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Suffolk plans hotel-motel room tax audit

The Suffolk County comptroller plans to launch an audit to make sure the county's 345 hotels and motels, as well as travel websites, are fully paying Suffolk's 3 percent room tax.

Comptroller Joseph Sawicki disclosed the new audit before a legislative committee last week where he discussed his call for the county to terminate its contract with the Long Island Convention and Visitors Bureau. He has said that in 2009 and 2010, the bureau misspent $806,000 in part by not promoting Suffolk destinations specifically.

Suffolk pays the visitors bureau out of the hotel-motel tax, and Sawicki called the travel site audit a "natural progression. . . . We already get $8.2 million a year and we want to make sure that there's not a substantial amount that is not being reported."

Sawicki's audit follows a court ruling last month granting Nassau, Suffolk and upstate counties with room taxes class action status in a lawsuit against travel websites. The suit claims the sites shortchange the counties by paying taxes based on the discounted prices hotels charge them for rooms instead of prices paid by retail customers. The Suffolk County attorney's office has not estimated potential losses.

The travel sites say they are only intermediaries and that the hotels are responsible for paying the tax.

Sawicki will be examining whether the county is losing money from online transactions by companies including Priceline, Expedia and Travelocity.

Treasurer Angie Carpenter said her office sends packets to all hotels and motels telling them how to comply with the room tax, which requires even seasonal hotels to file quarterly whether they have a tax liability. While most pay, Carpenter said she has referred one operator to the district attorney for possible prosecution.

Those that fail to pay are charged 5 percent over the taxes due, plus an interest rate of 1 percent per month. Those who fail to register or pay the correct tax can be found guilty of a misdemeanor, punishable by up to a $1,000 fine and a year in jail.

Legis. Jay Schneiderman (I-Montauk), himself a motel owner, said he doesn't expect the audit to find hotels or motels that are cheating the county. But he called it a good idea to examine the potential losses from travel websites, which he described as a "gray area."

Convention and Visitors Bureau president Moke McGowan has said that Suffolk moving promotional services in-house would not "bring in anywhere near the returns the bureau has been able to provide in terms of sales and marketing activities."

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