Travelocity seeks clarification in tax dispute

2010-09-22T16:44:00Z 2010-11-08T18:04:16Z Travelocity seeks clarification in tax disputeThe Associated Press The Associated Press
September 22, 2010 4:44 pm  • 

HELENA — Internet travel giant Travelocity said Wednesday that Gov. Brian Schweitzer has misrepresented the ongoing tax dispute with the online travel industry.

In a letter sent to the governor, the company responded to what it described as inaccuracies with claims made by Schweitzer. The dispute began when Schweitzer said he believed Internet booking agents were shortchanging the state on the bed tax charged on lodging.

He tasked state revenuers with the job of going after the industry.

The governor also hammered Travelocity leaders in front of reporters last week when the company came to Butte to announce a program aimed at promoting the state.

The company wrote in its letter that it was a "baseless" allegation for Schweitzer to claim its promotion deal was aimed at offsetting tax liability.

The two sides are also disputing who first broached the topic of whether Travelocity had received a confidential enforcement letter from the Montana Department of Revenue.

Schweitzer argued that the booking industry is not fully paying the lodging tax because it only pays the tax on the "wholesale" amount of the transaction sent to hotel. He said it should pay the tax on the full retail amount charged the customer.

The online travel industry, which has been fighting similar claims from other states and local governments with such taxes, argued the lodging tax should only be charged to the hotel operators.

The company said it will be in Helena next week to meet with the Department of Revenue on the issue.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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