Cities Sue Online Travel Companies for Hotel Taxes

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  debrossmitchell09/09/08 Reported as spam
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  Message has been deleted.

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  jason.parker@...09/11/08 Report as spam
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  Key Questions--and Some Answers

  The key here is to define what the $30 upcharge is (in the $50 wholesale vs. $80 retail example above). Is it a brokerage fee...? Is it part of the hotel "rent"...? Is it net profit--exactly the same profit that the hotel would gain from handling the transaction directly...?
  
  A core factor is distinguishing between the two transactions: The original "sale" of the hotel room and the "re-sale" of that room to the end user. Is a re-seller a de-facto hotel or are they simply an agent entitled to an agent's fee?
  
  Claiming that agents are virtual extensions of the companies whose goods and services they promote and sell would make a huge mess for travel agents. What portion of the agent's fee would you tax as a hotel when an all-inclusive vacation package is sold that covers airfare, car rental, hotel, meals, shows, tours, spa services, and a round of golf?
  
  The agent's fee is for a service--a specific service. That service is arranging access to a hotel room, not for the hotel room itself. That's the hotel's part in the transaction.
  
  The agent's fee covers a service associated with the hotel's providing the hotel room--it is not an inherent part of providing the room. Would you apply the same occupancy taxes to the bellhop's tip...the valet's tip?
  
  Bottom line: the hotels use these broker-agents because doing so increases their business. Otherwise they wouldn't be using them. Doing so increases their bookings and, most importantly, their PROFITS.
  
  States raise revenue by taxing profits...and payrolls...and property. Higher business volume increases all three of these. A hotel that increases gross income by using agents is also going to increase their payroll an, more than likely, their property holdings, too.
  
  The state governments already enjoy more income flowing itno the public coffers from the increased business volume at the hotels and the tax revenue streams associated with that business volume. They should leave the hotels and their agents alone and focus on eradicating waste rather than looking for more ways to finance that waste.
  
  NOTE: A review of the number of meetings held at St. Simon's Island or Jekyll Island by various Georgia governmental agencies that could have just as easily been held at a local venue will illustrate the degree of waste referred to here.

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  barbara e hernandez09/12/08 Report as spam
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  RE: Cities Sue Online Travel Companies for Hotel Taxes

  Jason:
  
  I see your point and I see how online companies find this completely unfair. However, you are talking to cities who are seeing their budgets depleted by tanking property taxes, high costs for petroleum and lower sales tax revenues.
  
  I think this is a case of cities creating a very public spectacle to show taxpayers they are doing something. I think winning the lawsuit is secondary. But I may be biased.
  
  b,

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  martinlock09/30/08 Report as spam
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  RE: Cities Sue Online Travel Companies for Hotel Taxes

  More and more multinational companies and noteworthy business concerns are venturing into the hospitality sector owing to the sudden and remarkable spurt that this sector witnessed in the last couple of years. Most of the hotels are also tying up with Hyderabad airlines and Bangalore airlines hotels respectively, so that they have edge over their competitors as far as the bookings and popularity are concerned.