Online travel agencies are taking their fight for an exemption from local hotel taxes to the people, launching a grassroots campaign that promotes their proposal as one that will protect travelers from being taxed twice.
The Interactive Travel Services Association today launched TravelersFirst.org, a website that creates a form letter of opposition that will be automatically sent to a user’s U.S. senators.
ITSA said the site is the first step in creating a vehicle for online travelers to express their opinions on taxes and other policies that affect them.
"America’s travelers will no longer silently watch as tourism taxes rise," Art Sackler, ITSA's executive director, said in a statement announcing the new campaign.
"Tens of millions of Americans use online travel sites every year to book vacations, plan trips and visit friends and family, yet their voices have been missing from policy debates over important travel issues like new taxes and regulation. The TravelersFirst.org coalition will help millions of online travelers mobilize and make their voices heard."
The site, which will be promoted by OTAs like Expedia, Orbitz and Travelocity, is the latest effort by the OTAs to gain support for proposed federal legislation that would prohibit local governments from taxing online travel agencies and other resellers on their markups of hotel rooms.
The OTAs insist that they owe taxes only on the wholesale price, not on the money above and beyond that, which they say is their fee for making the sale.
Still, a number of cities and local government taxing entities have been suing the OTAs for back taxes on those markups.
The OTAs have been floating the proposal for months but it has not yet been filed or officially added to any other legislation.
Hoteliers are fighting the premise, saying online agencies are simply seeking a huge tax exemption.
"Their claim that it would create a new tax is ridiculous, unfounded and unfactual," said Shawn McBurney, a lobbyist for the American Hotel & Lodging Association. "All this does is create a special tax preference for three or four enormous Internet companies."
The ITSA proposal would also exempt travel agents and other intermediaries from taxes on their markups, which the AH&LA said would put its members at disadvantage in the marketplace, as hotels have to pay taxes on the full retail price of rooms they sell.
Hoteliers also fear that local taxing authorities will come after hotels to collect a tax on distributors' markups.