Stop the senate from preempting local tax authority

The local news desk at Historic City News reported that during the June 2nd meeting of the St. Johns County Board of County Commissioners, a Resolution authorizing the County Attorney to execute a Employment Contract with four Florida law firms was adopted.

The Resolution seeks representation of the County’s interest in connection with claims and remedies it may have arising out of web-based travel companies who may have withheld tourist development or other county taxes due.

In a June 24th article, also published at Historic City News, we reported that Commissioners in Lee County voted unanimously to pay $2,500 to Nabors, Giblin & Nickerson Law Firm of Tallahassee to represent Lee, Broward and Orange counties in a lawsuit against online travel companies to recover money that they say is due.

At issue is how Internet companies like Orbitz, Priceline and Expedia have been booking hotel rooms for people across the country; specifically with regard to how those companies calculate and remit taxes. To be decided is whether the online companies should pay taxes on what they pay directly to hotels to buy the rooms — or on the higher amount the companies charge customers for those rooms.

Now, the U.S. Senate Finance Committee is considering preempting state and local taxing authority over online travel companies such as Expedia and Travelocity, as part of a proposed “jobs bill”.

In November 2009, Florida’s Attorney General and Chief Financial Officer joined the crusade to enforce existing law and collect these important revenues for Florida and our counties.

On November 3, 2009, following on the heels of Orange, Broward, Monroe and Palm Beach counties, six other counties filed suit against certain internet travel companies, including Expedia and Orbitz, seeking a declaration that tourist development taxes were due and to enforce collection of those taxes.

The counties in the original filing were: Flagler, Lee, Leon, Manatee, Pinellas, and Polk.

St. Johns, Charlotte, Escambia and Hillsborough Counties have since voted to join the suit.

In addition, on November 3, 2009, Attorney General Bill McCollum filed suit on behalf of the State of Florida, seeking similar relief.

Prior to the filing of these suits, Broward, Orange, Monroe and Palm Beach had already filed individual suits – some several years ago. And, Brevard County has recently filed its own suit as well.

All St. Johns County property owners have a vested interest in the outcome of this action since we live and pay taxes in a county driven by tourism.

We are issuing a “call to action” for all Historic City News readers to stop this theft of local tax revenues. Contact Sen. Nelson or Sen. LeMieux today and tell them what these funds mean to our community. Now is not the time to give one industry preferential tax treatment at the expense of St. Augustine, St. Augustine Beach, Ponte Vedra Beach, St. Johns, Hastings and all the remainder of unincorporated St. Johns County.

In our view,

-The proposal will NOT create jobs. Rather, it will cut badly needed funding to local governments, which will result in job losses and service cutbacks.

-According to a report prepared by the Center on Budget and Policy Priorities, State and local governments stand to lose upwards of $8.5 billion annually if the proposal is adopted.

-Hotel tax funds are used to promote tourism, which brings more visitors – and dollars – to local communities. This benefits a multitude of small business – hotels, restaurants, rental car and cab companies, retail merchants, and more. That is why the American Hotel and Lodging Association supports our position.

-Preemption will adversely affect bond obligations that are tied to hotel and motel tax revenues.

-Whether to impose hotel taxes – and at what rate – is a local decision. Congress should not act to give a $50 billion a year industry special tax treatment at the expense of already strained local government budgets.

-No backroom deals! No bill on this issue has ever been introduced in either chamber, no hearings have been held, and no testimony from any local government official has been presented as to the adverse financial effects this proposal would have on local government budgets.