Online travel agencies are lined up to try to bar cities from leveling hotel-occupancy taxes against intermediaries.
States, too, would be prohibited from leveling hotel occupancy taxes on the OTAs' service fees.
But, under proposed legislation, it would be OK for states and municipalities to continue to collect occupancy taxes from the hotels' themselves.
The Interactive Travel Services Association and members Expedia, Travelocity and Orbitz thus are trying to enlist consumers in their effort to end the spate of cities' hotel-tax lawsuits.
ITSA, an online travel agency and global distribution system trade organization, launched TravelersFirst.org, described as "a new coalition representing millions of users of online travel sites," to push for the passage of the federal Internet Travel Tax Fairness Act.
ITSA says the legislation would end new hotel-tax lawsuits against the OTAs and prohibit the nation's more than 7,000 local tax authorities -- including towns, cities and counties -- from writing their own hotel-occupancy tax laws targeting travel agencies.
The draft Senate legislation states:
"A State or a political subdivision of a State shall not levy or collect any occupancy tax or lodging fee, directly or indirectly, on any facilitation fee paid to a travel agent or intermediary, regardless of the terminology used to describe the occupancy tax or lodging fee or whether such tax or fee is imposed on a transaction or on a consumer, a travel agent or intermediary, or a provider of sleeping accommodations."
Over the last six years, major OTAs have been bogged down in litigation, with dozens of cities, counties and states auditing and suing them to collect what they allege are unpaid taxes on service fees from the OTAs' merchant-model hotel sales.
Visitors to TravelersFirst can submit their zip codes and send the following message to their state's two U.S. senators:
Senator,
I am writing to urge you to SUPPORT the Internet Travel Tax Fairness Act (ITTFA) and to provide us relief from new taxes that impact my vacation and travel plans.
Congress must step in and prevent localities from increasing my travel costs by taxing the services provided by online travel companies who facilitate hotel bookings! In a time when the government should be helping to support demand creating businesses in the tourism industry, consumers don't need yet another tax that makes travel more expensive.
Supporting a tax on a service that sends customers to cash-strapped tourism communities is bad public policy. Online travel companies help hotels fill up their properties and they send travelers like me to spend money in Main Street shops and businesses.
Now, Mayors and City Councils are trying to defy precedent and start taxing these service fees to the detriment of one of the most efficient models of travel distribution on the Internet today. If they succeed, and in addition to raising my online travel costs, online travel sites and local travel agents would be subject to 7,500 different taxing authorities. This would put a huge strain on their ability to continue to provide services to travelers looking for affordable travel options.
Congress can ensure this model of distribution is protected and can stop localities from raising my travel costs.
Please stand with us – the already overtaxed American people – and vote YES on ITTFA.
Thank you.
"Senator,
"I am writing to urge you to SUPPORT the Internet Travel Tax Fairness Act (ITTFA) and to provide us relief from new taxes that impact my vacation and travel plans.
"Congress must step in and prevent localities from increasing my travel costs by taxing the services provided by online travel companies who facilitate hotel bookings! In a time when the government should be helping to support demand creating businesses in the tourism industry, consumers don't need yet another tax that makes travel more expensive.
"Supporting a tax on a service that sends customers to cash-strapped tourism communities is bad public policy. Online travel companies help hotels fill up their properties and they send travelers like me to spend money in Main Street shops and businesses.
"Now, Mayors and City Councils are trying to defy precedent and start taxing these service fees to the detriment of one of the most efficient models of travel distribution on the Internet today. If they succeed, and in addition to raising my online travel costs, online travel sites and local travel agents would be subject to 7,500 different taxing authorities. This would put a huge strain on their ability to continue to provide services to travelers looking for affordable travel options.
"Congress can ensure this model of distribution is protected and can stop localities from raising my travel costs.
"Please stand with us – the already overtaxed American people – and vote YES on ITTFA.
"Thank you."
ITSA says Expedia, Travelocity and Orbitz, their affiliates and other members will promote TravelersFirst on their websites and in their marketing efforts.
At least one national hotel organization, the American Hotel & Lodging Association, vehemently opposes the ITSA-backed federal legislation, although a few statewide associations have expressed support.