Florida Restaurant & Lodging Assoc. preps for legislative fight over online-travel taxes

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Jim Saunders of the News Service of Floirda reports that amid wide-ranging court battles about the issue, a major hotel-industry group Friday prepared for a renewed legislative fight about the amount of taxes online-travel companies should pay.

The Florida Restaurant & Lodging Association, backed by many counties, contends that online companies such as Expedia and Orbitz are improperly pocketing money that should be passed along as tourist-development taxes.

Meeting in Orlando, association leaders said online companies get an unfair advantage by not paying the disputed “bed” taxes. Lawmakers are expected in 2012 to consider bills aimed at making clear that online companies don’t owe the money — an issue that also touched off a lobbying battle in 2011.

“We are not trying to put the (online travel companies) out of business,” Orange County Comptroller Martha Haynie told hotel-industry officials during a panel discussion of the issue. “We just want them to play fair.”

The dispute, which also is playing out in lawsuits involving Orange and numerous other counties, centers on a key part of the way online-travel companies do business.

The companies, which serve as middlemen between hotels and travelers, charge customers for room rentals and fees related to providing the service. The legislative fight and lawsuits focus on whether the tourist-development tax should apply to the total cost.

Companies argue the tax should apply to the amount that they pay for room rental. But counties say the tax also should apply to the additional money the companies charge the traveler for their services.

Rep. Jason Brodeur, a Sanford Republican who sponsored a bill last year that backed the position of the online companies, attended the hotel-industry discussion but said he was not invited to be on the panel. After it was finished, he blasted the industry leaders for trying to impose what he described as a “services” tax.

“I’m disgusted a supposedly pro-business group would support a services tax,” he said. “I think their leadership just moved here from some socialist country. Why would the FRLA have a one-sided panel discussion about raising taxes on travelers?”

But hotel-industry officials dispute that requiring the online companies to pass along the money would be a tax increase or would have much of an effect on consumers. Carol Dover, president and CEO of the association, said it is a “black and white issue” about what the tax should apply to.

“How much does the consumer pay to get the key and put it in the door?” Dover said.

While many hotels contract with online travel companies to sell rooms that might otherwise go unfilled, hotels also typically have their own marketing and online-booking systems. That creates competition, and hotels are required to collect and pay bed taxes on the full amounts of the customer bills.

Jack Healan, a senior consultant with Omni Hotels & Resorts, said the online-travel companies grew quickly after the Sept. 11, 2001, terrorist attacks dramatically reduced tourism. The online sites, which contract for rooms at a lower-than-usual “wholesale” price, became popular with travelers looking for low rates.

But hotel-industry officials said the prices offered on hotel websites now often are comparable to the rates made available by online-travel companies.

Florida is one of numerous states that have seen legal and legislative fights about taxes paid by online-travel companies. The state House this year approved a bill aimed at making clear the companies don’t have to pay the disputed taxes, but it died in the Senate.

Sen. Thad Altman, R-Melbourne, and Rep. Rick Kriseman, D-St. Petersburg, took part in the hotel-industry discussion Friday and said they would oppose such legislation in 2012. Without a legislative decision, the issue likely will be settled in the courts.

At one point, Dover addressed Brodeur, who was sitting near the back of the audience, and asked whether another bill would be filed for 2012.

Brodeur replied, “We may.”

Dover then praised Brodeur but added, “I’d sure like to try to talk you out of filing a bill this year.”

Peter Schorsch is the President of Extensive Enterprises and is the publisher of some of Florida’s most influential new media websites, including SaintPetersBlog.com, FloridaPolitics.com, ContextFlorida.com, and Sunburn, the morning read of what’s hot in Florida politics. SaintPetersBlog has for three years running been ranked by the Washington Post as the best state-based blog in Florida. In addition to his publishing efforts, Peter is a political consultant to several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella.