Skift Take

While its true that there is a tax loophole the OTAs have settled into, it is also true that not all money they collect from consumers as "tax" actually goes toward paying local taxes.

Source: Orlando Sentinel
Author: David Damron

Circuit Judge Fred Lauten sided with the Orbitz online travel company in a ruling Friday, saying the law is ‘not sufficiently clear’ as to whether tourist taxes should be applied to the retail price charged by online hotel booking companies.

Orange Circuit Judge Fred Lauten ruled Friday in favor of the Orbitz online travel company in a hotel tax fight with Orange County.

Lauten said the law is “not sufficiently clear” on how taxes apply to online hotel booking companies. It deals a blow to Orange leaders who argued Orbitz and similar companies owe millions in unpaid taxes since they pay levies only a smaller, wholesale purchase price for rooms.

A lawyer for Comptroller Martha Haynie said it was too early to tell if she would appeal. Orange officials settled a similar dispute with Expedia last year for $9 million.

Commissioner Fred Brummer said the decision could be “devastating,” since state lawmakers who could settle the dispute have tended to back online companies on this issue.

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Tags: taxes