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House Co-Sponsorship Memoranda

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House of Representatives
Session of 2017 - 2018 Regular Session


Posted: May 23, 2017 01:32 PM
From: Representative Marguerite Quinn
To: All House members
Subject: Collection of Hotel Occupancy Tax From Online Travel Companies
In the near future, I intend to introduce legislation to update and clarify the collection of the hotel occupancy tax from online travel companies (OTC’s).

Online travel companies, such as Orbits, Travelocity, Expedia, to name a few, contract with hotels to purchase rooms at a mutually agreed upon wholesale price. These rooms are then resold on line to the consumer.

Traditionally, when a hotel room is sold to a consumer, the hotel collects and remits the state sales tax and the local hotel occupancy tax (where applicable) on the full retail rate charged for the room. Currently, OTC’s collect and remit the sales tax and hotel occupancy tax on the room rental rate they negotiated with the hotel, not the full rate that the consumer pays.

This legislation would level the playing field by applying the state sales and the local hotel occupancy tax to the full price paid by the consumer at point of sale for booking the hotel room, inclusive of any additional fees or markups that an online travel company charges customers for booking the hotel room.

This legislation would also serve to facilitate the modernization of the Pennsylvanian Tax Code. When Part V of the Tax Reform Code of 1971 was written, the imposition of an occupancy tax (aka “excise” tax) of 6% on the rent charged for the occupancy of a hotel room, the internet and OTC’s did not exist. By closing this unanticipated loophole in the Tax Code, this legislation would revive the original intent of the General Assembly and restore an impartial application of the Code across the entire industry.

Travel related organizations throughout the Commonwealth, such as the Pennsylvanian Restaurant & Lodging Association, Visit Pittsburgh, the Greater Philadelphia Hotel Association, Visit Philadelphia, the Philadelphia Convention & Visitors Bureau, and the Pocono Mountains Vacation Bureau support this legislation.

I hope you will join me as a co-sponsor.

Introduced as HB1511