THE CAPITAL, TALLAHASSEE, February 21, 2011 --
With cases pending in courts around the state and federal officials also looking into the issue, a Senate proposal approved in its first committee stop Monday would insulate Orbitz, Expedia and other online booking companies from paying higher local option tourism taxes.
Sen. Don Gaetz, R-Niceville, wants to put a Do-Not–Disturb sign on the tax rules for hotel rooms booked online. Right now, the booking companies book a room at a negotiated rate, and then mark up the price for consumers.
The companies argue difference between the two prices is a fee, not part of the room rate, and therefore not subject to tax. Local government officials want lawmakers to require online booking agencies to pay the tourism tax associated with the full customer cost of the room.
Gaetz’ bill takes the side of the online booking companies, protecting them from paying additional tax on the fees they charge.
“I don’t think this is an issue we want to leave up to the federal government or the courts,” Gaetz said prior to the vote.
The Senate Community Affairs Committee agreed, voting 5-2 in favor of the bill (SB 376 ), though members raised concerns following testimony from hoteliers, on-line marketers and tourism officials.
Then-Attorney General Bill McCollum sued Expedia and Orbitz in 2009 claiming they owed the state millions of dollars in back taxes over the disputed billing practices, even as he acknowledged state law was vague. Also, 32 counties led by Monroe County, which includes the Keys, settled with Expedia and other marketers for $6.5 million.
The bill would side mostly with the Internet companies. On Monday, resort owners said the disparity costs them money.
“How , if this is passed, won’t this be a competitive advantage for online marketers,?” asked Keith Overton, president of TradeWinds Island Resorts in St. Pete Beach.
The measure includes a provision that strengthens counties' ability to receive a share of Revenue Department cases that result in the collection of taxes owed by non-compliant taxpayers - softening opposition from many of the half-dozen counties that have also filed suit seeking higher payments from the Internet bookers.
On Monday, at least one local tourism official said the measure tilts the scales too much in favor of online marketers. Hillsborough County, for example, loses $400,000 a year in tourist development taxes by not taxing at the higher rate.
“The proposal is so heavily weighted on one side,” said Robert Morrison, member of the Hillsborough County Tourism Development Council.