Assessment Of The Texas City Case v. Hotel Websites
170 Texas cities engaged in and won a $20 million verdict in a class – action law suit filed in San Antonio against online hotel booking companies. The online hotel booking companies neglected to pay hotel occupancy taxes. The travel companies plan to appeal all accusations. The money will not be given to the Texas cities soon due to many appeals that could drag on for up to two years. The online travel companies won on with the San Antonio jury due to the questioning of whether or not the online travel companies were collecting taxes but not forwarding them to the state properly. The Texas cities requested $40 million in return for punitive damages in regards to that issue. The panel ruled that the online travel companies did not gather the taxes in doubt. The jury also gathered that the travel firms in Texas are held liable for collecting hotel – occupancy taxes. To explain the way some online travel companies go about making their money; an online wholesaler purchases a room at a discounted rate and then makes a profit off these rooms by reselling the rooms to customers at a markup rate. The trial that lasted four weeks ended after five hours of jury deliberation. The ruling that the jury brought forth of $20 million could increase with legal penalties and interest.