The swines who run online travel agencies are once again trying to screw the hotel industry. Under the innocuous title of The Internet Travel Tax Fairness Act, the OTAs are quietly attempting to slip a bill through Congress that would transfer a portion of their tax liability to the nation’s hoteliers.

“It’s completely outrageous,” says Marlene Colucci, executive vice president, public policy, for the American Hotel & Lodging Association. “If you look at the fine print of this bill, it’s providing tax relief for online travel agencies at the expense of hoteliers.”

The proposed legislation boldly calls for a federally mandated exemption for OTAs on the taxes they should pay to local jurisdictions on the spread between wholesale hotel room prices (what they pay to the hotels) and the retail prices paid by consumers. Should this legislation become law, local tax officials would undoubtedly turn to hotels to make up the shortfall in tax revenues. (Another, even more egregious version of the bill would exempt OTAs from paying any state and local room taxes.) And to add insult to injury, Colucci says another provision of the legislation would prevent hotel companies from setting up their own online travel agencies in order to gain the same tax advantages the OTAs would have.

If the situation is a little fuzzy for you, here is an example of how the system currently works: A hotel wholesales a guestroom to an OTA for $160 a night. The OTA sells it to a consumer for $220, $200 for the room and $20 for a 10-percent local occupancy tax. But instead of remitting $20 to the local taxing organization, the OTA only pays $16, basing the tax on the wholesale price of the room. The proposed legislation would prevent taxing jurisdictions from attempting to collect the extra $4 from the OTA. In that case, all know cash-strapped cities, counties and states will go after the hotels for the difference.

“This is not an issue for Congress, but one for states and localities to decide,” says Colucci. “It’s a question of tax fairness: Your tax liability shouldn’t suddenly become mine.”

The hotel lobby headed by Colucci is working feverishly to shine light on this issue, which the OTA lobbyists hope gets tacked onto some other bill and passes before legislators understand the issues involved. If the proposal can’t be squelched immediately, Colucci at least wants Congressional hearings on the bill.

In the meantime, she and other industry advocates are asking hoteliers to buttonhole members of Congress to voice their opinions on the issue. A phone call or personal visit is best, but if that’s not possible a letter will do. The AH&LA crafted a sample letter members of the hotel industry can use to communicate their views.

Please take action today.