Florida: How Much Tax Do Online Travel Companies Owe?
- Oct 7, 2014 | Gail Cole
More than a dozen counties in Florida have taken online travel companies (OTCs) to court over underpaid hotel occupancy taxes.
For years, the industry standard in Florida and many other states was for OTCs to charge tax on the wholesale rates the travel companies pay to hotels for blocks of rooms, not the retail rates paid to OTCs by consumers. OTCs would prefer to keep taxing at the lower rate, while local governments in Florida would like the additional tax revenue the higher rate would generate.
The debate has been brewing since online travel companies first started remitting taxes in Florida. Businesses are taking sides, with the Walt Disney Company lobbying on behalf of OTCs and Marriott International lobbying on behalf of local governments.
To date, lower courts in Florida have taken the side of travel companies but local governments have not conceded loss. The Florida Supreme Court has taken the case, which has been designated as a high profile case, but has yet to render a decision. Should the Court rule against the OTCs, they could be held liable for a significant amount of back taxes.
The case is Alachua County et al. v. Expedia Inc. et al., case number SC13-838, in the Supreme Court of Florida.
How does your business handle transaction taxes? Learn how automated sales tax as a service works.
photo credit: Boston Public Library via photopin cc
