Online Travel Reservation Companies Pocket Tourism Tax Money

Attorney General, Bill McCollum, filed suit against Expedia and Orbitz last month, claiming they failed to pay Florida the full amount of taxes collected on hotel room rentals through their sites. This recent lawsuit is just one multiple lawsuits filed against the travel companies claiming the network sites owe millions to local authorities. Individuals who reserve a room through the website are charged a flat rate, which the company then reimburses the hotels a lesser amount at a later date. The taxes are paid on that less expensive rate, which has led to legal action by cities and states that claim they are being cheated out of millions of dollars in tax dollars. Officials claim the online travel services have charged taxes such as a local tourism tax for those cities and states; however the travel companies have neglected to remit those fees.

The travel companies argue that it is unfair for destination cities to take decades-old ordinances aimed at hotel operators and apply them to the service fees that Internet firms charge to match guests with hotel vacancies.


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