Rolling Meadows tries to get online travel companies to pay hotel tax
Following the lead of a neighbor, Rolling Meadows has amended its 8% hotel/motel tax to make sure online travel companies pay the full tax on the price they sell rooms for.
The ordinance approved unanimously by the city council this week is modeled after one passed by Schaumburg trustees in April.
The regulations aim to capture the tax on fees travel websites charge consumers for booking hotel rooms.
Alderman John D'Astice, who also works as director of sales and marketing at Embassy Suites Chicago North Shore Deerfield, said hotels already charge the full tax to customers, whether a room is booked online or by phone.
He said going after the online booking firms won't increase charges to the consumer or put the city at a competitive disadvantage.
"All it's going to do is the Expedias and Orbitzes and Travelocities of the world will now have to pay the tax they've been pocketing this whole time," he said.
Rolling Meadows, which is home to four hotels, and Schaumburg, which has 30, were part of a 2013 class-action lawsuit that sought back taxes from online travel companies. The municipalities didn't prevail, but Schaumburg officials said the companies have committed to complying with local hotel/motel taxes in the future if language specifying their responsibility is included in a local ordinance.
The Rolling Meadows ordinance says online travel companies, like hotels, have the duty to collect taxes from tenants and file a monthly tax return along with payments to the city. The rules stipulate the companies have to keep records of hotel taxes collected for three years, and have an agent to receive written communication from the city regarding the tax.
City officials did not have an estimate of how much revenue the city could realize with the additional tax collections.
• Daily Herald staff writer Eric Peterson contributed to this report.