Arizona Ritz Owes Tax on Marriott Rewards Stays, Court Affirms

The Ritz-Carlton Dove Mountain failed to convince an Arizona appeals court that it’s entitled to a refund for transaction privilege taxes paid on reimbursements it received through the Marriott Rewards Program.

The money Marriott pays the hotel when members redeem free stays is gross income and no deduction applies, the Arizona Court of Appeals, Division One, ruled Thursday in a 2-1 opinion.

All Marriott-branded hotels pay a percentage of their room revenue to cover the the costs of the rewards program. Dove Mountain pays in 4.5% of each hotel stay, and receives full reimbursement when a member redeems points ...