Hawaii judge rules online travel sites owe $150M in back taxes

By Shane Nelson
Hawaii tax appeals court judge Gary Chang has ordered several online travel companies, including Expedia, Hotels.com, Hotwire, Orbitz, Travelocity and Priceline, to pay the state approximately $150 million in overdue taxes.

Chang ruled the state’s general excise sales tax applies to the more than $2.7 billion in Hawaii hotel room sales made by online travel companies since 2000, according to the Hawaii attorney general’s office.

The online travel companies owe about $110 million in unpaid general excise tax plus $40 million in interest, state officials said.

“When I first came into office, I made this a top priority after I discovered that the previous administration had chosen not to pursue these taxes,” Hawaii Gov. Neil Abercrombie said in a statement. “I asked the attorney general and the tax director to aggressively and relentlessly go after these taxes that were due and owing. The court’s ruling shows that we were right to pursue this.”

According to state officials, the ruling could result in future general excise tax collections of approximately $20 million annually on the sale of Hawaii hotel rooms by online travel companies.
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