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TOURISM

Solution sought to tax feud between Florida cities, travel websites

State CFO Alex Sink is pressing for a resolution to a tax dispute between online hotel booking companies and Florida municipalities.

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Herald/Times Tallahassee Bureau

The big-money battle between Florida counties and online hotel booking companies reached the apex of state government Tuesday, but there's still no solution in sight.

Only Chief Financial Officer Alex Sink expressed an urgency to resolve the long-running dispute.

For nearly a decade, online bookers such as Orbitz, Priceline and Expedia have successfully mined the Florida tourism market, buying blocks of hotel rooms and marking up the cost to consumers. But the booking firms pay sales and local tourism taxes on the wholesale price of the room, not the full price charged to consumers.

More than a dozen cities and counties have filed or are considering lawsuits, claiming the online booking industry refuses to pay hundreds of millions of dollars in taxes owed annually. But online companies say they should not be required to pay taxes on the full price of the room since they are providing a service that helps attract millions of tourists to the state every year.

STRAPPED FOR CASH

``The OTCs (online travel companies) are acting as an independent service provider who's ultimately engaged and paid by the consumer. They are a resource for the consumer,'' Richard Leavy, a New York lawyer representing Orbitz, told the Cabinet. ``The tax as it currently exists should not be imposed.''

Counties, strapped for tax revenues because of the real estate slump, say bookers use misleading billing to hide the room's true cost, while mom-and-pop hoteliers who rent rooms directly to visitors pay the full amount of tax owed. The counties' special tax counsel, Sarah Bleakley, described the bookers' billing practices as ``very deceptive.''

Sink, the only Democrat on the Cabinet and a candidate for governor, placed the issue on Tuesday's Cabinet agenda, saying a resolution has languished far too long.

``I'm just interested in fairness,'' Sink said. ``I'm certainly not interested in seeing the online companies pocket our money, if that's the case. I do believe our lawyers ought to figure out a plan of action.''

WAITING FOR DIRECTION

The Department of Revenue, which enforces tax laws, has refused to say which side is right and has waited for clear direction from the Legislature, which has refused to act.

Gov. Charlie Crist, a Republican candidate for U.S. Senate, characterized the effort to collect money from online rentals as an additional tax on visitors. ``It would concern me if this panel moves in a direction of trying to add an additional burden or tax on those who want to travel to the Sunshine State,'' Crist said before taking a shot at counties for refusing to rein in spending.

Steve Bousquet can be reached at bousquet@sptimes.com

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