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St. Petersburg Democrat continues push to collect online hotel taxes

TALLAHASSEE — The state tax collector was caught in the crosshairs Wednesday of a simmering controversy over online hotel tax collections as a St. Petersburg legislator accused the department of bowing to political pressure.

State Rep. Rick Kriseman said the Department of Revenue was walking away from an estimated $500 million a year in state and local sales taxes because it has refused to force payment from online travel companies like Expedia and Travelocity, which sell hotel rooms on behalf of large hotel chains.

Since June, however, the department has said it is not clear whether the industry owes the tax — an apparent contradiction to advice it gave the hotel industry in its online "Standard Industry Guide" as recently as January.

"Why hasn't our state taken any action to collect the money that is owed?'' Kriseman asked at a press conference at the Capitol. He also blasted Attorney General Pam Bondi for failing to prosecute companies for evading taxes.

Online travel companies sell unbooked hotel rooms held by large hotel chains. They remit the tax based only on the rate they pay the hotel — not on the markup they charge customers. The difference they collect is kept as profit. Travel companies say it is their service fee. Cities, counties and others have sued the industry because they say the total price the customer pays is taxable.

On June 16, Bondi asked the department to adopt rules to clarify. A week after she made the request, the Department of Revenue removed from its website the language in its industry guide that said online travel companies owed taxes on the full amount they charge customers. An official with the department said the language had been posted in error.

But Kriseman said he is suspicious, given the fact that the industry is pushing a bill to exempt them from the tax. He said the department is "very vigilant to pursue violators who don't pay their taxes when that violator is an individual or a small business."

The difference, Kriseman said, is that "small-business owners and individuals do not have a team of lobbyists."

Kriseman, a Democrat, read a statement from Diane Nelson, the Pinellas County tax collector and a Republican who has been fighting the issue for nearly a decade.

"The final price the consumer pays is and has always been the taxable price," Nelson said. "The law is very clear, and all the players in this game have known for years taxes are due. I urge the Attorney General's Office and the Department of Revenue to enforce the law."

St. Petersburg Democrat continues push to collect online hotel taxes 09/21/11 [Last modified: Wednesday, September 21, 2011 9:46pm]
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