Expedia.com, Priceline.com, Hotels.com, Travelocity and Orbitz
have been accused of making underpayments of the tax, according to
the suit that was filed in Los Angeles Superior Court on 30th
December.
The Attorney's Office estimates that the lost hotel tax revenue
costs the City around $10 million annually for each on-line
company.
"We will no longer allow on-line booking companies to continue a
fraudulent scheme to collect but avoid paying these needed taxes
and defraud all Angelenos," said Los Angeles City Attorney Rocky
Delgadillo.
The suit also accuses the companies of charging higher fees and
taxes on rooms than the current Los Angeles City room tax of
14%.
In a statement, Art Sackler, the Executive Director of the
Interactive Travel Services Association (ITSA), the US trade group
for on-line travel companies and computer reservations systems,
described the suit as "without merit".
"The claim that ITSA members do not remit collected taxes is
false," he said. "The city's hotel tax does not apply to on-line
travel companies which are not hotel operators and do not collect
rent. These companies provide valuable services to assist consumers
with booking hotel rooms."
"The city is trying to impose a new tax on internet services
that is adverse to consumers," Sackler added.
