Local governments want to levy their double-digit tax hotel occupancy taxes on service fees charged by online travel websites. Local governments want to levy their hotel occupancy taxes on service fees charged by online travel websites. New York City recently passed an ordinance to impose its 20% tax on these fees, a move that’s opposed by over 100 NYC hotels and by the American Society of Travel Agents.
The state of Florida also considered bills to tax service fees as hotel rentals. This is the wrong approach. Service fees should not be taxed the same as a hotel room charge. If these service fees were to be taxed at all, they would be taxed as a service rendered to the traveler booking the room — a new tax that would have to be levied by the jurisdiction where the traveler resides.
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