Online Travel Companies Sued by Revenue Department
The Montana Department of Revenue is suing nearly 20 Online Travel Companies (OTC) including Priceline, Travelocity, Orbitz, and Expedia for unpaid lodging taxes.
According to the court documents, the online travel companies tie up with hotels for wholesale rates. Then mark up the price, add a lodging tax and resell. The Revenue department claims that when filing taxes the online travel companies pay taxes on the wholesale rates and not on the rates charged to customers.
As argued by the attorney for the online travel companies, these firms are not the owners or operators of the product. And therefore shouldn't have to pay state bed or rental car taxes. The online travel companies have asked the district judge to dismiss the lawsuit filed by the Montana revenue department, which says the online travel companies pocket a share of the taxes they charge to customers.