Tennessee legislature votes down travel agency tax
The Tennessee legislature has again voted down a bill that would have created new taxes on brick-and-mortar and online travel services.
Tennessee joins a number of other states, including Florida, Virginia, Utah, Oregon, Connecticut, Massachusetts, and New Mexico, that have considered a similar tax over the past two years.
"We hope the bill supporters in Tennessee now recognize that they were led astray by interest groups looking to use public policy as a competitive tactic to impose new taxes on traditional travel agents and online travel companies," said Simon Gros, chairman of the Travel Technology Association, which had lobbied against the bill. "Online travel companies and traditional travel agents are in the business of encouraging travel to places like Tennessee, which creates real jobs and real tax revenue."
If it had passed, Senate Bill 212 would have required all Tennessee-based travel agents who use the fee-for-service model for booking and assembling travel packages to track and pay taxes in multiple taxing jurisdictions. These added compliance costs would have placed particular strain on traditional brick-and-mortar travel agents, who already operate in a business climate marked by extremely low margins, Gros said.
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