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Posted on: November 5th, 2009 by Trevor Lloyd
It now seems that the state of Florida is going to sue online travel companies Expedia and Orbitz over hotel taxes. This new report comes just following a number of lawsuits that have broken out all across the state that claim that the two owe local authorities millions of dollars in taxes.
The attorney general, Bill McCollum, and chief financial officer, Alex Sink, say that the two travel companies are holding sales taxes from their state. McCollum goes on to say that the customers have already paid these taxes, but the companies are not remitting all of the taxes that they have collected back to the state.
Online travel companies, like Expedia and Orbitz, normally charge consumers one rate for hotel rooms but then are able to negotiate lower charges with hotels. Then the site is able to keep the difference. However, the attorney general says that the sales tax paid should be based on the higher fee that the customer pays, not the one that the travel company pays.
Andrew Weinstein, a spokesperson for the Washington-based Industry Travel Services, says that the decision to sue is going to do nothing but hurt the travel and tourism industry for the whole state. It is going to make it just more expensive for visitors to come to this area.
He went on to point out that the fees that traditional travel agents use have never been taxes. He went on to add that these online travel companies are connecting consumers with good deals on rooms just like offline travel agents due. Thus, why should one be taxed more than the other.