Win for Agents: Connecticut, Tennessee Hotel Tax Proposals Die

ASTA is praising its members for their grassroots efforts in the wake of decisions by both the Connecticut and Tennessee General Assemblies not to move forward with bills to impose occupancy tax on fees charged by travel agents and other intermediaries for hotel bookings made in those states.

ASTA reports that HB 5420, in Connecticut, would have imposed a 15-percent tax on agents’ fees, while in Tennessee, HB 3319 would have imposed a tax that varies statewide, but averages six percent, on agents’ fees. While both Assemblies have yet to formally adjourn, the apparent defeat of these bills continues ASTA’s successful run against anti-travel agent tax provisions at the state level.
 
“Unfortunately, as state governments come under strong pressure to address budget shortfalls, the travel industries has become a target for anti-competitive taxes that threaten to undermine states’ overall tourism industries, as well as their budgets,” said ASTA CEO Tony Gonchar. “Thanks to the exceptional hard work of ASTA members and our allies at the grassroots level, we have been able to convince legislators not to pursue these proposals, saving local travel agents thousands of dollars in onerous and harmful new taxes.”
 
In a letter to the leadership of Connecticut’s Joint Committee on Finance, Revenue and Bonding, which was considering HB 5420, ASTA wrote:
 
"Connecticut travel agents already have to pay federal and state taxes on this income and, if HB 5420 were to be enacted, it would be taxed a third time. …We also believe that HB 5420 would have a negative impact on Connecticut tourism in general. Taxing fees collected by travel agents and other intermediaries creates a disincentive for those companies to spend their valuable resources to bring travelers to the state," ASTA said.
 
In working against these bills, ASTA reports it worked closely with allies such as the Interactive Travel Services Association (ITSA), Priceline.com and others and garnered strong grassroots support from travel agencies in both states, supplying them with a variety of tools to assist them in successfully making their voices heard by state representatives.

For example, in Connecticut ASTA member Jeff Sonenstein, president of Globe Travel Service (Bristol, Conn.), testified before the Joint Committee on Finance, Revenue and Bonding, noting “had [I] to pay an additional tax on these fees, I can tell you with certainty that this would either force me to change the way I run my business or get out of the business of facilitating hotel stays entirely. ...Paying an additional tax of 15 percent on top of the taxes I already pay would be nothing short of devastating.”
 
For additional information, contact Eben Peck, vice president of government affairs, at [email protected].

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