Tags

, ,

According to a story published in The New York Times, tourists visiting New York State who book their hotel rooms through travel agencies and Web sites like Expedia or Orbitz may face higher prices after state lawmakers passed legislation requiring the booking industry to collect sales tax on lodging.

At the moment, travel sites buy hotel rooms from hotel operators at a price that includes the 4 percent state sales tax. They make the rooms available to consumers at a higher price, but no sales tax is collected on the difference in price. The new provision, which takes effect on Sept. 1, eliminates the loophole.

The state anticipates that the tax will generate $10 million this fiscal year, said Erik Kriss, spokesman for the state budget division.

A travel industry trade group predicted that the cost of the sales tax would be passed on to consumers in the form of higher rates and would prompt at least some visitors to reconsider coming to New York.

According to the legislation, “room remarketers” like Travelocity enjoy a financial advantage over hotel operators who use conventional reservation tools like their own Web sites.

Advertisements