Council members say customers who book D.C. hotel rooms through those sites pay the city's full 14.5 percent tax, based on the price the customer pays for the room. But if the online services paid less for the room in the first place, they pay the city tax based on the lower price, and reportedly pocket the difference, reports the Washington Post:
"If you buy a room online for $100, but it only costs them $90, they charge the tax on $100 but keep the [tax] on the $10 difference," said [Michael A.],Brown [I-At Large].... "They charge the full tax, but keep a portion meant for the District."
Brown introduced the legislation headed to the Council Tuesday, which would require vendors to pay D.C.'s hotel tax based on the price customers actually pay for hotel rooms.
A rep for the online travel industry told the Post that the legislation would reduce the number of people booking trips to the District, potentially endangering jobs at local hotels and restaurants. Andrew Weinstein, spokesman for Interactive Travel Services Association, also told the Post that it's not true that the travel sites keep a portion of collected tax revenues.
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