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Hotel operators sell rooms to online travel companies at a discounted rate, and the companies then charge a markup to consumers.
By law, online companies pay taxes on the price they paid for a room but are not required to factor in the higher price they charge the consumer, said City Councilmember Tim McOsker, a proponent of Measure TC.
The city’s transient occupancy tax, also known as a bed or hotel tax, is 14% of the room rate. Measure TC, if passed, could raise $5 million per year for sidewalk and street repairs, parks and other necessary services, according to city estimates.
