Online hotel bookers lose tax battle

November 4, 2009

It looks like the Roaming Gnome will be booking an appeals court appearance.

A San Antonio jury has returned a $20 million verdict against online hotel booking companies for failing to pay occupancy taxes. The award money eventually will be split among 170 Texas communities, led by the Alamo City, that were part of the class-action lawsuit filed in 2006.

Booking sites named as defendants include Hotels.com, Expedia.com, Priceline.com, Hotwire.com, Lodging.com, Orbitz.com, Site59.com and the gnome's home Travelocity.com. The online bookers reportedly will appeal.

What will happen in the next courtroom is anybody's guess. The San Antonio jury actually gave each side a bit of a victory.

The jury decided that the online reservations
companies do "control hotels" in Texas and therefore are responsible
for
collecting hotel-occupancy taxes.

However, jurors did not agree with the cities'
contention that the hotels were collecting the taxes and not paying
them to the taxing jurisdictions.

More legal action pending: The state of Texas has an administrative claim against the
online booking companies, but has not yet filed suit.

A similar action is planned in California.

But Florida isn't waiting any longer.

On Tuesday, Attorney General Bill McCollum sued Expedia and Orbitz, claiming they
failed to pay the Sunshine State the full amount of taxes collected on hotel room rentals made
through their Web sites.

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Comments

Hotels Cagayan de Oro

15 years ago Reply

We should take care of our responsibility as a tax payer. I agree with the verdict. Having a hotel business take a great responsibility with your employee, customer and the government. We should pay proper taxes to avoid law suits.

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Online hotel bookers lose tax battle

Hotels Cagayan de Oro