San Antonio, Los Angeles, San Diego, Philadelphia, Atlanta and Chicago Sue Expedia, Travelocity and Orbitz
Expedia, Travelocity and Orbitz are being sued for not paying millions of dollars in hotel taxes.
San Antonio filed a class-action lawsuit this week seeking to recover lost taxes, and Los Angeles, San Diego, Philadelphia, Atlanta and Chicago have filed similar suits. The state of Texas and two of its biggest cities, Dallas and Houston, are considering their own actions.
San Antonio is unhappy that online travel agencies negotiate room discounts from hotels, and sell the rooms at a markup to consumers. The Agents, though, only pay hotel taxes on the wholesale price.
"This scheme is being perpetrated by the Web-based hotel travel companies on every city and state in the country as far as we can tell," said Steve Wolens, a lawyer representing the city of San Antonio. "And they have been shameless about it."
What Steve Wolens intends on doing is passing the $2 million dollars in taxes that San Antonio loses onto the consumer looking for cheap flights. More taxes....hmmmmm Taxing my stay at a hotel is a form of robbery as it is!
The markup is a service fee, said industry spokesman Art Sackler.
Sackler, who is executive director of the Interactive Travel Services Association, said the governments misunderstand the role and responsibility of the companies and the laws governing the transactions.
The companies do not buy and resell rooms, he said. Rather, they negotiate a lower price based on the value of the service they then provide — creating a marketplace for consumers to find hotel rooms, he said. The markup is a service fee, he said.
So hotels are paying the appropriate taxes, and none should be collected from Internet companies, Sackler said.
San Antonio filed a class-action lawsuit this week seeking to recover lost taxes, and Los Angeles, San Diego, Philadelphia, Atlanta and Chicago have filed similar suits. The state of Texas and two of its biggest cities, Dallas and Houston, are considering their own actions.
San Antonio is unhappy that online travel agencies negotiate room discounts from hotels, and sell the rooms at a markup to consumers. The Agents, though, only pay hotel taxes on the wholesale price.
"This scheme is being perpetrated by the Web-based hotel travel companies on every city and state in the country as far as we can tell," said Steve Wolens, a lawyer representing the city of San Antonio. "And they have been shameless about it."
What Steve Wolens intends on doing is passing the $2 million dollars in taxes that San Antonio loses onto the consumer looking for cheap flights. More taxes....hmmmmm Taxing my stay at a hotel is a form of robbery as it is!
The markup is a service fee, said industry spokesman Art Sackler.
Sackler, who is executive director of the Interactive Travel Services Association, said the governments misunderstand the role and responsibility of the companies and the laws governing the transactions.
The companies do not buy and resell rooms, he said. Rather, they negotiate a lower price based on the value of the service they then provide — creating a marketplace for consumers to find hotel rooms, he said. The markup is a service fee, he said.
So hotels are paying the appropriate taxes, and none should be collected from Internet companies, Sackler said.
posted by Chris Titan at 8:03 AM
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