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City of Philadelphias Lawsuit against Internet Travel Agents Dismissed
A lawsuit filed by the City of Philadelphia against 17 online travel services was thrown out by a Common Pleas Judge. The city alleged that the services had short-changed the city on its 7 percent hotel occupancy tax. The travel services pay the tax on the wholesale prices they pay to hotels, rather than the retail prices they charge to consumers. While not addressing the merits of the case, Judge Howland W. Abramson stated that his court was not the appropriate forum. There was no evidence that the city had ever performed an audit, provided notice or attempted to collect the tax from the online services before commencing the lawsuit. Abramson ruled that if the city believes the online travel brokers owe more money they should seek assistance from their Tax Review Board, and that it was the Tax Review Board, rather than the court, that had sole jurisdiction to determine whether taxes were owing.
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