Travel Agent Tax Fairness Act

Travel Agent Tax Fairness Act

Summary

This legislation establishes a sensible framework to eliminate confusion and controversy in the imposition of sales and hotel occupancy taxes on services provided by travel agents and other travel intermediaries. The legislation clarifies that a travel agent service which helps travelers to research, compare, and book hotel reservations is not subject to those taxes that are imposed on hotel operators for the provision of a room. By clarifying that taxes imposed as a sales tax on a hotel room and/or hotel tax or occupancy tax shall apply only to the amounts received by hotel operators, this legislation will promote continued growth in travel and tourism.

 

Model Policy

Section 1. {Title} This Act may be cited as the “Travel Agent Tax Fairness Act.”

Section 2. {Legislative Findings} The Legislature finds that:

(A) Travel agents and online travel companies provide valuable services to travelers, showing comparisons of rates and amenities offered by multiple, competing hotel operators.

(B) These facilitation services are distinct from the provision of a room by the hotel where the traveler eventually stays.

(C) Travelers rely on community travel agents and online travel agents to research, compare, and book reservations.

(D) Sales taxes on hotel room and hotel occupancy taxes should not be imposed on services provided by travel agents and online travel companies.

Section 3. {General Rule}

(A) Notwithstanding any other provision of law to the contrary, any tax imposed on or collected in relation to any transient accommodations, whether imposed as a sales tax, a hotel tax, occupancy tax, or otherwise, shall apply solely to amounts received by the operator of a hotel, motel, tavern, inn, tourist cabin, tourist camp, or other place in which rooms are furnished to the public.

(B) Under no circumstances shall a travel agent or intermediary be deemed an operator of a hotel, motel, tavern, inn, tourist cabin, tourist camp, or other place in which rooms are furnished to the public unless such travel agent or intermediary actually operates such a facility.

(C) This section is intended to clarify that taxes imposed as a sales and/or hotel tax, occupancy tax, or otherwise, shall apply solely to amounts received by operators, as enacted in statutes authorizing such taxes.

Section 4. {Effective Date} This Act will become effective immediately upon signature by the Governor.

 

Approved by ALEC Board of Directors on September 19, 2010. Adopted by ALEC Communications and  Technology Task Force and the Tax and Fiscal Policy Task Force at the ALEC Annual Meeting on Thursday July 23, 2015 and Friday, July 24, 2015. Reapproved by ALEC Board of Directors on September 4, 2015.