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State: online travel agencies owe nearly $23 million in unpaid taxes

Source: theadvocate.com/baton_rouge/news/courts/article_e16cae82-801d-11e6-82d9-03e844e62788.html - Sep 29, 2016

A lawsuit the state and New Orleans have lodged against online travel agency giants Priceline, Orbitz, Expedia and Travelocity uses words like "disguise" and "camouflage" to complain about a scheme that the suit says has cost Louisiana nearly $23 million and counting in lost tax revenue since the late 1990s.

The suit, filed in Baton Rouge state court, claims the online travel agencies contract with hotels for a wholesale price on rooms but then charge consumers a higher retail price, paying taxes only on the price they pay to the hotels.

"When a hotel rents a room on its online website, it charges and collects and remits taxes based on the retail rate. When an (online travel agency) furnishes a hotel room on its website, it charges and collects taxes at or above the retail rate, but remits on a lesser wholesale rate. This is fundamentally unfair," the suit contends.

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Category: General Business