A Hawaii tax court judge has ruled that nine online travel agencies (OTAs), including Expedia, Orbitz, Travelocity and Priceline, must pay another $25 million in interest on the unpaid general excises taxes and penalties they owe for selling Aloha State hotel rooms over the internet during a 10-year period.

Following the ruling, the OTAs now owe Hawaii $246 million in unpaid taxes, penalties and interest for the period from 2000 through 2011, according to an Aug. 15 statement from the Hawaii Attorney General’s office.

The ruling could result in up to $30 million in additional annual general excise tax revenue, state officials said.

“Clearly, through the sale of millions of hotel room nights in Hawaii to Hawaii and other consumers, in a substantial number of Hawaii hotels, and collecting room rentals in the billions of dollars, the [OTAs] are doing business in Hawaii,” Attorney General David Louie said in the statement.

However, the Hawaii tax court ruled in favor of the OTAs regarding the state’s claim that the online companies owe $429.8 million in unpaid Transient Accommodations Taxes penalties and interest during the same 2000-2011 period.

The Hawaii Attorney General’s office intends to appeal that decision.


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