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Hotel Lobby Misrepresents ALEC Model Policy in Testimony Supporting New Taxes on Services in Ohio


Steve Shur on August 14, 2019

In May 2019 the Ohio Hotel & Lodging Association (OH&LA) submitted testimony to the Ohio Senate Finance Committee. While claiming to “leveling the economic playing field”, in reality OH&LA argued instead for increased taxes on travel agent service fees.

As part of their misinformation campaign, they purposely misrepresented ALEC’s model policy on the taxation of travel agent service fees in their testimony.

ALEC has model legislation that clarifies the tax base in lodging transactions, the Travel Agent Tax Fairness Act.

The model policy is clear on the taxable base in a hotel booking transaction involving a travel agent, both online and in the community. The tax should be calculated on the amount the hotel (the operator) receives.

Yet, the Ohio Lodging Association purposely misrepresented ALEC’s position on this by claiming that the taxable base should include the travel agent service fee.

ALEC Online Lodging Marketplaces – Issued 2018

Model language specifies that with respect to any lodging transaction, the booking platform will remit the applicable tax to the state agency. It reads: “This section clarifies tax is applied to amount consumer pays… not “net amount received by [operator].”[IH1] [SS2] 

The hotel lobby also ignored ALEC’s March 2018 “The State Factor” on online sales taxes, which notes: “Businesses lacking a ‘substantial nexus’ or link to a state through a ‘physical presence,’ cannot be forced to adhere to that state’s sales tax collection and remittance requirements.”

The national American Hotel & Lodging Association (AH&LA) consistently attacks short-term rentals and OTAs by engaging in questionable tactics to limit competition, decrease choices for consumers and pad their own pockets.

But the hotel industry forgets that their work with OTAs is a partnership — and that OTAs have been proven to bring greater numbers of tourists to local destinations, as well as improve bottom lines for small businesses and local economies across the country.