UNITE HERE Local 11 Urges California AG and Franchise Tax Board to Probe Tax Breaks for Ashford Hospitality Trust and Braemar Hotels and Resorts

UNITE HERE Local 11 is calling for an investigation into whether REITs like Ashford Hospitality Trust and Braemar Hotels and Resorts are violating IRS provisions that provide them with tax breaks. Evidence suggests that these companies may be cutting labor costs in a way that violates the requirement that REITs not operate hotels directly. This potential abuse of the tax break has caught the attention of Senator Elizabeth Warren, who has urged increased scrutiny by the IRS.

UNITE HERE Local 11 estimates that the misuse of the REIT tax break likely costs California taxpayers hundreds of millions per year, and is urging the California Attorney General and Franchise Tax Board to investigate further. The goal is to ensure that all companies, particularly in the hotel sector, are operating on a level playing field and that the state receives the revenue it is entitled to.

This call for investigation comes as UNITE HERE Local 11, a labor union representing over 32,000 hospitality workers in Southern California and Arizona, seeks to protect the interests of its members and ensure fair treatment within the industry. Lead Research Analyst Jordan Fein emphasizes the importance of addressing potential violations of the REIT tax rules to protect workers and ensure proper funding for essential services.

With the attention to detail and evidence provided in the letter to the California Attorney General and Franchise Tax Board, UNITE HERE Local 11 is making a strong case for an investigation into the practices of Ashford Hospitality Trust, Braemar Hotels and Resorts, and potentially other REITs in the hotel sector. By highlighting the potential violations of the tax rules and the impact on California taxpayers, the labor union is advocating for accountability and transparency within the industry.

As Senator Elizabeth Warren points out, REITs are intended to be passive investment opportunities, not vehicles for cutting labor costs and violating tax provisions. The union’s call for investigation aims to protect the interests of workers, ensure fair competition, and uphold the integrity of the tax system.

UNITE HERE Local 11’s efforts to bring attention to the potential abuse of REIT tax breaks reflect a commitment to ensuring that all companies abide by the rules and that taxpayers receive the revenue they are owed. By calling for accountability and oversight, the labor union is advocating for a fair and level playing field within the hotel sector and beyond.

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