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This Oughta Be Good

Travel > Stepping over Dollars
 

Stepping over Dollars

The latest thing for state governments is to sue Internet companies for uncollected taxes. Nevada is considering suing Expedia and Orbitz for room taxes. The hotels sell blocks of rooms to these online travel businesses at wholesale rates and the taxes collected/remitted to the state are based on the wholesale prices. The travel companies mark up the prices but the state is not receiving that additional tax revenue to the tune of $200 to $500 million owed.

Some think the travel sites spend tens of millions to promote Las Vegas.

"If the Internet companies were forced to pay more taxes, they would have less money to promote Nevada at a time when the state needs all the marketing it can get, he said.

"That's stepping over dollars to pick up pennies," Bowling said. "These companies are helping us to drive tourism ... in a way that we couldn't otherwise. We need all the faucets on."

But Commissioner Steve Sisolak said there's no way to know how much of the travel companies' fees are used to boost tourism and how much is pure profit.

"You don't know if they're buying yachts, planes and taking trips around the world," Sisolak said.

He also questioned how their actions are considered OK in Nevada if they've been found to be improper in other states."

I think the success of these lawsuits could mean the travel companies will have to hire employees to keep track of the various local tax rates and see that the states get paid. More jobs, right? But you wonder how much of that expense gets passed on to the consumer because surely the company bigshots are not going to give up their yachts and planes.

The Don't Tell Mama Lounge is on Fremont Street East in Las Vegas.

posted on Nov 7, 2009 10:46 AM ()

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