Tour Operators, Wholesalers Could Be Next in San Francisco Tax Dispute

The online travel companies label San Francisco's pursuit of them on the merchant-model hotel tax issue as "discriminatory," in part because only OTCs, as far as is publicly known, have been targeted.

To date, no tour operators, or travel wholesalers, which employ the merchant model in selling vacation packages, have been the subject of litigation by cities, counties or states.

But, reading between the lines, I believe that San Francisco eventually will go after tour operators and wholesalers selling vacation packages in the city -- especially if San Franscisco prevails in its tax fight against the OTCs.

Jim Emery, San Francisco's chief of complex litigation, declined to comment on whether any tour operators or wholesalers are subject to administrative proceedings or assessments, or even whether this travel industry sector is on the city's radar.

But, Emery adamantly rejected the notion that San Francisco's tax-collection efforts are discriminatory.

Emery said the city's tax office, like that in any jurisdiction, has constraints on its enforcement abilities, and just "because you haven't gotten to someone else" doesn't mean another entity would not escape scrutiny.

"We go where it's coming to our attention that a tax is due and make resource allocations," Emery said.

He added: "It isn't discrimination against anyone in a taxpayer audit if you haven’t gotten to another taxpayer yet."

I'm interpreting that to mean that tour operators and wholesalers could be next on the City of San Francisco's target list.