Online agencies shun Columbus, Ga., because of hotel tax ruling

By Dennis Schaal

Orbitz, Expedia, Travelocity and Priceline apparently haven't been selling wholesale hotel inventory in Columbus, Ga., in connection with a state court ruling ordering Expedia to collect the occupancy tax on the retail rate.

With the possible exception of a hotel or two on Orbitz, none of the four major online agencies are selling wholesale inventory in Columbus, although they were selling rooms in nearby Phenix City. The court order only covered hotels in Columbus.

Some of the online agencies have been shunning Columbus for months, on the heels of a November 2008 order by a state superior court judge ordering Expedia "to collect the hotel occupancy tax based on the total amount it discloses to the consumer as the room rate, room charge or other comparable term."

Company spokeswoman Katie Deines said Expedia ceased selling Columbus hotel rooms in August 2008, even before the Georgia court issued its order. Expedia has appealed the court's ruling.

"As of today, Columbus, Ga., is the only U.S. city where we have stopped offering customers the ability to make hotel reservations," Deines said.

Deines declined to discuss Expedia’s motivation behind the decision.

Separately, Columbus has served Expedia with notices of tax assessment, the company said.

Orbitz spokesman Brian Hoyt said Orbitz decided, independent of its competitors, that "we are going to mitigate our risk from a taxation standpoint by not doing business in a place that doesn’t value our services."

"We will look at each municipality on a case-by-case basis, should they go down this path as Columbus has done, and determine if we want to do business in a place that doesn’t value the business that we provide," Hoyt said.

Municipalities, counties and states across the U.S. have sued or pursued administrative procedures against online agencies, seeking to collect occupancy taxes on the retail rate. The defendants have won most of the cases.

The exceptions have been Columbus and Anaheim, Calif., where a hearing officer ruled in February that the major online agencies owe the city $21.3 million in back taxes.

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