Apparently, online travel websites such as Expedia and Travelocity are trying to evade their share of tourist taxes on hotel room stays, which they buy and sell, in the state of Florida. It is also evident that some state legislators are making it easier for them to do this. The legislators are pushing to change the state law as to exempt these companies from paying county taxes on the prices of hotel rooms they buy and sell. What this will do is that it will affect the local governments of revenue from tourism and help the companies from outside the state.
State officials estimated in 2011 that the tax revenue was about $29 million.Many online travel companies refuse to pay taxes on the full price of the hotel rooms which will result in a significant cut in the tourism revenues of Florida. Some county governments such as Palm Beach County have already sued to recover the millions owed to them.
The issue in question is pretty simple. Visitors who book a room online stand to pay a 5% tax on the price that the online company got from the hotel, which is cheaper and at a wholesale price. When a tourist makes a booking directly, he or she will need to pay the 5% tourist tax on the normal, standard price of the hotel room. This naturally makes online booking more preferred thereby increasing business for the online travel companies.
Though the difference might seem small for an individual transaction, for a tourist state like Florida, this small difference could add up to a significant amount in the end. However, the passing of this bill seems to be remote as there are two powerful lobbies — the online travel companies and the traditional hotels — pitted against each other.
Source: Palmbeachpost.com
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