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The royal rulers of Chandler seem to think that we are slaves they own, and they can take a cut of every penny we earn.
Chandler joins legal fight vs. online travel firms over sales taxes by Amy B Wang - Oct. 3, 2012 06:29 AM The Republic | azcentral.com Chandler has joined a growing group of Valley cities that are turning to legal action to recoup sales taxes they allege online travel companies haven't paid. In mid-September, the City Council voted 5-2 to hire the law firm Holm Wright Hyde & Hays to recoup about $131,000 in unpaid taxes that city officials say is owed. The figure is based on a preliminary audit of several Valley cities headed by Tempe. The audit alleges about $8 million in unpaid taxes are owed to Valley cities by at least four online travel companies, including Expedia, Orbitz, Priceline and Travelocity. Currently, if an online travel company buys a discounted hotel room at, for example, $40, then sells it to a customer for $100, it does not pay taxes on the $60 difference. However, Chandler officials believe those sales should qualify as a brokerage transaction under the city's tax code and should be taxed for the undiscounted amount. "If they're acting as the seller for a principal ... and they sell something on your behalf, then both that broker and you are subject to the tax," said Lee Grafstrom, Chandler's tax-audit supervisor. "Those are the folks who would then fall into our broker provision." Every city and town in Maricopa County uses the same language for broker provisions in their tax codes, Grafstrom said. "This regulation has been part of the standard language in the Model City Tax Code since its inception in 1987," he said. Chandler imposes a 1.5 percent privilege tax on business activity of hotels, plus an additional 2.9 percent bed tax. The two dissenting votes on the council came from Chandler Vice Mayor Jeff Weninger and Councilman Kevin Hartke. "It just doesn't sit right with me," Weninger said. "Just because we can get some more money to me doesn't make it right. I view it as an income tax. Someone is providing a service helping someone get business, and we're taxing them on income." Weninger cited an example he had read online recently that he felt applied: "If you gave me $5 to buy a $4 latte, including a city beverage tax at Starbucks, with the assumption that I keep the $1 for my services, would you be able to suggest that that $1 would be subjected to a city service tax?" he said. Hartke said he felt the nature of the suit was too nebulous and that customers would ultimately bear the brunt of any lawsuit costs or additional taxes. "In the hotel business there's a lot of taxes and ultimately they're going to get passed on to consumers," Hartke said. "I think it has a greater chance of hurting the city rather than helping it." The other cities involved in the audit are Apache Junction, Flagstaff, Glendale, Mesa, Nogales, Peoria, Phoenix, Prescott, Scottsdale, Tempe and Tucson. Chandler officials said they could not release the full audit, citing taxpayer confidentiality. Along with other Valley cities, Chandler will not be responsible for legal costs unless it wins. If the city wins, the law firm will receive about 27 percent of the proceeds. |