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New Steps in Florida Hotel Tax Fight

by User Not Found | Mar 21, 2011

Florida has for two years been the center of a national hotel tax conflict and the outcome will impact how much money Florida destinations have to spend on tourism promotions. The state's tourist destinations are trying to recover from last year's serious decline of visitors due to the 2010 Gulf oil disaster and the impact of recently active hurricane seasons.

Consumers booking rooms on travel web sites, such as Priceline, Orbitz and Expedia, pay competitive retail rates for rooms the sites originally obtain at lower wholesale costs. Florida counties have waged a court battle since 2009 over whether or not web sites illegally get away with paying lower county bed taxes, based on wholesale prices, while selling rooms at higher retail prices and pocketing the difference. According to FloridaToday.com, a Gannett media company news service which editorially supports 50 Florida counties in their lawsuit against the web sites, a temporary $775,000 settlement was reached last week. The web sites, however, admitted no wrong doing and the Florida counties agreed – for now – to not pursue any additional taxes over what the web sites were originally paying.

However, State Representative John Tobia, (R-Melbourne, FL), and State Senator Don Gaetz (R-Niceville, FL) submitted new Florida bills to allow online sellers to pay taxes based on the lower wholesale room prices. "Travel agents and online travel companies have never been taxed on service fees. Florida law exempts all service fees," said Tobia in a published comment. "Third-party marketing agencies bring revenue to the state…We need to focus on increasing tourism, not increasing taxes." More chapters in this story are yet to come.

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