Hoteliers battle online travel agencies on Capitol Hill

By Jeri Clausing

Groups pushing legislation to exempt online travel companies from hotel occupancy taxes have launched a preemptive strike — sending an open letter to hoteliers seeking talks on the matter.

Meanwhile, the American Hotel & Lodging Association prepared for a day of lobbying against their proposal.

Groups pushing for the tax exemption include the American Society of Travel Agents, Business Travel Coalition, Hotel Electronic Distribution Network Association, Interactive Travel Services Association and U.S. Tour Operators Association.

"Successful resolution of this issue cannot take place at the local level. It will require a fair and equitable national standard, and we’d like to ask for your help to develop the best solution in that area," the groups said in a letter sent Friday afternoon asking for a meeting during the AH&LA Legislative Action Summit, which opens Monday and ends Tuesday on Capitol Hill.

"It’s in all of our best interests to find a federal solution that addresses this intractable issue and removes the legislative and legal uncertainty for travel intermediaries, so we can get back to doing what we do best: working with our partners in the hotel business to bring you business."

The overture was immediately rebuffed by the AH&LA.

"When we first became aware of their proposed legislation last spring, the online travel companies (OTCs) refused to meet with AH&LA despite repeated requests to discuss concerns we expressed or to share the language they were proposing,” said Marlene Colucci, executive vice president for public policy for AH&LA.

"Because they refused to meet or discuss our concerns and continued to press for the passage of their legislation, we were compelled to inform Congress of our concerns and began to meet with many congressional lawmakers to express our opposition to the Internet Travel Tax Fairness Act."

Colucci said the group remains strongly opposed to the proposal and will use its meeting this week to “to further educate more members of Congress about the threat posed to the American lodging industry and its tens of thousands of employees nationwide by the OTCs’ legislation."

At issue is whether online travel agencies and other resellers owe taxes on their markups of hotel rooms.

The OTCs insist they don’t, and are seeking federal intervention to halt a flood of lawsuits by states and cities claiming the OTCs owe municipalities and counties back taxes.

The AH&LA, however, argues that the proposal would expose hotels to liabilities for taxes collected by OTCs.

It would also give OTCs an advantage over hotel supplier websites, as the hotels have to pay tax on the full retail price, the AH&LA says.

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