The Maryland General Assembly overrode the governor's veto of
a contentious tax bill this week, enacting a law that will require online
travel agencies to pay a greater share of taxes on hotel sales.
Under the law, intermediaries like Expedia and Priceline must
pay the state's 6 percent sales tax on the full price a consumer pays for
lodging accommodations, including rate markups and fees. Previously, sales
taxes applied only to the amount travel agencies remitted to lodging suppliers.
Last May, Maryland Gov. Larry Hogan vetoed
the bill, but this week, the Maryland house voted 89 to 52 and the state senate
voted 30 to 16 to override that veto.
Critics feared that the bill, ostensibly aimed at online
travel agencies, would impact
other intermediaries, including corporate travel management companies.
The American Society of Travel Agents and The Travel
Technology Association, whose members include the major OTAs, had lobbied
against the bill, while the American Hotel & Lodging Association and
Bethesda, Md.-based Marriott International, along with other hotel companies,
supported it.
This week, ASTA bemoaned that the general assembly's move
will "impose new taxes on fees charged by travel agents for services
provided to their clients." The association noted it would monitor how the
tax is implemented.
The American Hotel & Lodging Association noted
that the action closes a loophole for online travel agencies. "They will
now be required to pay the same occupancy taxes as hotels do,” according to a statement
from AH&LA president and CEO Katherine Lugar.