Make hotels pay their share

While city residents and employees have sacrificed, certain Internet hotel booking sites are trying to evade more than $70 million in legally required hotel taxes
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By Martha Hawthorne

OPINION If you ride Muni, educate your children in public schools, or rely on city services, you've already felt the impact of cuts to the city budget over the past few years, and it could get worse. San Francisco is facing a $522 million deficit this year. It's expected to swell above $700 million in the next two years. Current budget balancing proposals include laying off teachers and nurses and cutting after-school programs, youth job training, street cleaning, public safety, recreation, and health services for San Franciscans and visitors alike.

While city residents and employees have sacrificed, certain Internet hotel booking sites are trying to evade more than $70 million in legally required hotel taxes. Additionally, airline companies that use San Francisco hotels to house their flight crews overnight are attempting to escape paying the hotel tax, depriving the city of millions of dollars in revenue annually.

At the same time, 5 million visitors to the city each year are not being asked to shoulder their share of the rising costs for services including public transit, public safety, and infrastructure. In fact, the hotel room surcharge in San Francisco hasn't increased in 14 years, while costs have skyrocketed. Currently visitors to San Francisco pay the same or lower surcharge than they do in many other large cities, including New York, Los Angeles, Boston, and Houston.

That's why we have come together to create the Stand up for San Francisco Coalition, a group of teachers, nurses, parents, public employees, and concerned citizens who believe the city needs to find new ways to fund our highest priorities. Together, we are headed to the street to collect signatures to place on the ballot an initiative that would close loopholes and make hotels pay their fair share.

This proposed measure would do three things. It would ensure that Internet hotel booking sites pay the full amount of hotel surcharge they owe — bringing millions of dollars each year into the city. It would end a practice by which airlines are attempting to not pay hotel room taxes they legally owe. And finally, it would impose a temporary visitor surcharge of 2 percent, costing the average visitor $3 per night, to support the infrastructure and services that help draw visitors and serve them during their stay, which would sunset in four years.

We are committed to thinking creatively about ways to fix our city's budget problems, beginning with ensuring the city collects what it is owed from big hotels. Our initiative asks visitors contribute a few dollars more per night to help guarantee San Francisco is a city that lives up to its progressive values. In order to save the jobs of teachers, protect HealthySF, care for our seniors, stop service cuts to Muni, and hold the line for public safety, hotels and visitors need to pay their fair share.

Martha Hawthorne, a public health nurse, is a founder of Stand up for San Francisco and one of the official proponents of the Hotel Fairness Initiative.

Comments

"...This proposed measure would do three things. It would ensure that Internet hotel booking sites pay the full amount of hotel surcharge they owe — bringing millions of dollars each year into the city. It would end a practice by which airlines are attempting to not pay hotel room taxes they legally owe. And finally, it would impose a temporary visitor surcharge of 2 percent, costing the average visitor $3 per night, to support the infrastructure and services that help draw visitors and serve them during their stay, which would sunset in four years..."

Boy - you union folks never met a tax increase you didn't like. I gotta admit - I wouldn't support any tax increases in this business environment but there are some reasonable concepts here but the surcharge (temporary??) is a killer.

I wish you could have expanded on these three concepts a little further. I would agree that the hotel tax should be based on the room rate the person paid who stayed in the room not on the rate the wholesaler paid (expedia, e.g.) who in turn sold it to the hotel guest. This is a good idea and I believe it has backing from a technical legal standpoint.

How are airline crews skirting the hotel occupancy tax? If they are not paying the HOT, then yes change the loophole.

The surcharge is a killer. Much of SF hotel demand is generated from convention business and other large groups. The folks who choose the cities for conventions and large groups weigh the hotel tax comparatively in part when choosing which city to host an event. Why make SF less competitive in this lousy economic environment, SF hotels are already hurting? This surcharge drives down occupancy which has the unintended consequence of hurting low paid hotel workers whose hours would get cut as a result.

Thanks for opportunity to comment.

Posted by Guest on May. 24, 2010 @ 2:22 pm

The hotel tax is already too high! I'm not against closing tax "loopholes," but another 2% is ludicrous.

Avalos is a complete opportunist who will take advantage of anyone. He's no "progressive." Look at how he pushed through the $7 Arboretum fee.

Posted by Harry on Jun. 23, 2010 @ 6:37 am