Last week Maryland passed a bill that would tax travel agencies around the country on all hotel accommodations booked in the state. The Baltimore Sun reports that the house bill has divided hotel chains and online travel agencies, like Expedia and Orbitz, who would have to apply a 6% sales tax to service fees.
The bill is aimed at closing a loophole that allows online travel companies to pay less in sales tax than the hotels themselves when rooms are booked directly with them. Online companies typically book rooms at a discounted rate but charge the consumer the full price, with the difference taken as a booking fee.
Opponents claim that the measure would be raising a new tax on travel agencies, including brick-and-mortar businesses and smaller operators. The American Society of Travel Agents and Travel Technology Association both oppose the bill. They are concerned that the bill could potentially hurt Maryland’s tourism industry.
If approved by the governor, the bill would go into effect July 1, 2015.