Question

Periodically, perhaps quarterly, hotels settle their debt (created by collecting sales and room taxes from guests) with local or state governments.

A) True
B) False

Answer 1

Hotels contribute to local or state governments' revenue through property taxes, but debt settlement with governments does not occur quarterly or periodically.

Step-by-step explanation:

Municipal governments in the U.S. usually collect property taxes (and, in some cities, sales taxes) to raise revenue. Property taxes are based on the value of real estate held by an individual or corporation. Hotels, like any other property, are subject to property taxes. Therefore, hotels do contribute to the local or state governments' revenue through property taxes.

However, the question specifically mentions debt settlement and the collection of sales and room taxes. While hotels do collect sales and room taxes from guests, it is not accurate to say that the debt settlement occurs quarterly or periodically. Debt settlement typically occurs when the tax payments are due, which varies depending on local or state regulations.