OTAs and Hotel Taxes

Aloha Kakou:

As municipalities see their tax revenues decrease due to myriad reasons connected with the economy, they are turning to On-line Travel Agencies (OTAs) to help make up the difference. OTAs pay taxes to the municipality based on the net (wholesale) rate. Cities are claiming OTAs should be paying those taxes based on the retail rate. Collecting these additional taxes from wholesalers was tried by the city of Honolulu about 5 years ago but the city was not successful.

Take a look at this article which discusses a number of aspects of hotel taxes. Also read about the difference in "taxes and fees" between OTAs on the same hotel room.

http://www.usatoday.com/travel/columnist/mcgee/2009-02-25-hotel-taxes_N.htm