Legal News

Travel sites duck occupancy taxes in LA

By Richard Binder

Los Angeles County Superior Court Judge Carolyn Kuhl granted a request by Priceline.com Inc, Expedia Inc, Trip Network Inc, Orbitz LLC and Travelocity.com LP, Hotels.com LP and Hotwire Inc to invalidate $21.3 million in taxes, interest and penalties assessed by the city of Anaheim over the past nine years. The companies argued they were not liable for the 15-percent hotel occupancy taxes because they do not operate hotels, and their fees cannot be considered "rent" under the law.

Attorneys for Anaheim had argued that the city was owed a greater share because the online companies were collecting taxes from customers on the retail price of hotel rooms, but only paying the city the tax on the wholesale price.

An administrative-hearing officer sided with the city last year, ruling that Anaheim was owed the money because the travel companies were both the proprietor and the managing agent of the hotels they resold. The companies appealed, and the case was transferred to Los Angeles County where similar cases were being heard.

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Full post as published by Legal Pad | LA on February 02, 2010 (boomark / email).