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Travel Websites Sued over Hotel Occupancy Taxes
The city of Atlanta has sued a dozen major online travel website operators, including Expedia, Orbitz, Hotels.com and Travelocity.com, claiming the companies have failed to pay tens of millions of dollars in hotel occupancy taxes. In a lawsuit filed March 29, 2006 in Fulton County Superior Court, the city says the companies are collecting the full seven percent Atlanta occupancy tax from customers, but remitting only part of it to the city and keeping the rest as profit.
As claimed by one of the city’s lawyers, the operators purchase hotel rooms directly from hotels at discounted rates and then re-sell the rooms to customers at higher rates, charging the customers the occupancy tax based on the higher rates. The operators remit to the city the tax amount based on the discount price paid to the hotel, not the higher price received from the customer. The city’s position is that the tax remitted should be based on the final price charged to the customer.
Similar lawsuits have been filed in the last year by the cities of Chicago, Los Angeles, Philadelphia, San Diego and Rome, Georgia. A pending federal lawsuit was also filed last year by Fulton and Hart counties and several North Georgia cities.
For additional information, visit:
http://www.m-travel.com/news/2006/03/internet_travel.html