When you stay in a hotel room in Utah you pay a sales tax along with what is called a transient room tax. Hotels remit this tax to the state where it is distributed to the counties to use for promotion of the area, convention centers, and other projects that are aimed at bringing more people into the community to visit. However, when you book a room online you are charged a tax and service fee by the travel company. The tax paid on the room is only for the rate at which the online company pays the hotel for the room. Some counties feel that they are not receiving the full amount that they should in taxes. As a result the state legislature is looking at a couple of options for clarifying the tax code.
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We wrap up the conversation with some final remarks on how the state of Utah could help clarify the law in how taxes are collected on hotel rooms that are booked online.
What are the proposed solutions for online travel companies in paying taxes to the state of Utah?
Option 1: The American Legislative exchange counsel, which would memorialize in state statue the expedia model where the amount of money received by the hotel is the amount that would be taxed by the state.
Option 2: The Multi-state tax commission has a different model that is based on what the customer pays for the room, not what the hotel receives through an intermediary. Under their model, if a customer paid $100 to the hotel intermediary the online travel company then the entire $15 would be due the state of Utah, a portion of that would be paid by the hotel, a portion would be paid by the online travel company.
Option 3: There’s another proposal that would allow the hotel intermediaries to maintain their service fee as tax exempt but it would require them to disclose to the customer at the time of the booking what the cost of the hotel room was, what the service fees were and how much the customer is paying in tax.
Terry Wood discusses the issue of how the collection of the transient room tax is different for online travel intermediaries and the problems it is causing the counties who use the tax to promote the area and to attract more visitors. The guests today are Michael Johnson, Utah Hotel and Lodging Association and Joe Rubin, Interactive Travel Services Association.
What happens when a judge sentences a state inmate directly to a county jail? These prisoners are known as condition of probation prisoners. The problem for counties that house these inmates is that the 50% that the state legislature is supposed to pay to help house the prisoners is continually under-funded.
Some legislators at the state claim that the reimbursement is subject to appropriations and available funding. The counties feel that they are being left to foot the bill that the state should be paying half of.