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HomeMy WebLinkAbout2010-07-13; City Council; Resolution 2010-1831 RESOLUTION NO. 2010-183 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, OPPOSING ONLINE TRAVEL 3 COMPANIES ("OTCs") EFFORTS SEEKING FEDERAL , LEGISLATION THAT WOULD LIMIT STATE AND LOCAL GOVERNMENTS ABILITY TO COLLECT TAXES 5 WHEREAS, many hotels contract with online travel companies ("OTCs") in 6 order to increase the occupancy of their hotel rooms, and provide OTCs a discounted 7 rate for each room they book online; and 9 WHEREAS, OTCs charge consumers the full retail rate of a room and 10 collect taxes based on that retail rate and typically charge consumers a processing fee; 11 and 12 WHEREAS, OTCs collect taxes based on the full retail rate that the 13 consumer pays for the room, but they only remit to state and local governments hotel 14 occupancy taxes based on the discounted rate of the room and pocket the difference; and 16 WHEREAS, the minimum annual revenue loss that state and local 17 governments are estimated to realize from OTCs will exceed $1 billion and increase to18 $8.5 billion if hotels, in order to avoid being left in a competitively disadvantaged 20 position, adopt the OTCs' business model of booking rooms online and pocketing a 21 portion of local revenues; and 22 WHEREAS, many local governments have filed lawsuits and initiated other 23 collection actions against OTCs to compel them to submit taxes to local governments 24 based on the full retail room rate charged to the consumer, and more than 40 lawsuits 25 are pending nationwide along with an unknown number of administrative collection 26 efforts ; and 27 28 WHEREAS, OTCs are seeking federal legislation that would limit state and 2 local governments ability to collect taxes from OTCs by not only exempting OTCs from 3 remitting taxes based on the full retail price of a room but may also exempt the payment 4 of any hotel occupancy tax on rooms booked by OTCs. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of 6 Carlsbad, California, as follows: 7 1. That the above recitations are true and correct. o 9 2. That the City Council of the City of Carlsbad urges our congressional representatives to oppose any legislation that would grant OTCs a tax exemption that 10 terminates existing obligations, or bars future obligations to pay hotel taxes to state and local governments, or otherwise restrict legal actions filed by them. 11 3. That the City Clerk is directed to send a copy of this resolution to U.S. Senators Dianne Feinstein and Barbara Boxer and Congressman Brian Bilbray. 13 // 14 // 15 // 16 „ 17 // 18 // 19 20 21 22 " 23 " 24 // 25 // 26 // 27 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 13th day of July, 2010, by the following vote to wit: AYES: Council Members Lewis, Kulchin, Hall, Packard and Blackburn. NOES: None. ABSENT: None. ATTEST: IORRA\NE(SEALV OOD, City Clel<