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I'm not sure that Agents are collecting the tax. As a UK agent a get a net rate from the hotel which I mark pu as I see fit. I can bundle this with flights and car hire and make a package. There is a fundamental problem:

1. I do not know that there is a local tax to collect.

2. If I did know they how am I expected to pay the tax collected?

3. US laws do not apply in the UK so and you do set taxes here so why should I care?

The simple solution is to have a fixed tax rate based on the hotels rack rate that they have to pay on every booking regardless of what they sold the room for. An occupancy tax is set on the premis that the occupier is using local resorces. They will use the same resorces regardless of the room price!!

This is a typical ill thought out tax, now they can waste loads of money on a waste of time legal case LOL!

I relation to Jess's response, the online bookers often only take a deposit, the full fee is paid to the hotel directly.

So as others have correctly pointed out, it is the hotel's responsibility to pay the tax, They are operating in the state and they collect the money.

It would also be very hard to implement among many travel sites who use affiliate programs extensively. Am I, in Australia going topay a Houston tax - No way!

Occupancy taxes should be collected and paid by the hotels and not the online bookers. The taxes should be displayed as part of the cost issued by the hotels and then paid to the hotels in full.  Just one simple rule that could have been easily followed to avoid the problem.

I imagine the booking companies need a fee for service but that shouldn't include collecting occupancy taxes and paying it nor should it include keeping part of the taxes collected if that is what is happening.   

Why should a online booking engine like those mentioned be allowed to keep the tax collected instead of it going to the righful source.  IF they did not collect the tax, then that would be a different issue. But since they apparently do collect the tax, then it should go to the local government whose has imposed the tax.  That is only fair and reasonable.

HOWVER several of the online booking engine are tettering on bankruptcy and probably starying alive with that money.  It is not logical that an online booking engine can sell rooms, or airline tickets, or car rental below the rate the hotel, airline or car rental company sells. 

Unfortunately with advent of the internet, and therefore online booking engines, people have the feeling they are saving money, UNTIL there is a cancellation or change issue.  We get calls everyday to help clients who have bought and prepaid for hotels, car rentals, and hotels, and neglected to read that there is NO REFUND if cancelled. 

The online booking engines are losing customers back to "real" travel agents every day.  Once the client gets burned by an online booking engine, they go back to their travel agent.

Lesson to be learned, always use a professional travel agent for business or personal travel, and always buy travel insurance.

During the recent AAmerican AAirlines debacle where the flights were cancelled for serveral days, ALL of our clients were re-accommodated in MINUTES.  NONE of them stood in long lines, certainly none of them were stranded for hours or days.  They emailed us, or called us, and we re-accommodated them on another airline in minutes.

Use a travel agent, save youself some grief, and money!

JESS Kalinowsky

Professional Travel Consultant