Wholesalers and sales tax

Personally, it's good locals are taxing wholesalers. This is great for the family with a small villa resort, which does not wholesale. However, the tax problem for them is two-fold.

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First, when selling direct, you must pay tax on the total room, or villa, to the local tax authority. On the other hand, wholesalers only pay tax on the "contract" rate. Effectively, they enjoy a state-tax sponsored discount. What makes this annoying is wholesalers often claim prices including xx% tax (the local hotel rate). This tax implies the whole amount, but it is pure bull.

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Second, there is more than the tax. There is the service charge. Wholesalers tend to say "price includes xx% tax and a service charge." Often, their rates do not include the service charge. If they do, the same problem exists. The service charge (%) is based on the contract rate. Also, it is likely this service charge never makes the hotel staff’s pockets. This is because the “twin book” hotel accounting system is endemic worldwide. In my opinion, this is fraud. It is the $50 (US) a month hotel workers, in 3rd world countries, who struggle to put rice on the table who get hurt.

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At a minimum, wholesalers need a "Net / Nett rate which includes all mandatory taxes and service charges (if any)". They should be required to pay the same tax and service charge percentages as hotels who supply the rooms.

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Once you run the numbers, wholesalers have an unfair and unnatural discount of around 15%. This comes from them doing what they do (not paying tax). When the time comes, hopefully they lose their day in court.

Tax should be applied and collected for the whole room amount. Service charges are removed from the equation. The guest pays at their own discretion, at the hotel. Personally, when travelling, don't accept mandatory service charges. Simply, they they are NOT! Pay service charges (and then decide the amount) based on what you get.

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Today, more red was shed today with the lower closing share price. Once again, it seems the analysts and the market DID NOT get the big picture of the vision of the future Cyberonics wanted to present, or did they?

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This us vs. them and business as usual was in play, and it is a two way street. Results from this company must be blow-out before even the smallest glimmer of respect is attained by Cyberonics. They have too long a history of past shortcomings, of share-owner disappointments, of failing to meet their own projections. When they do, it seems the only option is to take the profit, or a smaller loss, when the opportunity is presents.

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They seem to continue to be unwilling to work with the groups necessary to build a truly successful company. They insist on presenting information and numbers which must be dissected to insure you understand what they are trying to say. "Say what you mean and mean what you say." This would better serve them.

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Is it really the share-owners, analysts, and media's job to dig under every rock to understand every weird metric (e.g. quarterly annualized sales, and the subsequent AP correction) Cyberonics company decides to use? Don't most public companies attempt to be as transparent (who often uses that word) as possible? Don't they lead shareowners and analysts in explaining the road they are taking to become a successful company? Don't they explain the why's for someone placing investment dollars in shares of their business?

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It's the same old story line. It is protecting the management team. Yet, doing so every conference call does little to inspire additional investment in the company. This is especially true from existing shareowners. And, forget about inspiring new investors to the stock.

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Shareowner value creation is what we all want. We keep waiting for the WHEN, in a meaningful, and most importantly and LASTING manner.