Local governments want to levy their double-digit hotel occupancy taxes on service fees charged by online travel websites. New York City passed an ordinance, the state of Florida considered legislation and has sued Expedia and Orbitz, and over 60 municipalities have filed lawsuits against online travel sites.
Treating online travel sites the same as hotels confuses the role that the Internet websites play as intermediaries to help match buyers with sellers. That’s why the service fees that travel websites charge should not be taxed the same way as a hotel room charge. The American Legislative Exchange Council (ALEC) recognized as much when it recently passed model legislation to prevent the imposition of hotel taxes on travel intermediaries. The model legislation is based on a Missouri bill that became law in July.
NetChoice is also working with the Streamlined Sales Tax Governing Board and with NCSL to evaluate an alternative proposal that taxes agent services as a service rendered to the traveler booking the room.
What’s wrong? Privacy legislation that sets information collection defaults will harm the growth of online commerce.
