CLEARWATER — Pinellas County commissioners unanimously voted Tuesday to hire an attorney to sue online travel companies to make them pay more tourist tax money.
Tax Collector Diane Nelson contends that the Internet companies shortchanged Pinellas $1.4 million last year — a claim that a growing list of Florida counties have made as they watch their tax revenue dwindle.
Online companies strike deals for blocks of hotel rooms and pay taxes on wholesale rates. They sell the rooms at a higher rate but don't pay the difference in sales and tourism taxes, saying their services as middlemen are exempt.
"It's nothing short of fraud, in my opinion. We need to pursue it," Commissioner Susan Latvala said.
The county will pay the Nabors, Giblin & Nickerson firm 30 percent of any recovered taxes, plus cost.
Pinellas will take part in the lawsuit with Lee, Leon and Polk counties, and other counties including Hillsborough could soon join, attorney Robert Nabors said.
Online travel site representatives contend the counties will stymie tourism by forcing Internet sites like Expedia and Travelocity to pay more tax money. They also have argued they're exempt from collecting the tax in Florida because they're a service provider. They don't operate hotels.
Nelson and county officials had held off suing since 1997, saying they wanted the Legislature to make state law clearer. Lawmakers failed to pass a bill, however, legislation in Congress could pre-empt the county from collecting back taxes.
The issue of tax payments puts hoteliers in a "quagmire," said Keith Overton, senior vice president of TradeWinds Island Resorts on St. Pete Beach. Hotel operators want the tax fully collected because it's used to promote tourism, said Overton, incoming chairman of the Florida Restaurant and Lodging Association.
But online travel sites account for a significant portion of hotel bookings. This year, TradeWinds expects 20 percent of its business to come from travel sites.
Requiring the sites to account for local tax rates and pay higher rates could crimp business, he said.
News
