How does Sonesta Simply Suites present revenue with respect to sales taxes and other similar taxes?

According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, the company has elected to present revenue net of sales taxes and other similar taxes. This means that when Sonesta Simply Suites reports its revenue, it does not include the amounts collected for sales taxes and other similar taxes. These taxes are collected from customers on behalf of governmental agencies, and Sonesta Simply Suites has a legal obligation to remit these funds to the appropriate authorities.

Sonesta Simply Suites acts as a collection agent for these taxes, meaning it is responsible for collecting the taxes from customers and then passing them on to the government. Since the company does not retain these taxes, they are not included in the measurement of transaction prices. Instead, Sonesta Simply Suites records a liability when the taxes are collected and relieves the liability when payments are made to the taxing authority.

For a prospective Sonesta Simply Suites franchisee, this accounting practice means that the revenue figures presented in the financial statements do not include sales taxes and similar taxes. This provides a clearer picture of the actual revenue earned by the hotels from their operations, as it excludes amounts that are simply collected and passed through to governmental agencies. Franchisees should be aware that while they will be responsible for collecting and remitting these taxes, they are not considered part of the hotel's revenue.