S.B. 190 Veto override: A new tax on travel will harm consumers

A blow against comparison-shopping and a tax increase on consumers and businesses

Travelers United strongly opposes the Maryland General Assembly’s consideration of an override of Governor Hogan’s veto of S.B. 190. The vetoed bill is not only bad for travel and tourism in Maryland but raises taxes on businesses and visitors to Maryland plus, curtails the ability of consumers to comparison shop.

The veto override is strongly supported by Marriott Corporation. They claim that the taxes that will be raised by the bill will level the playing field in the state. However, this bill does nothing of the sort. It actually tilts the playing field in favor of Marriott by making comparison-shopping more difficult and by adding costs to small business travel agents across the state that will be passed onto consumers.

Travelers United is the nation’s largest advocacy organization for the traveling public and has worked for years to limit taxes levied on travelers. These proposed increased travel services taxes are what amounts to taxation without representation for visitors and, worse, a new tax for local businesses in the travel industry. The incidence of these travel taxes will fall on state citizens as well.

In the past, when travel agents sold a hotel room to a customer, the room rate was taxable. This new law now will also tax the travel agents’ service charges in the booking. Every struggling small travel agent, vacation rental operator, tour operator and wedding planner in Maryland will how have a new tax on their services to contend with. These taxes on travel services may be assessed whether the hotels booked are in Maryland or somewhere else.

In a world where travel and tourism dollars spent in local shops, with tour guides, while dining at restaurants, when sailing and boating and for accommodations are considered manna from heaven, it is hard to understand why a legislature committed to no new taxes has managed to do just the opposite. Why discourage the very visitors who bring their money to spend in Maryland before they even get there?

Besides taxing small businesses with a new travel services tax that will affect every person visiting a local travel agent, this tax will also affect Marylander users of the online travel sites that bring millions of visitors to the state through their worldwide reach and advertising. These online agencies sell more than a quarter of room nights booked in Maryland to locals for friends and family or for themselves when visiting other areas of the state. Plus, travel agencies, whether local or online, provide the main platforms for comparison-shopping in the travel world.

Travelers United asks that Gov. Hogan’s veto be sustained. Rather than
harming the ability to comparison shop, and hindering the continued growth of Maryland travel and tourism, the government should be finding ways to make travel to this state more attractive and to work together with travel agents across the country to promote Maryland.