The Montana Lodging and Hospitality Association with Destination Missoula are pushing back against opposition to a bill intended to apply the same rules on tax collections for all travel partners, including national platforms like Airbnb and Expedia.
The Travel Technology Association last week voiced opposition to Senate Bill 52, saying it would place “new taxes” on online travel agents, including Orbitz, Expedia, Priceline and Travelocity.
But Whitney Bergmann, board chair of the Missoula Tourism Business Improvement District and a representative of Destination Missoula and the Montana Lodging and Hospitality Association, said the technology association was mispresenting the bill.
It isn’t a new tax but rather, an update of language initially written before the digital age, she said.
“It requires an update of the lodging tax language that makes it clear that it’s applicable to anyone selling lodging rooms in Montana, where the large platforms have been able to occasionally skirt that at times by virtue of language that was written in the 90s without them in mind,” Bergmann said. “It’s really just a clarification of language, that the existing lodging tax applies to everyone, from hotels to large hosting platforms like Airbnb.”
The bill sailed through its respective House and Senate committees this month and is set for final preparation. Once signed into law, the measure will revise the state’s lodging facility use tax and Montana’s sales tax on lodging and care rentals.
It will also require all travel agent platforms to collect and remit those taxes to the state, including digital travel agents.
“They will be responsible for the collection and remittance rather than having that fall on the local property owner,” said Bergmann. “Because their platform didn’t have that built in, necessarily, you have a lot of onus on the property owner on how that’s managed and applied. This makes it so that’s uniformly applied to the platform rather than the property owner.”
Many travelers book trips through online agents like Travelocity and Expedia, making them responsible for hundreds of thousands of bookings in Montana each year.
Steve Shur, president of the Travel Technology Association, believes the measure will tax those agents fees, thus making Montana more expensive as a destination. For the state’s hotels, bed and breakfasts, and lodging establishments that partner with those agents, the tax could make distribution more costly, the lobby group contends.
“New taxes that increase travel costs will deter visitors and make Montana residents travel to other states, forcing the state to miss out on recovering some of the $4.9 billion spent by tourists in Montana,” Shur said.
“This new tax will also put Montana’s recovery behind other states, and the state will not realize the tax windfall of travel demand when our nation turns the corner on the pandemic and begins to see economic spending approach pre-pandemic levels.”
Bergmann disagreed, saying the association’s description of the measure as a “new tax” is misleading. The tax has been in place for decades, she said, and the new bill just modernizes the language and applies it evenly to all travel groups.
“It’s intended to create uniformity for the Department of Revenue,” she said. “It has language that’s not clear in terms of how they can enforce and how collections and remittance should look. That language update is intended to provide DOR clarity.”