National News: Third Party Travel Intermediaries Pushing Federal Hotel Occupancy Tax Legislation
Third party intermediaries (TPIs) such as Travelocity, Expedia, Orbitz, Hotels.com, etc., are promoting new draft federal legislation referred to as the “Internet Travel Tax Fairness Act.” THLA, along with the American Hotel & Lodging Association (AHLA), are opposing this legislation because it poses serious threats to the lodging industry.
The anticipated legislation is an attempt to legislate a remedy for many TPIs that are the subject of lawsuits throughout the nation for not remitting hotel tax on the entire amount of the hotel room charges. The legislation, which has not yet been formally filed in Congress, will purportedly prohibit the imposition of any room taxes on hotel reservations taken by TPI websites. In other words, the draft legislation would prohibit all state and local hotel occupancy taxes against hotel night reservations only through a TPI website. Hotels and hotel companies would be prohibited from obtaining this tax preference through their own brand internet booking sites. This draft legislation creates an unlevel playing field for all branded and other lodging properties that book reservations on their own websites. Such a tax exemption for TPI sites would also place additional pressure on city and state governments to raise hotel occupancy tax rates against all hotel properties to make up for any lost revenue if such an exemption for TPIs were approved by Congress. TPIs have mounted an extensive and unparalleled lobbying campaign to promote this proposed legislation and advocate their position.
In Texas, Senator John Cornyn and Representative Lamar Smith are members of key committees that will likely consider potential legislation. In response, THLA asked lodging properties across Texas to contact Senator Cornyn’s office to urge the Senator to oppose any such legislative proposal because it puts hotel websites at a further competitive disadvantage over TPI websites for marketing their own rooms. Additionally, THLA asked and lodging properties located in Representative Smith’s district to contact the Representative with the same concerns. To see a copy of our alert, visit www.texaslodging.com.
THLA and AHLA will continue to monitor the status of this potential legislation and its effects on the lodging industry.
