D.C. Suing Online Travel Companies for Hotel Taxes

Tuesday, Mar 22, 2011  |  Updated 9:00 PM EDT
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D.C. Suing Online Travel Companies for Hotel Taxes

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Attorneys for the District of Columbia are suing online travel companies, including Expedia, Orbitz, Travelocity and Priceline, alleging the companies owe the city millions of dollars in sales tax dollars.

The lawsuit, filed Tuesday in Superior Court, is similar to more than 40 lawsuits pending around the country, which have met with mixed success. The lawsuit and others like it say the companies charge customers tax on the full price of a hotel room but only return tax to the city based on the wholesale rate the company paid.

The city's Acting Attorney General, Irvin Nathan, said his office has studied the lawsuits in other places and believes the city can win in Washington.

"Obviously this deprives the District of a substantial measure of taxes that we are owed," he said.

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