Group hopes to raise hotel tax 

A bid has been launched to temporarily increase the tax on San Francisco hotel rooms by 2 percent, and to garner more tax dollars from online hotel booking companies, to aid the deficit-ridden city.

A coalition of community groups that rely on tax revenue to provide services such as education and public health in San Francisco is aiming to place a measure on the November ballot to garner more dollars from hotels and various websites that offer room bookings for visitors.

The Hotel Fairness Initiative has three parts. The most controversial part, a 2 percent visitor surcharge that begins in January and ends in 2014, is drawing ire from San Francisco hotels that say they are already overtaxed during a horrid economy.

Currently, a 14 percent tax on every booked hotel room goes to city coffers. It generated $147 million last year, the Hotel Council of San Francisco said.

An additional surcharge would “discourage business and leisure travelers from coming to our city and spending their dollars here,” said Sam Singer, hotel council spokesman.

The surcharge would “price San Francisco out of the market,” said hotel council Executive Director Patricia Breslin. The group seeking approval from voters for the temporary tax includes a nurse, teacher, parent activist and several community organizations.

“Five million visitors to The City each year are not being asked to shoulder their share of the rising costs for services including public transit, public safety and infrastructure,” the group said in its notice of intent to seek signatures to qualify the measure for the November ballot.

The group says the hotel tax hasn’t been raised in 14 years.

The other two parts of the measure aim to close “loopholes” that allow Internet hotel companies “to evade taxes.” Online booking companies such as Expedia, Hotwire, Priceline and Travelocity purchase hotel rooms at a negotiated rate and then sell them at higher prices. The City wants the companies to pay the 14 percent tax based upon the price for which they sold the room, not the price they purchased it.

The third and final goal of the proposed November ballot measure is to close another loophole that allows airlines to “not pay hotel room taxes they legally owe,” according to the Hotel Fairness Initiative.

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