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Getting Blindsided in the General Assembly

Norm Leahy has another great post at the Tertium Quids blog today, relating how one bill patroned by Arlington County Senator Mary Margaret Whipple (D) -- Senate Bill 452 -- got blindsided in the General Assembly. Sen Whipple’s SB 452 would have changed how retail sales and hotel taxes “are computed based on total charges or the total price paid for the use or possession of the room.”

Norm cites this Virginian Pilot story to ask whether the bill involved a tax hike based on the following:

“Whipple's legislation was directed at online hotel booking companies such as Orbitz and Expedia.com, which book rooms at discounted rates and resell them on the Web. They now pay retail sales and hotel occupancy taxes only on the discounted price they pay the hotel - not on what they charge the customer.

“That's not fair, Whipple reasoned: A customer who books a room directly with the hotel pays tax on the full retail rate. So the Arlington County Democrat introduced a bill, SB452, requiring that the tax be computed on the full price of the room. The measure would also mandate that the tax be clearly delineated on the customer's invoice.

“The bill was approved by the Senate, 40-0, and a House of Delegates subcommittee, 10-0, advancing it to the full House Finance Committee.”

And here’s where the blindsiding comes into play. Responding to one lobbyist who claimed a similar measure has levied such a tax, Sen. Whipple said:

“It is not a new tax," Whipple countered. "The question is, what amount is it levied on? It's not complicated. It's a tax on the retail value of the room. Virginia is losing tons and tons of money because of this loophole."

Norm notes the action of the lobbyists has some folks upset, specifically Arlington County Treasurer Frank O’Leary. Here’s how the Virginian Pilot describes it:

“Arlington Treasurer Francis O'Leary, who suggested the bill to Whipple, said the committee's action will cost Virginia and its localities some $33 million in lost taxes this year - $5 million in Virginia Beach alone - at a time when the state is scrambling to plug a $4 billion-plus hole in the budget and cutting hundreds of millions from public education and health care.

“This stinks," O'Leary said. "These people are stealing our money, and then when we try to get it back, they hire high-priced lobbyists to fight us."

Guess Mr. O'Leary wasn’t at the hearing discussed in yesterday’s Growls when the government officials and their lobbyist marched to the General Assembly to lobby against taxpayers’ interest. Of course, when Arlington taxpayers travel elsewhere, local government officials in those localities happily tell those taxpayers the  taxes collected from Arlington County travelers will reduce their taxes.

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