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Missouri Law Protects Travelers From TaxesJuly 9, 2010 By: George Dooley
The Interactive Travel Services Association (ITSA) hailed Missouri Governor Jay Nixon and the Missouri legislature for enacting legislation that protects travelers from occupancy taxes. The Missouri law codifies the existing state process in which local hotel occupancy taxes are collected and remitted by hotels on the amount they charge for a room, not by travel intermediaries such as travel agents, tour operators, or online travel companies on any additional service fees.The bill, HB 1442, was signed yesterday by Governor Nixon. Occupancy tax abuses are being opposed by a variety of groups including ITSA and ASTA.
"We are gratified by the strong action of Governor Nixon and the legislature to protect travel and tourism in Missouri," said Art Sackler, Executive director of ITSA. "Intermediaries such as travel agents and online travel companies play a vital role in bringing visitors to Missouri, and this law will protect their ability to continue to provide that service. With enactment of this common-sense law, Missouri has proven itself again as one of the nation's most pro-tourism states, and its partners in the travel industry look forward to helping show millions of visitors the 'Show-Me State."
The language in the bill reads:
“Notwithstanding any other provisions of law to the contrary, any tax imposed or collected by any municipality, any county, or any local taxing entity on or related to any transient accommodations, whether imposed as a hotel tax, occupancy tax, or otherwise, shall apply solely to amounts actually received by the operator of a hotel, motel, tavern, inn, tourist cabin, tourist camp, or other place in which rooms are furnished to the public. Under no circumstances shall a travel agent or intermediary be deemed an operator of a hotel, motel, tavern, inn, tourist cabin, tourist camp, or other place in which rooms are furnished to the public unless such travel agent or intermediary actually operates such a facility. This section shall not apply if the purchaser of such rooms is an entity which is exempt from payment of such tax. This section is intended to clarify that taxes imposed as a hotel tax, occupancy tax, or otherwise, shall apply solely to amounts received by operators, as enacted in the statutes authorizing such taxes.”
Similar legislation passed the Florida House of Representatives earlier this year, ITSA notes, and other states plan to consider similar legislation to protect local tourism in upcoming legislative sessions.
The Missouri and Florida legislation follow actions by courts around the country to dismiss claims by local municipalities that online travel companies should be forced to pay occupancy taxes on their service fees. Nine of the 10 federal and state courts to have reviewed the issue on the merits – including both courts to decide at the federal appellate level – have agreed that online travel companies do not owe those taxes, ITSA reports.