Online bookings fuel tax debate
Taxes Monday, May 30th, 2011
From Business-Video.tmcnet.com
(Brunswick News (GA) Via Acquire Media NewsEdge) May 30–Online travel companies have become a staple in the hospitality arena. For customers, this means discounted hotel rooms and more affordable vacations. But for some hoteliers and communities as a whole, the websites may be doing more harm than good.
Discount travel websites such as Expedia.com and Hotels.com do not pay bed taxes at the same rate as traditional booking strategies. Hotels sell rooms to these sites at lower prices, with the sites only paying a bed tax on the lower purchased rate, rather than paying taxes on the price consumers pay for the room.
For example, if a online company buys a room on Jekyll Island for $80, it will then sell the room to a traveler for $100. But instead of paying the 5 percent bed tax on the $100 sum, the online travel company (OTC) only pays for the price at which they purchased the room. The OTC then pays $4 on the hotel-motel tax, pocketing that extra $1.
Occupancy taxes, or a bed tax, are used by the county to advertise and promote area tourism. Fewer collected taxes could equate less marketing for the coast’s top industry of tourism.
“This is a large national topic because many communities are losing large amounts of funding from lower taxed rates,” said Scott McQuade, president of the Golden Isles Convention and Visitors Bureau.
To read more, visit: http://business-video.tmcnet.com/news/2011/05/30/5541860.htm
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