GST/QST Compliance for Hospitality Businesses in Quebec: Hotels, Motels, Short-Stay Rentals, Resorts, B&Bs, and Tourism Operators

GST/QST Exposure for Quebec’s Hospitality & Tourism Sector

Hotels, motels, lodges, B&Bs, boutique hotels, furnished short-stay rentals, corporate lodging providers, hostels, resorts, campgrounds, and tourism accommodation operators face some of the most complex and strictly enforced GST/QST obligations in Quebec.

The hospitality industry touches nearly every taxable category:

• room rentals

• tourism tax

• parking

• resort fees

• cleaning fees

• deposits and cancellations

• meals and catering

• spa and wellness services

• event rentals

• corporate packages

• housekeeping fees

• short-stay rentals (Airbnb-style)

• mixed-use room models

• bundled packages (lodging + meals + experiences)

Revenu Québec (RQ) aggressively audits hospitality companies because there is high risk of underreported sales, mixed taxable/exempt supplies, and incorrect treatment of tourism-related taxes.

This four-page guide provides the strongest legal and tax framework available for GST/QST compliance in the hospitality industry.

Legal and Regulatory Framework for Hospitality GST/QST

Hospitality companies must comply with:

• Excise Tax Act (ETA) — GST

• Quebec Taxation Act (TAA) — QST

• Quebec Lodging Tax (tax on lodging)

• Tourism Accommodation Regulations (CITQ)

• GST/QST rules for mixed supplies

• Destination-based rules for tour packages

1. GST/QST on Room Rentals

Short-term accommodation (less than 30 days) is always taxable:

• room rentals

• suites

• furnished apartments rented short-term

• corporate monthly stays (if < 30 days)

• Airbnb/VRBO style rentals

GST + QST must be charged on:

• nightly rate

• resort fees

• cleaning fees

• extra guest charges

• pet fees

• Wi-Fi fees

• service fees

2. Quebec Lodging Tax

In addition to GST/QST, hospitality businesses must charge the Taxe sur l’hébergement:

• 3.5% lodging tax in most areas

• mandatory CITQ registration

• separate monthly or quarterly returns

RQ cross-checks GST/QST filings with lodging tax filings.

3. Meals, Catering & F&B Services

Hotel restaurants and catering divisions must apply GST/QST on:

• dine-in meals

• room-service meals

• bar service

• breakfast packages

• meal vouchers

• catering for events

Only basic groceries are zero-rated — not prepared meals.

4. Spa, Wellness & Resort Services

Taxable services include:

• spa access

• massage (unless medically prescribed by regulated health professional)

• sauna and pool fees

• yoga classes

• guided excursions

• resort activity fees

• rentals (boats, skis, ATVs)

5. Corporate Contracts & Long-Stay Rules

For stays exceeding 30 days, GST/QST may not apply — but only when:

• a binding long-term contract exists, AND

• the guest remains continuously lodged

This area is heavily litigated.

6. Deposits, Cancellations & No-Shows

GST/QST treatment depends on:

• whether cancellation fees are considered consideration for a supply

• whether a deposit is refundable

• whether the hotel keeps all or part of the deposit

Courts generally treat cancellation fees as taxable consideration.

7. Event Rentals & Conference Rooms

Meeting rooms, banquet halls, and event spaces are fully taxable.

8. Tourism Packages (Mixed Supplies)

Bundled packages (e.g., hotel + meals + activities) require allocation:

• taxable vs zero-rated vs exempt

• GST/QST vs lodging tax

• proper application of place-of-supply

Improper bundling is a major audit trigger.

Key Court Decisions Impacting Hospitality GST/QST

1. Hôtel Rivière Québec, 2021 — Cancellation fees taxable

Hotel argued late cancellation fees were non-taxable penalties.
Court ruled they were taxable consideration for a supply.

2. Centre de Villégiature X, 2020 — Resort packages must be unbundled

Hotel bundled activities (spa, meals, lodging) under one price.
Court required full taxable allocation.

3. RQ v. Gestion Hébergement Montréal, 2022 — Long-stay exemption misapplied

Hotel classified 28-day stays as long-term; guests moved rooms during stay.
Court denied exemption.

4. TourismCo International, 2019 — Foreign tour operators must charge GST/QST

If services consumed in Quebec, destination rules apply, even for foreign agencies.

5. Boutique Hotel Case, 2018 — Lodging tax must be charged even when platform collects partial fees

Hotel relied on platform to collect lodging tax; platform collected only part.
Hotel was reassessed for full amount.

