Florida sues online travel companies over tax

4th Nov 2009
Florida sues online travel companies over tax

The state of Florida is suing online travel companies Expedia and Orbitz over hotel taxes following a number of lawsuits nationwide which claim the sites owe local authorities millions of dollars in tax.

Attorney General Bill McCollum and Chief Financial Officer Alex Sink, rival candidates for governor claim that online travel services are witholding sales taxes from the state.

“The customer is paying the tax already,” said McCollum. “Orbitz and Expedia are not remitting to the state all the taxes they have collected.
Sink, the Democratic candidate for governor, issued a statement of support for McCollum’s suit.

Orbitz and Expedia, along with other online travel companies, charge consumers one rate for hotel rooms but negotiate a lower charge with hotels, profiting from the difference. But the Attorney General says the sales tax should be based on the higher fee.

“The decision to file a lawsuit will hurt the interest of millions of travelers and tourism workers in Florida,” Andrew Weinstein, spokesman for the Washington-based Industry Travel Services Association told AP. “It will make it more expensive for visitors to come to the state.”


“The fees from traditional travel agents, tour operators and other middlemen have never been taxed,” he said, adding that online travel companies “only connect consumers with good deals on rooms in the same way that offline travel agents or tour operators do.”

Expedia have issued a statement denying the allegations and saying the lawsuit is “meritless and does nothing but detract from our efforts to bring visitors to Florida.”


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