Earlier today I posted a blog about how the legislature wants to cut all funding to libraries, then I find this. Florida has lost its mind. -cpg
From the Florida Times Unions
by Able Harding
States and local governments are losing roughly $275 million to $400 million in revenue each year because of loopholes exploited by online travel companies, according to a new report by the Center on Budget and Policy Priorities.
The lost revenue involves the "mark-up" charged by online firms such as Expedia, Orbitz and Priceline. These companies snatch up hotel rooms at wholesale prices and pay taxes on that amount. They then mark them up and sell them to consumers, but fail to pay taxes on that amount.
Online companies have been sued by local governments, including the City of Jacksonville, but legislation currently being weighed by the Legislature, which CBPP calls "profoundly misguided," would cement the loophole, in effect costing the state millions in potential revenue. (Read Ron Littlepage's column about it here)
"At a time when sharply reduced revenues are forcing states and localities to cut health care for the poor, lay off teachers, close fire stations, and increase tuition at state universities and community colleges, all of which are reducing economic growth, it is counterproductive to permit OTCs to exploit a tax loophole that pads their profits at the public’s expense," reads the report from the non-profit, non-partisan CBPP. "Room rentals generate over $100 billion in receipts for hotels annually. Given the widespread taxation of these rentals, hotel taxes generate at least $8.5 billion in annual receipts for state and local governments...almost 50 percent greater than what states and localities raised by imposing excise taxes on alcohol in 2008."
A link to the report: http://www.cbpp.org/cms/index.cfm?fa=view&id=3467&emailView=1
A link to a Ron Littlepage editorial: http://jacksonville.com/opinion/blog/401056/ron-littlepage/2011-04-07/city-legal-political-fight-over-bed-taxes
http://jacksonville.com/opinion/blog/403455/abel-harding/2011-04-13/report-florida-among-states-tax-loophole-costing
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