Taxes are always more popular when they’re paid by someone else, such as, say, television personality William Shatner.
Maybe that’s why R.I. Director of Administration Richard Licht, when asked by reporters to identify whose taxes would rise under new rules for travel websites proposed in Gov. Lincoln D. Chafee’s 2015 budget, jokingly offered the veteran actor, who for years has appeared in commercials for travel website Priceline.com.
Of course Shatner personally wouldn’t be paying the tax, but Licht’s point, aside from identifying Priceline, was that the state isn’t targeting local Rhode Island hotels or travelers, but rather online giants capable of employing a stage and screen icon.
Shatner’s employers, however, argue that taxing them will trickle down to Rhode Island hotel customers, who will be forced to pay more for their rooms here than in other states, even if they don’t know why.
“Ultimately Rhode Island hotels will be more expensive and less competitive with those from neighboring states,” said Steve Shur, president of the Travel Technology Association, a national industry group for travel websites. “That is very important, because leisure travelers are very sensitive to even small differences in price.”
Compared with the size of both the Rhode Island tourism and online travel industries, the amount of money involved in the proposed tax changes is small. The proposed budget estimates $1.4 million in new combined revenue from taxing “hotel resellers” as they call the websites, and extending the hotel-occupancy tax to bed and breakfasts. (State tax officials could not provide a breakdown of how much revenue was expected from those two different sources.)
But the proposal represents the latest engagement between e-commerce businesses and local governments over taxation and regulation. Others include pushes for an online sales tax and collections on virtual marketplaces such as ride shares and room shares.