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Thursday, January 21, 2016

Ind. Gov't. - "Indiana could tax online travel sites"

Updating this ILB post from Jan. 18th, on SB 309 and the Orbitz case (re whether online travel sites are subject to sales tax and on what basis), which was argued 2 years ago and is awaiting a decision from the Tax Court, Tony Cook of the Indianapolis Star has a story today on the Senate Tax & Fiscal Policy Committee hearing yesterday on the bill. Some quotes:

Travel websites such as Travelocity and Expedia would face higher taxes under a proposal pending before Indiana lawmakers.

Senate Bill 309, introduced by Sen. Brandt Hershman, would require those companies to pay sales and innkeeper’s taxes in Indiana, generating an estimated $18.7 million for state and local governments over the next two years.

Supporters of the measure, including traditional hotels and local tourism officials, say it would make taxes fairer as travelers change how they purchase hotel rooms. Opponents say the bill is essentially a new tax that ultimately would be passed on to consumers. * * *

But the issue that garnered the most discussion during Tuesday’s hearing involved online travel websites.

“Today unfortunately there is an unlevel playing field with some of these players in the short-term online arena,” said Patrick Tamm, president of the Indiana Restaurant & Lodging Association, which represents hotels. “We have to pay all our taxes, and we do so willingly. This is simply making sure people pay their appropriate taxes.”

But opponents argue that travel websites are more like travel agencies than hotels.

“This is a new tax in Indiana,” said Steve Shur, president of the Travel Technology Association, whose members include Airbnb, Expedia, Hotwire, Orbits [sic.] and Priceline. “These taxes will ultimately be passed on to the consumers.”

The Senate Tax & Fiscal Policy Committee plans to take a vote on the issue at a meeting next week.

Posted by Marcia Oddi on January 21, 2016 08:58 AM
Posted to Ind. Tax Ct. Decisions | Indiana Courts | Indiana Government