Skip to content
The COVID Project

Industry 06 of 27 · Findings

Hotels, Travel and Tourism

The conclusions for each of the six quarters and the standard of proof they meet.

LGlodging and occupancyFBfood and beverage outletsMCmeetings, conventions and banquetsAMamenitiesTVtravel demand under air, cruise…GSgroup salesHKhousekeeping and operating…SCsupply chainHRhiring, screening, training…OPoffice, administration, sales…WFworkforce availabilityCBthe customer base
Build the report for this industrySearch the Library for this industry

Findings

On the statute's words, on Tri-State's definitions, on the United States' own representations and on the orders in the Library, employers in the hotel, lodging, travel, tourism and event-venue industry in the United States had the operation of their trade or business partially suspended during each of the six calendar quarters from the second quarter of 2020 through the third quarter of 2021 due to orders from appropriate governmental authorities limiting commerce, travel and group meetings due to COVID-19. The Service's contrary account of the period is not a contest of weight; it is a description of a period that did not occur.

The second quarter of 2020

The record establishes that during the calendar quarter beginning April 1, 2020 and ending June 30, 2020, the operation of the trade or business of employers in this industry was partially suspended due to the stay-at-home and closure orders of every State and the District of Columbia, the lodging closures, leisure-guest bans and short-term-rental bans of eleven States and the resort counties, the traveler quarantines of more than twenty States, the casino shutdown orders of every gaming State, the closure of every convention center, the No Sail Order, the entry proclamations and the land-border limits, each an order from an appropriate governmental authority limiting commerce, travel or group meetings due to COVID-19.

The third quarter of 2020

The record establishes that during the calendar quarter beginning July 1, 2020 and ending September 30, 2020, that operation was partially suspended due to the summer traveler quarantines of New York, Connecticut, Massachusetts, New Mexico, the District of Columbia, Chicago, Hawaii, Alaska, Maine, Vermont, Rhode Island and Kansas, the New York City hotel verification rule, the gathering caps and convention bans of every State, the casino regulators' reopening conditions, the bar and amenity closures, the lodging caps of New Mexico, New Hampshire and Connecticut, and the No Sail Order, entry proclamations and border limits.

The fourth quarter of 2020

The record establishes that during the calendar quarter beginning October 1, 2020 and ending December 31, 2020, that operation was partially suspended due to the winter re-tightening orders of twenty-five jurisdictions that confined hotels to registered or essential guests, forbade or capped every meeting and banquet, re-closed dining rooms, gyms and casinos and tested or quarantined the guest at the door, California's Regional Stay at Home Order and its county implementations, Hawaii's Safe Travels orders and its face-covering order, an airborne-transmission control on every indoor space, the gaming regulators' orders and the Conditional Sailing Order, entry proclamations, border limits and eviction moratorium.

The first quarter of 2021

The record establishes that during the calendar quarter beginning January 1, 2021 and ending March 31, 2021, that operation was partially suspended due to the winter orders through their stepped expiry, Hawaii's Safe Travels and interisland quarantines, the federal conveyance order and inbound testing order, the entry proclamations, the federal workplace orders, the Conditional Sailing Order, the gaming regulators' orders and the metro travel and event orders.

The second quarter of 2021

The record establishes that during the calendar quarter beginning April 1, 2021 and ending June 30, 2021, that operation was partially suspended due to the capacity, gathering and travel orders in force to their stepped expiry between April 1 and June 30, 2021, Hawaii's proclamations and quarantines, the casino and lodging regulators' conditions, the metro orders, and the federal conveyance, testing, entry, border, cruise, workplace and eviction orders.

The third quarter of 2021

The record establishes that during the calendar quarter beginning July 1, 2021 and ending September 30, 2021, that operation was partially suspended due to the federal conveyance, testing, entry, border, cruise, Title 42 and contractor orders in force on every day of the quarter, Hawaii's proclamations, executive order and quarantine and its counties' orders, the Nevada and Louisiana directives, proclamations and gaming orders, the New York, California and Bay Area instruments, the statewide face-covering reinstatements of New Mexico, Illinois, Washington, Oregon and the District of Columbia and the unvaccinated-person requirements of New Jersey and Connecticut, workplace infection-prevention and exposure-control requirements on every indoor public space, the reinstatements of more than thirty of the largest cities and counties, the Kansas and Rhode Island quarantines, the preemption instruments of Texas, Florida and Georgia, the territorial and tribal orders, and the court, quarantine, school and eviction orders on the industry's counterparties and workforce.

In each quarter

In each quarter the orders caused a temporary delay, interruption or termination of a more than nominal portion of the industry's operations; in each quarter the suspension existed "during the calendar quarter"; and in each quarter, but for the orders, no law required the change.298

Each finding is established by a preponderance of the evidence, on public records subject to judicial notice, in a de novo proceeding.299 Each position taken in this analysis has substantial authority: the statutory text, four enactments of Congress, the Supreme Court's canons of construction and causation, Tri-State's holdings on the United States' agreed definitions, the District Court's holdings in Stenson Tamaddon, LLC v. IRS, the United States' representations to two federal courts, and the instruments themselves.300 A taxpayer who assembled the orders that governed its industry and applied the statute's words to them acted with reasonable cause and in good faith under section 6664(c); the erroneous-claim penalty of section 6676, as amended by Public Law 119-21 in 2025, does not reach such a claim; and a position that applies the words Congress wrote to the Federal Register and the State registers is not frivolous under section 6702 or Notice 2010-33.301 Fraud is the Government's burden by clear and convincing evidence, and nothing in a claim founded on the public record supports it.302

  1. I.R.C. § 3134(c)(2)(A)(ii)(I), 135 Stat. 177; CARES Act § 2301(c)(2)(A)(ii)(I), 134 Stat. 347-48; Tri-State at 9, 17-19; the six quarters and the interconnected economy sections, above. ↩
  2. Lewis v. Reynolds, 284 U.S. 281, 283 (1932); United States v. Janis, 428 U.S. 433, 440 (1976); Welch v. Helvering, 290 U.S. 111, 115 (1933); Fed. R. Evid. 201(b); Kater v. Churchill Downs Inc., 886 F.3d 784, 788 n.3 (9th Cir. 2018); Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998-99 (9th Cir. 2010). ↩
  3. Treas. Reg. § 1.6662-4(d)(2)-(3); Treas. Reg. § 1.6662-3(b)(3); the statute and the United States' positions, on this site's statute page and its page of the Government's own words. ↩
  4. I.R.C. § 6664(c)(1); I.R.C. § 6676(a) (Ex. LAW-040), as amended by Pub. L. 119-21, § 70605(f), 139 Stat. 286, 288 (July 4, 2025) (Ex. LAW-005), applicable to claims for credit or refund made after that date, § 70605(g)(4), 139 Stat. 288-89; I.R.C. § 6702; Notice 2010-33, 2010-17 I.R.B. 609. ↩
  5. I.R.C. § 7454(a). ↩