Instead of hotels charging travel agents and wholesalers the "rack" advertised rate, and then paying us the commission, they charge us a "net" rate which we can then mark up as much or as little as we like, in essence making our own commission structure. So we pay them the net rate and they do not pay us any commisssion, so they are not taxed on it. The clients end up paying the "commission" mark up, not the hotels.