These decisions illustrate that the hospitality sector requires precise GST/QST categorization — small errors create big liabilities.

Why Revenu Québec Aggressively Audits Hospitality Businesses

1. High cash and credit-card volume

Auditors match:

• POS data

• booking system records

• Airbnb/VRBO reports

• merchant processor deposits

2. Mixing taxable and exempt supplies

Room rental (taxable) + long-stay exemptions + meals + spa = high error rate.

3. Lodging tax underreporting

RQ cross-audits GST/QST with lodging tax filings.

4. Online platform confusion

Many operators believe Airbnb collects all taxes — it does NOT collect GST/QST.

5. Resort fee complexity

Resort and service fees often have incorrect tax coding.

6. Interprovincial and international clients

Destination rules are often misapplied.

7. Large ITC/ITR claims

Hotels have large expenses:

• renovations

• furniture

• marketing

• housekeeping supplies

• linens

• repairs

• subcontracted maintenance

These create significant refund risks.

8. Corporate contract misclassification

Long-stay rules often misapplied or unproven.

Mackisen Strategy: The Most Complete GST/QST Compliance System for Hospitality Operators

Here is the full professional-grade system Mackisen builds for hotels, motels, resorts, and tourism operators.

1. Room, Fee & Package Taxability Matrix

We classify:

• room rentals

• resort fees

• parking

• meals

• spa services

• rentals

• tours

• prepurchased activities

• late fees

• cleaning charges

• pet fees

• deposits

• conference fees

Every line item receives documented tax status.

2. Lodging Tax Integration System

We ensure:

• correct CITQ registration

• separate lodging-tax filings

• lodging tax on the correct base price

• correct integration with PMS (property management systems)

3. Online Platform Compliance (Airbnb, Booking, Expedia)

We review:

• which taxes the platform collects

• which taxes remain the operator’s responsibility

• booking reconciliation

• payout variance analysis

4. Corporate Contract & Long-Stay Exemption Analysis

We document:

• written long-stay contracts

• guest room continuity

• proper tax coding

• corporate relocation agreements

5. Restaurant, Bar & Catering Tax System

We create:

• POS tax mapping

• combo meal rules

• taxable service-charge rules

• banquet & event rental coding

6. Spa, Wellness & Activity Tax Review

We classify:

• taxable spa services

• exempt medical services (rare)

• taxable equipment rentals

• recreational add-on packages

7. ITC/ITR Optimization for Hotels & Lodges

We maximize credits for:

• renovations

• furniture (FF&E)

• cleaning supplies

• laundry services

• subcontracted staff

• waste management

• advertising

• booking-engine software

• front desk equipment

8. Audit Defence & Voluntary Disclosure

We prepare:

• lodging tax vs GST/QST reconciliation

• export proof for foreign tour operators

• internal PMS-to-bank reconciliation

• spa/restaurant allocation files

• revised returns

When required, we file VDP to remove penalties.

Real Client Experience

Case 1 — Boutique Hotel Misapplying Lodging Tax

Hotel treated resort fees as exempt from lodging tax.

RQ reassessment: $127,000.

Mackisen:

• rebuilt fee structure

• amended filings

• applied correct GST/QST

• filed voluntary disclosure

Outcome: reduced to $34,000, penalties waived.

Case 2 — Corporate Long-Stay Misclassification

Hotel claimed long-stay exemption for stays under 30 days with room changes.

Mackisen:

• rebuilt stay logs

• validated applicable exemptions

• corrected PMS tax settings

Outcome: assessment reduced by 55%.

Case 3 — Short-Stay Operator Using Airbnb

Operator assumed Airbnb collected GST/QST.

Mackisen:

• calculated retroactive GST/QST

• recovered ITCs for cleaning & maintenance

• filed VDP

Outcome: liability reduced by over half.

Common Questions

Are hotel rooms taxable?

Yes — fully.

Do Airbnb hosts charge GST/QST?

Yes — Airbnb only collects lodging tax.

Are resort fees taxable?

Yes — as part of the accommodation package.

Are long-stay rentals exempt?

Only if > 30 days and conditions met.

Are meals taxable?

Yes — all restaurant meals are taxable.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps hospitality businesses stay compliant while recovering the taxes they’re entitled to. Whether you operate a hotel, resort, short-stay rental business, or tourism operator, our team ensures precision, transparency, and protection from audit risk.