Did you know the GSA per diem lodging cap is not an all-in number?
Taxes are not included in it.
This means if the lodging cap for your overnight city is $110 and your hotel room is $110 plus $18 in taxes, you don’t have to find a cheaper room — you claim $110 for lodging and $18 separately as a miscellaneous travel expense, and you get all of it back.
Most families either don’t know this or assume the cap is the cap, period. It isn’t. Here’s exactly how lodging taxes work on a PCS travel voucher.
What the Regulation Actually Says
This is one of those weird situations where you have to do a bit of digging to make sense of it, so unless you’re a nerd (like us) and really want to know the reg, feel free to skip this section.
For the rest of us, JTR chapter 5 dictates most things money and PCS. Lodging taxes (and other fees) fall under miscellaneous reimbursable expenses, which is covered by section 050103:
050103. Miscellaneous Reimbursable Expenses
See sections 0202 and 0204 for information about the miscellaneous reimbursable expenses that may
be authorized during a PCS.
Helpful, right? It’s like a government version of a choose your fate book.
Chapter 2 covers standard travel and transportation allowances, aka travel stuff that isn’t PCS-specific, like when you go TDY. So if we look in section 0204 on miscellaneous reimbursable expenses, you’ll find a bunch of tables full of stuff.
What applies to lodging taxes is table 2-15, and in this case specifically row 12:
If… a traveler is lodged in the CONUS or non-foreign area
OCONUS,
Then… a lodging tax is a reimbursable expense. When the cost of lodging exceeds the lodging portion of the applicable per diem rate and AEA is not authorized, reimbursement of lodging tax is limited to what the Government would have paid if the cost of lodging was equal to the lodging portion of the per diem rate.
An AEA is a TDY thing that only happens in limited circumstances, so don’t worry about that (whew!). What it is saying, however, is that if you spend more than the nightly lodging cap ($110 for PCS), you’ll only be reimbursed for the proportionate amount of tax.
For example, you splurge and spend $220 one night, and you pay $20 in taxes. The government will only reimburse you for $110 for the room, and $10 in taxes. (Yes these numbers aren’t realistic, but you get the idea).
Finally, at the beginning of the JTR in the definitions section, it states:
PER DIEM ALLOWANCE is also known as a subsistence allowance and is a daily payment instead of
actual expense reimbursement for lodging, meals, and incidental expenses. A per diem allowance is
separate from transportation expenses and other reimbursable expenses. Lodging taxes in the U.S.
(CONUS and non-foreign OCONUS) are excluded from the per diem allowance and are reimbursed as a
separate expense. In foreign locations, lodging taxes are part of the per diem allowance and are not a
separate expense.
So if you’re PCSing OCONUS, the rules may be different.
On top of that, Federal Travel Regulation 301-11.27 states that in CONUS, lodging taxes paid by the traveler are reimbursable as a miscellaneous travel expense, limited to taxes on reimbursable lodging costs.
This is different from how M&IE per diem works. Meals and Incidental Expenses — your daily food and tips allowance — already includes taxes and gratuity in the flat rate. You don’t claim those separately because they’re already baked in.
Lodging taxes are handled differently and claimed as a separate miscellaneous expense.
You’re welcome.
What This Means for Booking Hotels
When you’re searching for hotels along your PCS route, you don’t need to find a room that comes in under the lodging cap after taxes. You need to find a room where the nightly rate itself — before taxes — is at or under the cap.
Example:
- Daily lodging cap is $110
- You find a hotel at $108/night plus $16 in taxes
- Total out of pocket per night: $124.
- Total reimburseable: $108 in lodging plus $16 in taxes as a miscellaneous expense.
If the room rate itself is $125 before taxes, you’re over the cap by $15 and that overage is yours to absorb — taxes or no taxes. The reimbursement calculation starts with the room rate, not the total bill.
Make sure you keep your lodging receipts, and make sure they are itemized so you can claim everything appropriately.
What About Hotel Fees?
Fees are a different story and worth being careful about. Not all hotel fees are reimbursable.
Resort fees
Resort fees are generally not reimbursable unless they’re mandatory and cannot be waived. Many hotels in popular markets charge daily resort fees for amenities you didn’t ask for and won’t use. These are considered incidental charges, not lodging costs, and don’t automatically qualify for reimbursement.
If a hotel charges a mandatory resort fee and won’t waive it, document it and discuss with your finance office — but don’t count on it.
