MD Hotel & Lodging Association Supports Govern O’Malley’s Stand on Online Travel Company Inequi

July 25, 2011 - PRLog -- The Maryland Hotel & Lodging Association applauds Governor Martin O’Malley’s continued focus on requiring online travel companies (OTCs) like Expedia, Orbitz and Travelocity to pay their fair share of taxes.

At a time of economic uncertainty, the Association urges other state officials to join Governor O’Malley to resolve this inequity in a way that best serves Maryland taxpayers who play by the rules. The MH&LA echoes Governor O’Malley's observations in the Baltimore Sun last week, that the typical OTC “somehow avoids paying the local hotel room tax.”

As deliberations on this important issue continue in Maryland, there are some important facts to consider:

•   OTCs advertise hotel rooms and charge customers at the same (or higher) retail price as hotels. The final price, which includes “taxes and fees” that OTCs charge customers, is generally equal to (or greater than) the retail price plus tax charged by hotels.

•   OTCs choose to base the tax they remit to jurisdictions on their wholesale cost they pay the hotel rather than the retail sales price paid by their customers.

•   Tax fairness should be a priority in Maryland, requiring OTCs remit taxes on their retail prices, just like hotels. OTCs are pressing for legislation in Congress that would ban Maryland and other states and localities from determining their own occupancy tax policies by granting OTCs a special tax preference over hotels for the identical transaction of booking a hotel room. The MH&LA opposes any federal or state legislation codifying into law the OTC tax remittance practices and granting them special tax treatment.  

•   If fairness isn't enforced in hotel booking transactions, the OTCs’ tax burden shifts to other Maryland taxpayers who have to make up for the budget shortfalls created by the OTCs’ practices.

•   If OTCs are permitted to continue to remit taxes on the wholesale rate, it reduces the revenue available to fund vital government services such as fire protection, police coverage, libraries and schools.  

•   Recently a Georgia judge found that Expedia demonstrated “a conscious and deliberate effort … in violation of state and local law” to avoid paying taxes it owes to state and local governments across the country for its online hotel and motel bookings. Courts in other states, including Texas and South Carolina, have also ruled recently against OTCs tax remittance practices.

David Reel, President and CEO of the Maryland Hotel and Lodging Association states, "Requiring OTCs to remit taxes is NOT a new tax nor is it a tax increase. It is simply addressing a gross inequity where multi-million dollar, out-of state corporations take advantage of an unfair tax loophole."

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About Maryland Hotel & Lodging Association
Founded almost 100 years ago, the Maryland Hotel & Lodging Association is the only statewide association that represents the lodging industry in Maryland. Members of MH&LA range from small family owned roadside motels to large full service convention hotels all of which generate jobs and tax dollars for Maryland. The Association provides government representation on behalf of Maryland’s tourist accommodations and educates members on news and legislation affecting the lodging industry. The MH&LA fosters relationships among the Association’s lodging members and their suppliers to better serve the public and assists all members in expense control and revenue generation through resources such as reservation networks and certificate programs. And, through conferences and seminars, the MH&LA ensures that Maryland’s hotel and lodging industry remains well-informed, well connected, and at the forefront of service in the industry.