Aug 28

Seems like a way to increase revenue a bit but there is one big gotcha to be aware of.  In WI if parking is charged separately or an additional charge then you must collect and pay sales tax on it.

A couple of years ago the Wisconsin Department of Revenue went around checking for owners who were charging extra for tenants to park or offering a lower rate to those who did not want parking.   The landlords involved had to pay sales tax that they should have collected plus interest and penalties.

See the WI Administrative Code Revenue  §11.48 (1) (b) (text below):

Tax 11.48 Landlords, hotels and motels. (1) LANDLORDS.

(b) The sales price from providing parking space for motor vehicles and aircraft and from providing docking and storage space for boats are taxable. If a separate charge is made for the parking, docking, or storage space, the charge is taxable. However, if a separate charge is not made and the price of a rental unit includes a charge for a
parking, docking, or storage space, and if similar units are rented at a reduced price if the parking, docking, or storage space is not utilized, the difference between the rental price of the 2 similar units is taxable as a charge for parking, docking, or storage.

One Response to “Can/Should I charge extra for parking?”

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