Over the holiday weekend, the major online travel companies and their national trade association launched a very misleading email campaign to urge both the general public and the travel industry to contact Congress in support of the “Internet Travel Tax Fairness Act” (ITTFA). We want to make sure that you have the correct facts regarding this issue.
Misleading Statements: The online travel companies’ email campaign alleges that “local politicians are threatening to impose new taxes on customers booking travel online,” and urges travelers across the nation to “take a stand against new travel taxes.”
Fact: The Internet Travel Tax Fairness Act does not prevent or even involve any “new taxes.” Instead, the ITTFA would exempt online travel companies from having to pay the same amount of existing state and local hotel taxes currently paid by all hotel brands.
Motivation of Online Travel Companies: For years, the online travel companies have maintained they should not be subject to remitting their fair share of state and local hotel occupancy taxes. Instead, these companies have been remitting hotel occupancy taxes on only the discounted wholesale price that they pay for hotel rooms, rather than remitting hotel occupancy taxes on the retail rate they actually charge the customer for the room. Consequently, state and local governments have engaged in lawsuits against online travel companies to recover these unpaid taxes. In response, the online travel companies are turning to Congress to extinguish their duty to pay the same amount of hotel tax that are applicable to all other hotel companies. To see this email campaign firsthand, here is a link to the site created by the online travel companies that contains their message: http://travelersfirst.org.
Current Status of Proposed Federal Legislation and Industry Response: Recently, the online travel companies attempted to insert ITTFA language into a small business bill. They were unsuccessful after a consortium of hotel and other industry partners from both the private and public sector contacted our U.S. Senators to urge them to oppose this amendment. Now, we have learned that a version of ITTFA may be offered as an amendment to a bill when the Senate returns from recess on July 12th.
We will send out an alert asking for the industry to contact members of Congress as there are new proposals for adding this detrimental legislation into other bills.
Scott Joslove,
President & CEO
Texas Hotel & Lodging Association
