Much has been written about proposed legislation regarding how hotel taxes should be calculated for bookings through online travel agencies ("A room with a tax," Feb. 18).
Depending on who you listen to, these bills are designed either to close a loophole or to raise taxes.
The answer is very simple and has not yet been articulated: Follow the money.
If the online travel agency is merely facilitating a booking but is not collecting a prepayment of funds, the responsibility rests with the hotel to charge and remit the appropriate tax.
If, on the other hand, the agency collects the money from the customer to be remitted to both the hotel and the state, then the tax — whether included on the initial booking screen or added as a supplement to the quoted room rate — must accord with the hotel booking and be applied to the total rate paid by the guest.
Again, If the agency is collecting the prepayment for a room that either includes tax or is subject to a separate tax, the tax is applicable to the amount of prepayment not to some other amount, be it the actual cost of the room to the agency or some other arbitrary amount. Follow the money!