A powerful Republican state senator wants to let online travel companies skip collecting some taxes while requiring Florida hotel booking desks to collect them all. This is special interest legislation at its worst, advantaging out-of-state companies over those who hire Floridians. Neither the state's tourism industry nor fellow Republican leaders should stand for it.
The issue turns on tourism tax laws written before the advent of Travelocity, Expedia and Orbitz. Under the laws — and central to Florida's longtime tradition of underwriting government with tourists' taxes — hotel guests are charged a nightly state transient rental tax and local tourism taxes. For years, online booking companies have interpreted the law so that they collect taxes for only the wholesale price of the hotel room — not the retail price they charge their online customer. Meanwhile, customers booking directly with a Florida hotel have paid taxes on the full retail price.
The result, in a state already struggling to pay its bills, is an estimated $30 million in lost annual revenue, prompting a series of local government lawsuits against online travel companies. (One filed in federal court resulted in a settlement with 32 participating counties that precludes future lawsuits until 2012 or 2013.)
Florida lawmakers could have fixed this problem two years ago when then-Rep. Janet Long, D-Seminole, first proposed clarifying the law to make clear going forward that online companies had to play by the same rules as hotel booking desks. But rather than do that — or wait on court rulings — Sen. Don Gaetz, R-Destin, is ready to pass legislation letting the online companies off the hook.
Apparently it's fine with Gaetz and the House bill sponsor, Rep. Jason Brodeur, R-Sanford, to let two customers being charged the exact same nightly room rate to have different tax burdens. Even less understandable is why they wish to side with companies based in other states over those that actually hire Floridians — 12 percent of whom are out of work.
Republicans in other parts of the state, including on the Pinellas County Commission, understand tax fairness. Pinellas commissioners voted in 2009 to join one of the lawsuits, recognizing a gross inequity that will only widen as more commerce moves to the Internet. The Legislature should stand for tax equity and sound policy, not special interest favors for out-of-state behemoths.