Montana Governor rips Travelocity over tax dispute

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 promises of a very quick meeting on the tax issue, perhaps Wednesday with state tax officials.

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.

Schweitzer, like other state and local government leaders, believes that the bed tax should be paid on the full retail amount charged by the Internet companies. He argues those companies are wrongly paying the tax just on the wholesale portion of the room cost that is sent to the local hotel.

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