Broad luxury tax definition of hotel brings club cottages and rooms within tax net without proof of business activity.

A luxury tax statute was construed broadly to cover cottages and rooms attached to a club where the charging provisions expressly taxed club-related accommodation and allied charges. The wide statutory meaning of "hotel", together with the inclusion of guest houses and places of like nature, showed that conventional hotel business activity was not the controlling test. On that construction, accommodation provided by a club in cottages and rooms for residence fell within the taxable description, and separate proof that the letting activity was carried on as a business was not required. Luxury tax was therefore payable on the rent and other charges collected.

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Issues: Whether cottages and rooms attached to a club answer the description of a hotel so as to attract luxury tax on rent and other charges collected from guests, and whether proof that the letting activity was carried on as a business was necessary for levy.

Analysis: The definition of hotel under the Act was construed broadly, and the charging provisions expressly brought clubs within the tax net both for membership fee and for rent collected from facilities attached to clubs. The Act also covered accommodation and allied amenities in hotels and in places of like nature, and the inclusion of guest houses within the definition showed that business activity was not the controlling test. On that construction, accommodation provided by clubs in cottages and rooms for residence was held to fall within the statutory description attracting luxury tax, even if the club did not carry on a conventional hotel business or derive profit in the ordinary commercial sense.

Conclusion: Luxury tax was payable on the rent and other charges collected for cottages and rooms attached to the club, and no separate proof of business activity was required.

Ratio Decidendi: Where the charging and definition provisions of a luxury tax statute use a wide statutory meaning of hotel and expressly tax club-related accommodation, rooms and cottages let out by a club are taxable notwithstanding the absence of conventional hotel business activity.

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