thereby leaving you with maybe $9.25 even though you must pay the full $10 to your local government entity? Of course not. And yes, "It's Italy" is a good answer for many questions concerning Italy.

We pay Venice City Tax every year in cash.

Just because somebody gives you an honest answer is no reason to take his head off, IMHO.

Italy is pretty much a cash society, and I have always paid my city tax in cash.

If you don't like the answers here, the only way to really know is to ask the person who wanted it, "Why?".

We can only answer based on our experiences, and you were a lot closer to the request than we were.

This was a practice instituted last year, I believe. Both last year and this, whether we pay the tax in cash or by invoice for our tour groups (for instance) varies according to the hotel. I believe it was Roberto who provided a more detailed explanation on a previous forum thread, clarifying that the tax need not be paid in cash, but some hoteliers are still unclear or worried about implications for them. Credit card fees could certainly also be part of it. The answer to the question "why" need not be logical; sometimes the answer is just "because."

I just returned from Sicily last week and in every hotel where I stayed, they said the same thing. I paid for the room separately with a credit card and they asked for the tax to be in cash only. They gave me a receipt for both (everywhere I went, a receipt was given, even for a bottle of water or espresso at a bar - this is what Greece should be doing). One thing that rubbed me the wrong way was that on booking.com, the "total price" for the hotel stay was supposed to include the City tax, so when the hotel host asked for it above and beyond booking.com's total price, I was quite annoyed. I am asking for a refund from booking.com for false advertising (they should have said that the total price does not include the City tax, which would be paid in cash upon departure). I don't understand either how or why hotels are collecting piles of cash worth of taxes - are they really going to give that (EDIT: meaning the cash) to the authorities?

Agnes,
"I don't understand either how or why hotels are collecting piles of cash worth of taxes - are they really going to give that to the authorities?". I don't understand your statement. They are collecting taxes because they have a legal obligation to do so. The normal taxes on a hotel bill (VAT) is collected by the national tax authorities. Hotel tax is a local tax per room per night and is passed on to the municipality. They give you a receipt, so why do you think they are not passing the money on?
As other posts have said, collecting it in cash is the only way to insure they are not paying part of the tax themselves.

Sorry Chris, let me clarify - I'm just used to doing everything electronically despite growing up in Eastern Europe. I do realize they need to collect the taxes but just find it odd that they can't accept them rolled up in the credit card transaction. The VAT taxes are rolled up in that hotel bill (paid by credit card at hotels that accept them), so why not local taxes? Hotels can simply charge a markup in the total room price to account for the credit card fees they pay.

I forget that businesses deposit real (hard cash) in banks (I haven't been to a bank in years). I know I'm dreaming (and this is not a comment on Italy), but I would love to see a cash-free world one day - collecting cash, giving change, etc. seems like a nuisance to me. This is in line with the OPs comment - he wasn't expecting to have to run out and get the correct change when checking out. If hotels are collecting all this cash from everyone, why can't they give change assuming someone does not give them a large bill?

Agnes, it is possible, just possible, because it happens from time to time, that an establishment really does run out of small bank notes and is unable to make change. Not everything is sinister.

It has happened to me also in Austria. Basically, if you pay with a credit card the hotel has to pay commissions. When we are dealing with the base room rate, it is up to the hotel to set it and hopefully they will take into account credit card commissions. But when the city tax is charged, at a rate set by the city administration and surcharges are not possible, they would have to pay commissions out of their pocket; this is why they ask for it to be paid in cash.

In part is fear that the amount would be subject to VAT. That is why it is charged separately.
VAT does not exist in America. My professional field is accounting and I wanted to spare you the pain of explaining technically how the VAT accounting treatment works, but here you are. So basically VAT received from the sale of a product or service is a debt toward to tax authorities that is incurred by the merchant or hotelier. A VAT paid by a merchant for the purchase of a good or service is instead a credit that the merchant has toward the tax man. The net difference: VAT on sales (debt) - VAT on purchases (credit) is the VAT on the value added (hence the name) by the merchant, which the merchant gives the tax authorities quarterly.
If the VAT were applied on the city tax amount, the merchant (hotelier) would see his debt toward the government increase even though this VAT is not on a product or service he sold, but on a local tax he is collecting on behalf of the city. He obviously doesn't want that so he prefers to issue a separate receipt and keep separate book for it. He also wants it paid in cash because he has to give that full tax amount to the city, not that amount minus the commission paid to the credit card company.

I was told it had nothing to do with credit cards, even if you prepay the hotels in Italy you need to pay the hotel tax. Yes, only in cash too. Booked hotels thru costco and the same "rule " applied. Was in Florence, Venice and Rome in Aug. same deal and I booked them directly myself.

I feel the need to put in a comment in support of the OP. The answer that took him back included:
'For me, it is the cost of travel, so I don't worry too much about it. Since we nearly always pay in cash, it is not a concern of ours. If that is the practice, then that is the practice.' To me, this comes across somewhat as 'that's a silly question - it doesn't concern me, so why are you concerned / bothering us with a silly question like that?'. I'm sure that isn't what the responder was intending, but I do feel it came across that way. And I think as responders we should go out of our way to make sure our responses don't leave the OP with the feeling that their question was silly or bothersome. Just my two cents worth in the interest of being welcoming to posters. Enjoy your trip!

Laura, it's a tax that had been in effect since at least 2012 in some regions, and some municipalities structure it differently than others (some charge for a specific number of nights, additional nights have no city tax.

Agnes, the reason booking.com and other services don't include it might be that not all municipalities charge it. False advertising would be a statement on their website saying "There is no city tax".

@Zoe - False advertising by booking.com was a statement on my hotel reservation that a 2 Euro per person per night city tax was included in the total amount, and in reality it wasn't (it was collected separately). Whether I should have believed booking.com or not (it's been a while since I've paid these so I wasn't sure if it passed the "laugh test"), that was a clear misrepresentation on their part. On some hotels, they noted it would have to be paid separately but not the one I booked. I don't know if it was an innocent error or if they were low-balling the total cost of the lodging, which turned out higher than I thought. Whatever the case, a contract is a contract and they owe me the difference.

@Bob - Ditto. That's how I took it as well.

@Roberto - Thank you for that lucid explanation, much appreciated!

Agnes: got it now, sorry.

stephen,

I've been in Italy the past couple of weeks, and have encountered that situation several times when checking out of hotels. Paying a few Euro in cash is really not a big deal, as I usually have some small bills and coins on hand. I've never heard of them needing exact change. When I paid the bill at the hotel in Padova this morning, the clerk just made change of a €20, and I was on my way.

From Agnes “...everywhere I went, a receipt was given, even for a bottle of water or espresso at a bar…” If there is one entity Italian business people fear the most, it's the Guardia di Finanza (a.k.a. Tax Police). I've seen them stop patrons leaving restaurants and demand to see their receipts. The sight of their little powder-blue cars prowling around sends a shiver down the backs of business owners...

Thanks, Zoe. To tell the truth, the cash-only feature of the tax payment was new in my mind because I mostly traveled in other countries the couple of years previous. I guess it was me who was "new."

Of course, Italian merchants who don't have a moderate amount of change on hand is a pet peeve going back 20 years. It's really not been a problem for me in other parts of Europe.

Will be in Italy soon and was not aware of this. Looking closely at one of my reservations I see the following:

"Room rate excludes the following:
City Tax: EUR 1.50 Per Person / Per Night"

Wasn't sure what that meant, now I know I must pay that separately in cash.