Tax & Accounting Blog

Sales Tax & On-Line Travel Services

Indirect Tax, Sales and Use Tax January 26, 2011

The NegotiatorConnecticut has introduced legislation that, if enacted, would ensure that the sales tax is being paid for the service fee charged by on-line travel service companies who provide hotel rooms at a discounted rate. H 5555 was introduced on January 19th and was referred to the Joint Committee on Finance, Revenue and Bonding on January 20th.

On a similar note the South Carolina Supreme Court recently ruled that service and facilitation fees charged by an on-line travel company for providing hotel reservations in South Carolina were subject to the state sales tax because these fees qualified as gross proceeds derived from the furnishing of sleeping accommodations and the on-line travel company was an entity engaged in the business of furnishing accommodations.