Parking fees
Parking is a separate reimbursable expense if you incur it during official travel — but it’s not part of the lodging reimbursement.
Keep the receipt and claim it as a miscellaneous expense, same as taxes. If parking is $15/night and you paid it, submit the receipt.
Pet fees
Hotel pet charges are reimbursable under JTR paragraph 050107 — up to $550 CONUS total per PCS. They’re not part of your lodging reimbursement either. They’re a separate line item under pet relocation expenses.
Keep your receipts!
Want help keeping track of receipts?
Plug in your move and we’ll calculate your authorized travel days, and per diem, and give you a PDF with a list of receipts to keep along the way.
What Counts as a Miscellaneous Travel Expense
Under the JTR, miscellaneous travel expenses during a PCS drive can include:
- Lodging taxes (FTR 301-11.27)
- Tolls
- Parking fees incurred during official travel
- Baggage fees if traveling by air
Receipts are required for any single expense of $75 or more. For lodging taxes, your itemized hotel receipt showing the nightly rate, taxes, and total is what you need — which you should be keeping anyway for the lodging reimbursement itself.
One State-Specific Wrinkle
Some states and local governments exempt federal travelers from hotel taxes entirely. If you’re traveling through a state that offers a tax exemption for federal government travel, you may not owe the taxes in the first place — which means nothing to claim.
This varies significantly by state and sometimes by county.
It’s worth asking at check-in whether a government or federal traveler tax exemption applies. If it does, present your military ID and orders. If it doesn’t, pay the tax and claim it on your voucher.
How to Claim Lodging Taxes on Your Voucher
When you file your travel voucher:
- Claim your lodging costs up to the applicable per diem cap for each overnight city in the lodging section
- Claim lodging taxes separately in the miscellaneous expenses section
- Attach your itemized hotel receipt for each night — it needs to show the nightly rate, taxes, and total separately (did we say keep your receipts?)
- If your finance office pushes back on the tax reimbursement, show them what the reg says
For a complete guide to filing your travel voucher without leaving money behind, see our complete PCS entitlements guide.
The Other PCS Tax Question
There’s a related tax question that comes up constantly in military finance groups and it’s worth addressing briefly here: which PCS entitlements are taxable income?
The short version:
- Non-taxable — MALT mileage reimbursement, per diem (M&IE), lodging reimbursement, and most moving expense reimbursements for active duty military are non-taxable under IRS rules. You won’t see these on your W-2, and you don’t need to hunt them down either. They’re similar to BAH in that way.
- Taxable — The PPM/DITY incentive payment is taxable income if you move yourself. DFAS will issue a W-2 for it. The good news: authorized moving expenses (truck rental, boxes, packing materials, fuel for the move) reduce the taxable portion of that payment. Keep receipts dated after your official orders date to claim them.
- DLA — Generally non-taxable.
- The moving expense deduction — Suspended for civilians under the 2017 Tax Cuts and Jobs Act, but active duty military retained it. If you’re paying out-of-pocket moving expenses that aren’t reimbursed, those may be deductible. Talk to a tax professional familiar with military returns — this is one where the details matter.
We’ll cover the full picture of PCS taxes, your W-2, and what to do with it all in a dedicated post in the future.
For now, know that the hotel tax question and the income tax question are two completely separate things — and most of your PCS entitlements aren’t touching your tax return at all.
Frequently Asked Questions
No. Lodging taxes are not included in the CONUS per diem lodging rate. Per JTR Chapters 2 and 5, and FTR 301-11.27, they’re reimbursable separately as a miscellaneous travel expense on top of the lodging cap.
Yes. The M&IE flat rate already includes taxes and gratuity on meals. You don’t claim those separately — they’re baked into the daily rate. Only lodging taxes can be claimed as a separate miscellaneous expense.
Generally no. Resort fees are considered incidental charges rather than lodging costs and typically aren’t reimbursable. The simplest approach is to avoid hotels that charge mandatory resort fees when you have alternatives at or under the lodging cap.
Your itemized hotel receipt showing the nightly rate, taxes, and total separately. The same receipt you’re already keeping (or should be) for the lodging reimbursement covers the tax claim too.
Yes — parking fees incurred during official travel are reimbursable as a miscellaneous expense. Keep the receipt and claim it separately from lodging.
Yes. Some states and local governments exempt federal travelers from hotel taxes. Ask at check-in and present your military ID and orders if an exemption applies. If no exemption exists pay the tax and claim it on your voucher.
