Florida Attorney General Bill McCollum provided some badly needed leadership when he broke with fellow Republicans to file a lawsuit against online travel firms shortchanging state and local governments on hotel taxes. McCollum recognizes there is an enormous difference between enforcing the tax code fairly and raising taxes. It's too bad Gov. Charlie Crist and legislative leaders haven't acknowledged that distinction.
McCollum wants a judge to rule on the practices of online travel companies such as Expedia and Orbitz that have skirted the state's transient rental tax and local bed taxes for years. The companies, exploiting ambiguous language in state law, only remit taxes based on the wholesale price they pay to the hotel — not the retail price they collect from the consumer. By contrast, when a consumer rents directly from a hotel, the hotel remits the tax on the retail price.
As more consumers book online, the negative impact on tax collections has multiplied. State economists estimate that since 1999, the travel companies' posture has cost $198 million in sales taxes and another $146 million in local bed taxes.
Local governments lobbied the Legislature last year for a fix, only to be outmaneuvered by the travel companies' lobbyists. Now several Florida counties, including Pinellas, have filed legal actions. Chief Financial Officer Alex Sink, a Democrat and McCollum's possible rival for the governor's mansion, called for the state to take action at a Cabinet meeting last month. Now McCollum's effort should help change the conversation in Tallahassee.
Crist, sounding like a mouthpiece for the Internet travel companies, recently expressed concern that any change could lead to higher taxes on tourists. That misses the point that tourists who book directly with a hotel are already paying a higher tax as the law requires.
This issue isn't about raising taxes. It's about collecting them equitably. That's where McCollum now stands — on the side of fairness.