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The dispute over which prices OTAs are expected to pay local taxes on is playing out in several municipalities, making it clear that state laws need to be updated -- and that local governments are starved for extra revenue.

A Tallahassee judge has sided with online travel companies like Expedia and Orbitz in a dispute over local tax obligations — a blow to counties that have argued the companies weren’t paying enough.

After hearing arguments last month, Circuit Judge Terry Lewis on Friday ruled that the online travel sites only owe local hotel taxes on the discounted amounts they actually pay for rooms, not the marked-up rates that travelers pay.

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Tags: expedia, taxes, travelocity

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