Tennessee lawmakers target hotel tax loophole - WRCBtv.com | Chattanooga News, Weather & Sports

Tennessee lawmakers target hotel tax loophole

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BLOUNT COUNTY, TN (Times Free Press) -- Tennessee legislators are debating whether to change state law in order to collect more taxes from online travel companies.

Proponents say the move will level the playing field between brick-and-mortar hotels and online booking agents while pumping more dollars into local economies. But opponents are calling the bill a misguided effort that will eventually backfire on local officials.

State Sen. Doug Overbey, R-Maryville, and Rep. Art Swann, R-Maryville, are co-sponsoring the bill. Online travel companies work by buying rooms from hotels in bulk at a lower price, then reselling those rooms to the consumer at a higher price, Overbey said.

Under current state law, the online travel companies are only required to pay the hotel/motel tax on the wholesale price they pay the hotel. But brick-and-mortar hotels are required to pay the tax on the price they charge the consumer.

Read more from our news partners at the Chattanooga Times Free Press.

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