Liz Swain 4:24 p.m., May 24
Hotel Tax Does Not Apply to Online Travel Companies
The City of San Diego can not collect the full amount of hotel taxes from online travel companies, a California state court ruled earlier this week.
Like many other cities across the country, officials in San Diego are asking online travel companies such as Expedia, Priceline, Orbitz, and Travelocity to pay hotel occupancy taxes on the amount that they sell rooms for, not the amount that they pay for the rooms. Typically, travel companies buy blocks of rooms and sell them at a higher price but pay taxes on the lesser amount.
Similar cases have been tried in courtrooms across the country. According to the Interactive Travel Services Association, three different courts have ruled in favor of the online travel companies.
“Municipalities and [online travel companies] should work together to promote travel and tourism for everyone’s benefit, rather than both sides’ expending precious resources on futile litigation,” said Interactive Travel Services Association Executive Director Art Sackler.