Lawmakers in Annapolis approved legislation Wednesday that would make online travel companies pay more tax on Maryland hotel bookings. Whether it becomes law remains to be seen.
Proponents say the bill would close a loophole in Maryland law that allows online travel companies to pay less in sales tax on hotel bookings than the hotels themselves must charge when the same room is booked directly with them.
The online firms often book rooms at a discount from the hotel's posted rate, but charge the consumer the same price, with the difference collected as a booking fee.
"They are bilking the taxpayers of Maryland. That is unfair," Del. Eric G. Luedtke, a Montgomery County Democrat, said.
The bill calls for levying sales tax on the price the consumer actually pays for the room.
But opponents complain the measure would in effect be levying a new tax on travel agencies, both online and brick-and-mortar businesses.
Republican House Minority Whip Kathy Szeliga cautioned that the measure could harm the state's travel agents, and argued unsuccessfully that it constituted a new tax on the tourism business.
Hogan spokesman Matt Clark said the governor has not decided whether he views the bill as closing a loophole or raising a tax on travel companies. And while Hogan has not determined whether he plans to sign the bill, Clark said, "we've been very clear about our feelings on tax increases."
Clark also said the governor was weighing the impact of an ongoing lawsuit over $6 million that Maryland's comptroller contends the online firm Travelocity owes the state.