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ASTA Files Lawsuit Against New York City Hotel Tax
Published on: December 23, 2009
ASTA, Expedia Inc., Hotels.com, Orbitz Worldwide Inc., Priceline.com Inc., Travelocity.com LP and the U.S. Tour Operators Association (USTOA) have filed a lawsuit against New York City’s hotel tax, which was introduced in September. The lawsuit aims to stop New York City from taxing online hotel bookings.
The tax on travel agency service fees related to hotel sales for New York City hotels went into effect Sept. 1, despite lobbying efforts by ASTA, ASTA members and hotel allies to have rescinded. The intent of the tax, which ASTA said was enacted without notice or hearing, is to impose a 5 7/8 percent tax on certain travel agency income associated with the sale of hotel space in New York City. The tax applies to the difference between amounts received for booking a hotel room and amounts paid to the hotel operator for the room. It includes “any service and/or booking fees that are a condition of occupancy.”
The only compensation model not taxed by New York City is one in which the agency’s compensation for the sale is pure commission. The tax reportedly affects any party who books or facilitates the booking of hotel rooms through the Internet “or any other means whatsoever.” Such parties had to register with the city by Sept. 4, 2009, on a form provided by the commissioner of finance. The first tax return was due Dec. 20, 2009, for the quarterly period ending Nov. 30, 2009. Thereafter, tax returns were due 20 days from the last day of February, May, August and November. There are no geographical limitations on the application of the tax. It applies to the sale of any hotel room in New York City without regard to where the sale occurred. For more information, visit www.asta.org.
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