March 31 - Industry Letter To MD Governor Hogan Re New Travel Tax


March 31, 2015

 

The Honorable Larry Hogan

Governor of Maryland

Annapolis, MD 21401


Dear Governor Hogan,

We the undersigned travel distributors and organizations that purchase millions of dollars in transient, meetings and conventions-related hotel rooms write to urge you to reject SB190/HB1065, a new sales tax on fees for services provided by travel agencies in the booking of hotel rooms. This new tax would be passed on to corporate, university and government travel departments along with travel agencies’ significant new costs for legal obligations and accounting complexities as well as for audit and compliance requirements.

Travel and meeting managers, including state government travel offices and state universities, are under great pressure to watch every penny of travel spend. All of these administrative costs would be on top of the new tax and would be translated into higher transaction fees from the travel agency to the travel department. As such, a double incentive would have been created to choose a less expensive destination than Maryland, if possible. If not possible, there would be less money to spend in Baltimore or Annapolis on restaurants and entertainment negatively impacting jobs and economic activity.

Not only would this bill result in downward pressure on demand for lodging properties of all sizes, it would do harm to Maryland’s 1,100 travel agencies most of which are small businesses endeavoring to scratch out a living for themselves and their employees. Smaller agencies simply do not have the infrastructure to handle these kinds of requirements and many would not be able to compete with larger agencies that do. So, the playing field would get tilted in favor of the largest agencies.

We expect that you understand very well the incentive new taxes and administrative costs would provide our and other organizations to reconsider the great state of Maryland as a business travel destination.

Sincerely,

American Express Global Business Travel

Independent Lodging Industry Association

Teamsters National Airline Division

American Society of Travel Agents

Business Travel Coalition

HICKORY GLOBAL PARTNERS

World Travel, Inc.

Tower Travel Management

Stephens

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