St. Pete Beach, Florida -- The folks at Trade Winds Resort on St. Pete Beach don't mind the extra marketing they get through online travel sites like Expedia and Orbitz, but they do have an issue when it comes to the tourist development taxes they pay...or not pay, as they claim.
"It doesn't make sense to us that a marketing entity that we turn to to market our product would have a competitive advantage and be able to sell our room for less than we have to sell the room for by not having to pay the tax here," said Trade Winds CEO Tim Bogott.
Many point out that Florida's tax laws are not clear and have essentially allowed some businesses, including online travel companies, to avoid paying tourist development taxes on what they say is the difference between what the companies pay for a room and what you ultimately pay.
The so-called "Expedia" bill, which was passed by the House on Monday, would allow the online travel companies to continue the current practice, including anyone or business that facilitates the rental of a property for six months or less.
Bogott used the example of a $150 room that they might sell on their own website and make an agreement with an online travel site to facilitate the sale for $100. The travel site would pay the 5% bed tax for Pinellas County on the $100 room and then sell it to you for $150. That leaves $50 with no taxes paid, which Bogott says should be taxed.
Travel companies like Expedia argue that $50 is a service fee and should not be taxed and never has been and the lawmakers voting for the bill clearly agree.
Brian Hoyt, VP of Government Affairs with Orbitz says the fee is charged to facilitate the booking of the rooms and that they do not buy and resell hotel rooms.
He wrote that this affects more than just Orbitz, and that the bill is supported by hundreds of other FL offline travel agents and tour operators who operate under the same business model.
He says, "They, along with Orbitz, are also impacted by cash strapped localities attempting to attach transient occupancy taxes to the service fees we charge."
But some local hotel operators continue to disagree.
It's not just his business Bogott is trying to stand up for, it's also the community. Bogott also serves on the Tourist Development Council for Pinellas County, which he says is also a loser in this situation because a large portion of bed tax revenue goes back into to the community for marketing to attract people to the area.
He's also concerned about the sales tax the companies are not paying on that difference between the price they would sell the room for and the price the travel sites charge.
The Pinellas County Tax Collector estimates the losses to Pinellas County as a result of the online companies not paying on the difference at about $2 million each year. The loss to local governments statewide are estimated at about $30 million.
Hoyt also countered this by writing, "Pinellas County is playing a numbers game with you. They are using numbers that assume all these hotel rooms are booked, but the truth is these hotels come to companies like Orbitz to help promote their properties to help them book rooms that otherwise would go empty. And we promote the heck out of these localities down to the property level (from free PR to Google links to TV advertising) using revenue we generate from the fees we charge."
He noted that the hotels do not pay them a commission to promote the rooms.
Still, there are several pending lawsuits that have been filed by local governments against the online travel companies to recoup what they consider to be bed tax losses.
A memo released by Rep. Rick Kriseman's (D-St. Petersburg) office shows companies like Expedia have been putting money into a reserve in the event they'll have to one day pay what they "may ultimately owe."
Rep. Kriseman is opposed to the bill, saying the documents indicate "the online re-sellers knew, back in 2003, that they owed the taxes to the state, and have been purposefully and intentionally failing to pay these taxes, hoping they won't be sued before they could change state law."
The Pinellas County Attorney's Office tells 10 News its lawsuit against the online retailers is pending, however the office hopes to find out within the next few months whether the case will go to trial.
We did not speak directly to the Senate sponsor of the bill, Sen. Don Gaetz (R-Destin). However, his office tells us the bill is still in a budget committee, which has no other meetings scheduled for the rest of the session.
An office aide says it will be hard to move the bill unless the Senate president decides to do so or if it's moved to another committee.
Greg Nichols, with the Sirata Resort on St. Pete Beach, says he thinks it's a good possibility it will make it to the Senate floor before the end of the session on Friday and pass.
"Don't underestimate him to get it passed if he wants it," said Nichols.
A similar bill failed last year in the Senate.