Just a New York minute!

New York City Vacation Packages (NYCVP) assures travel agents that they can book New York City packages for their clients without concern for the new Hotel Room Occupancy Tax for Room Remarketers law that went into effect on September 1.

“Our company is in compliance with regulations issued by the City regarding the application of the tax to room remarketers,” says Joel Cohen, NYCVP’s Vice President. “Our pricing includes all taxes on all features of the products we sell and we intend to remit the tax to the City as required by the law.

“Our recommendation to travel agents is stated on our website nyctrip.com: ‘…travel agents who book fully commissionable vacation packages through NYCVP should not be affected by the tax with respect to those packages so long as travel agents charge clients the NYCVP-quoted price for all FIT (non-group) bookings and do not add a service fee to the booking,’ Cohen explained. “For almost all of the FIT bookings that we handle, the travel agent does not have to do anything further regarding the tax, does not have to register with the City, does not have to remit any additional tax, and can simply collect his/her commission in full compliance.”

Although NYCVP disagrees strongly with the City’s new legislation, the company will comply with the law and has received their Certificate of Registration.  NYCVP, as a member of the ASTA TOP program and NTA, is joining both those organizations in urging the City to reconsider the tax as damaging to potential tourism business.

“Regardless of our position on the legislation and its very confusing procedures,” Cohen continued, “we feel it’s important for travel agents to understand that they do not need to register and do not need to remit tax to New York City if they purchase an FIT vacation package through NYCVP. We have included taxes on the entire retail cost of the hotel room so agents and customers are protected.”

New York City Vacation Packages is the largest independent tour company in the US selling New York City exclusively. The company can be contacted by phone at 877 NYC-TRiP or on the web at nyctrip.com.

While we agree in principle with ASTA’s position on the newly-implemented Hotel Room Occupancy Tax for Room Remarketers, we disagree with their interpretation of the law as it applies to travel retailers. In the ASTA Member Alert of September 3, 2009 they state

Under the new tax computation procedures, whenever a travel retailer purchases New York City vacation packages from other travel sellers and then sells the packages to their own clients without knowing the cost of the hotel component of the package, it must use the following method of collecting and remitting taxes - “a 15-percent markup on 70 percent of the average retail rate of a similar room … to compute additional rent.” 

That statement is correct in certain circumstances, but is misleading to travel agents who might book their New York City vacation packages with reputable tour companies who have registered with the City and who have already made proper arrangements to pay the additional markup tax. New York City Vacation Packages (NYCVP), an ASTA TOP member, is one such company who has already included the markup tax in the price quoted to the travel agent, and who will remit the tax to the City as specified in the City’s Statement of Audit Procedures.

Travel agents who book their clients’ vacation with NYCVP do not need to be concerned about the new tax law, so long as they charge clients the NYCVP-quoted commissionable price for all FIT (non-group) bookings and do not add a service fee to the booking. We further agree with ASTA's position that the interpretation of the tax is vague, confusing and generally unacceptable, but we are concerned that ASTA's interpretation will lead to even more confusion on the part of travel agents. We request that ASTA clarify the Alert so that travel agents can properly service their New York City-bound clients.

UPDATE 9/4/09 2pm: ASTA has informed us that they are changing the wording on their Alert based upon our recommendation. Thank you ASTA.