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Gov. Schweitzer says Travelocity should pay bed tax

Wed., Sept. 15, 2010

BUTTE, Mont. – Gov. Brian Schweitzer publicly hammered Travelocity leaders Tuesday over a growing tax dispute – the same day the online travel reservation company announced a program aimed at promoting the state.

The Internet travel giant rolled out sponsorship of Montana festivals and highlighted its promotion of the state at the Montana Economic Development Summit in Butte on Tuesday.

Schweitzer took some of the wind out of the announcement by publicly confronting company leaders earlier in the day on the tax dispute. The governor has been increasingly critical of the online travel booking industry for shorting the state on the bed tax for hotels, and fighting other states in court over the issue.

“You have an obligation to pay that tax to Montana and make your books available to Montana,” Schweitzer told the head of Travelocity’s parent company. “This bed tax is pretty straightforward.”

Schweitzer extracted a promise of a very quick meeting on the tax issue, perhaps today with state tax officials.

Sabre Holding’s CEO Sam Gilliland said he expects the issue can be resolved in meetings with Schweitzer’s staff. He said the company believes it has been winning its disputes elsewhere on the issue, and is seeking fewer local bed taxes because of the difficulty in tracking them all.

“We are right on the issue of these hotel taxes,” he told the governor.

Schweitzer said the state has been seeking information from the Internet booking industry with little response. Travelocity countered that it has responded to all letters it has received from Montana.

Gilliland told Schweitzer, during a somewhat tense meeting, that company officials would be in Helena the following day – as long as planes weren’t full of tourists Travelocity was sending to Montana.

Travelocity has seen a big spike in bookings to Montana since it recently launched promotion highlighting tourism events and destinations in the state, Gilliland said.


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