Make us your home page

Florida House votes to protect online travel companies from taxes they were advised to pay

TALLAHASSEE — Online travel providers attempted for years to skirt paying Florida sales taxes, even though their lawyers and accountants had advised them that they were obligated to pay, according to documents released Monday in an attempt to kill the industry's bill.

The recently discovered documents, uncovered during pending litigation in Georgia, were sent to all 120 members of the Florida House of Representatives on Monday by Rep. Rick Kriseman, D-St. Petersburg, prior to debate on the bill. The bill would shield the online travel companies from paying taxes on the retail price of the hotel rooms they sell and allow them to continue to pay taxes based on the wholesale cost.

The legislation is opposed by counties who say they are losing $30 million to $40 million a year in revenue, and large hotels chains, who see the tax break as an advantage for their online competitors. Proponents argue that the Internet companies provide a service, and increasing their tax would be the equivalent of a services tax.

A vote against the bill "is condoning a brand-new tax in the state of Florida, and I don't want to create an environment where we're raising the cost of bringing people here at a time when we need them the most,'' said Rep. Jimmy Patronis, R-Panama City.

Despite the last-minute argument by Kriseman and a bipartisan group of opponents, the House voted 77-38 to exempt Internet-based travel companies, such as Expedia, and Priceline, from paying taxes based on the retail rate of hotel rooms paid by customers.

According to the documents, the online resellers knew as early as 2003 "that they owed the taxes to the state, and have been purposefully and intentionally failing to pay the taxes, hoping that they wouldn't be sued before they could change state law,'' said Kriseman, a lawyer, in his letter to House members.

Kriseman argued that the documents show the resellers "purposefully and intentionally failing to pay the taxes" and engaging in an orchestrated lobbying effort to change the law to avoid paying the tax before they were sued.

In a 2003 document labeled an "Expedia confidential attorney work product,'' the company's lawyers suggested: "It appears that the stakes are high enough that we should resist, delay and make it as difficult as possible for any state to require us to collect occupancy tax."

In another legal opinion from the Holland & Knight law firm, dated Jan. 28, 2003, lawyers warned Expedia and that "it appears that the total price that customers pay to the companies for hotel rooms is subject to taxation in most jurisdictions analyzed." The opinion also indicated that Expedia "has a high risk of exposure to state and local taxes in Florida."

Jennifer Green, a lobbyist for Expedia, said the company would not comment on the documents, but she suggested their last-minute appearance so late in the session was suspicious.

"This issue has come up and been fully vetted,'' she said.

The online travel companies and their supporters argue that the difference between the amount they pay hotels and the amount they charge consumers is the service they provide to help consumers search for rooms, compare prices and make bookings.

The issue has been one of the most heavily lobbied of this legislative session, as the online travel industry spars against industry giants such as Walt Disney World and Marriott International, county governments and local destination-marketing bureaus.

State and local governments across the country have sued the online companies to force them to remit taxes on the retail portion of their hotel rooms. The bill attempts to end that litigation in Florida and revenue estimators predict counties will forgo about $28.7 million in revenue that is not now being collected.

Mary Ellen Klas can be reached at

Florida House votes to protect online travel companies from taxes they were advised to pay 05/02/11 [Last modified: Monday, May 2, 2011 9:41pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Fewer Tampa Bay homeowners are underwater on their mortgages

    Real Estate

    The percentage of Tampa Bay homeowners underwater on their mortgages continues to drop. In the second quarter of this year, 10.2 percent of borrowers had negative equity compared to nearly 15 percent in the same period a year ago, CoreLogic reported Thursday. Nationally, 5.4 percent of all mortgaged homes were …

    The percentage of Tampa Bay homeowners underwater on their mortgages  continues to drop. [Times file photo]
  2. 'What Happened'? Clinton memoir sold 300,000 copies in first week


    Despite being met with decidedly mixed reviews, What Happened, Hillary Clinton's new memoir about the 2016 presidential campaign, sold a whopping 300,000 copies in its first week.

    The new memoir by former presidential candidate Hillary Clinton sold 300,000 copies in its first week.
  3. After Irma topples tree, home sale may be gone with the wind

    Real Estate

    ST. PETERSBURG — To house hunters searching online, the home for sale in St. Petersburg's Shore Acres neighborhood couldn't have looked more appealing — fully renovated and shaded by the leafy canopy of a magnificent ficus benjamini tree.

    Hurricane Irma's winds recently blew over a large ficus tree, left, in the yard of a home at 3601Alabama Ave NE, right, in Shore Acres which is owned by Brett Schroder who is trying to sell the house.
[SCOTT KEELER   |   Times]

  4. Unemployment claims double in Florida after Hurricane Irma


    The number of Americans seeking unemployment benefits dropped by 23,000 last week to 259,000 as the economic impact of Hurricane Harvey began to fade.

    Homes destroyed by Hurricane Irma on Big Pine Key last week. Hurricane Irma continued to have an impact on the job market in Florida, where unemployment claims more than doubled from the previous week.
[The New York Times file photo]
  5. Calling it a 'dangerous precedent,' Tampa chamber opposes city tax increase


    TAMPA — Calling the possibility a "dangerous precedent," the Greater Tampa Chamber of Commerce on Thursday took the rare step of opposing City Hall's proposal to raise Tampa's property tax rate because of its impact on business.

    The Greater Tampa Chamber of Commerce voted against supporting a city tax hike on commercial property. Pictured is Bob Rohrlack, CEO of the chamber. | [Times file photo]