Voters in Anaheim, California, will decide Nov. 8 on Measure J, which would require online travel companies to be taxed as much as hotels whenever a room is booked.
Typically, hotel guests in the city that book a room through an online travel agency, like Expedia or Travelocity, pay less tax than directly booking through the hotel.
That’s because the online seller only has to tax consumers at the wholesale rate—for which an online agency purchases a hotel room—rather than the higher retail price of a nightly stay at the room.
Anaheim has a 15 percent hotel tax. If an online agency, for example, pays a wholesale price of $100 for a night at a hotel room and sells it for $200, the company only pays the 15 percent rate of the wholesale price, in this case, $15.
The Anaheim City Council put the measure on the ballot in July with a 6–0 vote.
The city’s spokesman Mike Lyster said the council supports the measure because the tax would be the same for all companies selling hotel stays.
“We know no one likes taxes,” Lyster told The Epoch Times. “But if you’re going to have them, then they should be evenly applied.”
Lyster compared the measure to how purchases at grocery stores are taxed. Consumers pay taxes based on the retail price of the products they buy, not the wholesale price the store pays when restocking.
“[Measure J] is really an update of our tax code because it’s outdated and was written before there were even online travel companies,” he said.
Anaheim’s main source of revenue comes from its hotel tax thanks to its 25 million visitors per year, according to Lyster.
The measure is estimated to generate an extra $3 million annually, which would add to the city’s projected $167 million hotel tax revenue—the amount made last fiscal year—Lyster said.
The hotel tax accounts for about 50 percent of Anaheim’s income—with 30 percent supporting staffing for the police and fire departments and other city services and 20 percent paying off bonds issued in the 1990s to expand the resort area.
No one has filed in opposition to the measure.
