Online Travel Tax Debate Reaches an Appellate Court - WMBB News 13 - The Panhandle's News Leader

Online Travel Tax Debate Reaches an Appellate Court

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Panama City Beach, Fla. -

More than a dozen counties were back in court Tuesday, trying to win a long running battle with online travel agencies. The group appealed a lower court ruling that allows companies like Expedia and Bookit.com to skip out on taxes that the average consumer pays.

17 counties including Walton, Escambia and Wakulla asked the court to overturn a lower court ruling that sided with online travel agencies last year. The court's decision may finally help decide the fate of millions in tourist development tax dollars.

"I believe that the state of Florida is better served if the consumers are being charged the full rate regardless of how they make their reservation," Executive Director of the Tourist Development Council Dan Rowe said.

Right now, companies like Hotwire, Priceline and Bookit.com, negotiate a price with hotels before reselling it to vacationers and the online travel agencies argue they should only pay taxes on the base price, not the resale.

"When it comes to internet transactions and sales tax, that's black and white. That's clear. If you make a purchase for a product, you as a consumer owe that tax to the government. This is a little different," Bookit.com Vice-President Thomas Dibacco said.

If the court overturns the ruling, executives like Dibacco would consider it a new tax, one on the service industry.

"We're trying to provide a service that they are trying to tax. We're not just taking a hotel room and selling it to a consumer, we are packaging hotels rooms from many different sources all on one website," Dibacco said.

But tourism-marketing organizations disagree; they want a level playing field.

 "That increment is not just the tourist development tax, it's all other sales taxes. Whether it's for schools or the state sales tax; that helps fund all the services that we as Florida residents expect," Rowe said.

If the court of appeals sides with the travel agencies, there's a great chance it will end up before the Supreme Court.

It is unclear when the court of appeals will issue an opinion in the case.