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Florida sues Expedia and Orbitz over hotel taxes

By: Jerry LimoneNovember 09, 2009

Florida’s Office of Attorney General has sued Expedia and Orbitz, claiming that the companies violated state law by failing to remit the appropriate amount of taxes on hotel sales.

The lawsuit states that while Expedia and Orbitz have been collecting taxes from consumers, they have been remitting taxes based on the wholesale rate the online sellers get from hotels, not the retail rate consumers pay.

Florida seeks a declaratory judgment that the defendants have been violating state tax law.

Municipalities have been filing this type of lawsuit against online agencies for the past few years, but Florida is the first state to sue online agencies over alleged tax revenue shortfall.

The attorney general’s office said it has been discussing the hotel tax issue with the Florida Department of Revenue since early 2008. Six Florida counties filed a similar suit seeking clarification on the laws applicable to county tourist-development taxes.

Click here to read a copy of the Florida attorney general's lawsuit.


From 1 to 5 of 6 Comment(s)

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#6November 13, 2009
Good on you Florida, hope other states look into this as well. Over here in the UK Expedia is pretty much cut throat and open close call centres at will with no staff loyalty , watch out stick to ARC , IATA , ABTA or ASTA agents .
#5November 11, 2009
@#2: Yes you do. It is alledged that Expedia & Orbitz are paying sales tax on the wholesale rate "they pay" the hotel chains for a room, not on the higher rate "they charge" the consumer. The difference could be, more likely would be very large. Suggested retail is not part of the equation. It is not really in the lodging vocabulary. The term is "rack rate", the standard rate per room type, by property, the highest rate. Most guests do not pay the rack rate because of various discounts such as Corporate Rates, AAA, AARP, Military, Senior, Loyalty Clubs, Motor Clubs, Employee Discounts, Employed or Engaged in the Travel industry, etc.
#4November 10, 2009
good for Florida - undercut the travel agent - hotels lose revenue and they then have an accounting nightmare- serves you right - use an ARC IATA Travel Agent- nyc agent since 1974
#3November 10, 2009
Too bad, so sad, I'm glad. Go get them Florida
#2November 10, 2009
Don't you pay the Tax on what you collect? Not the Suggested retail value.
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