June 22, 2009
The Honorable Byron L. Dorgan
United States Senate
Washington, DC 20510
Dear Senator Dorgan,
Business Travel Coalition writes to offer its full support for the Travel Promotion Act and urges you to include the symbiotically-related Internet Travel Tax Fairness Act (ITTFA) as a manager’s amendment. The travel distribution segment of our industry can be a powerful booster of travel and tourism, but it is currently hamstrung by a growing patchwork of tax authorities around the country that have ill-conceived notions about the economics of the hotel merchant model, which is now squarely at risk.
Some 70% of business travel in the U.S. is driven by small and mid-sized enterprises. These small businesses and entrepreneurs have benefited substantially from online access to and comparative shopping for hotels in every town and city in our country that the online travel agencies have pioneered. In encouraging and facilitating business travel, this business model helps support jobs and sales taxes for small and mid-size communities.
While one tax authority sees the local opportunity to effectively double-tax a business traveler from a distant city, it ignores that its own business travelers could be on the receiving end of such schemes when they travel throughout the country. Not only are the taxation schemes economically counterproductive at the local level over time, but they will have a dampening effect on business travel levels at both the local and national levels. The current hotel merchant model helps small businesses grow and in so doing creates jobs and a variety of purchasing and tax-revenue streams.
To subject travel agencies to potential tax liability in some 7,000 jurisdictions is misguided and anti business growth in the extreme. This is at a time when at the national level we should all be pulling in the same direction to save and generate jobs. A myopic local perspective could easily destroy one of the more innovative and successful business models of the Internet age. The efficacy of ITTFA is that it would centralize taxing authority and prevent local tax authorities from harming the travel industry, their communities and our country.
Having worked with your office in the late 1990s on barriers to entry for low-fare airlines, I know that the business travel community has long-appreciated your leadership and support on key issues. This is one such critical issue for our industry and for all consumers of business travel services, and ITTFA is the right solution.
I hope that you will support ITTFA.
Cc: Allen Huffman