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Politics

Rick Kriseman, AG Pam Bondi Clash on Online-Travel Taxes

September 20, 2011 - 6:00pm

A St. Petersburg Democrat is calling on the states attorney general to require online travel companies, such as Expedia, Priceline and Orbitz, to pay sales taxes on hotel bookings in Florida.

Attorney General Pam Bondi replies the matter is best left to the Legislature.

Rep. Rick Kriseman, who has been exchanging letters on the topic with the attorney generals office this summer, maintains the state has been short-changed $440 million over the past decade by online companies that broker hotel-room deals for travelers.

Like every other business, they have an obligation to pay those taxes due the state, Kriseman said Wednesday from the floor of the Capitol Rotunda.

Former Attorney General Bill McCollum sued Expedia and Orbitz in 2009, accusing the two companies of cheating the state and local governments out of millions of dollars in sales tax revenues from online hotel bookings.

Earlier this year the case was put on hold as a legislative bill was proposed to exempt the travel companies from having to pay the tax.

The bill died.

Meanwhile, the state hasnt restarted the suit, nor does Bondi anticipate doing so as the issue is expected to arise again in the coming session.

The taxation of online travel companies presents complicated policy issues that are best addressed by the Legislature, Bondi stated in a written release. Our office does not anticipate taking any further action in the lawsuit before the Legislature has had an opportunity to address this issue in the upcoming session.

Besides local governments, groups such as the Florida Restaurant and Lodging Association have backed the collection of the tax from the online companies, as has Sen. Thad Altman, R-Melbourne.

Kriseman noted that documents released through an effort in Georgia to collect online travel money indicated the travel companies have worked since 2003 to delay paying the tax nationwide.

Their objective has been, as explained in their own internal documents, to, quote, resist, delay and make it as difficult for any state to require us to collect occupancy tax, Kriseman said. It should be clear to everybody that they owe us the money.

Kriseman contends collecting the money would not be considered a new tax because the state has required retail sales tax to be collected since 1949.

Currently, online travel companies negotiate with hotels to sell available rooms at marked down prices. The companies make a profit by later re-selling those rooms online above the marked down price.

The companies do charge a tax on the price negotiated with the hotel, but not the additional amount charged customers.

Contact Jim Turner at jturner@sunshinestatenews.com or at (850) 727-0859

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