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Certain American Cities vs. Expedia.com, Travelocity.com, and Priceline.com
Home » General Law » Class Action Lawsuits » Certain American Cities vs. Expedia.com, Travelocity.com, and Priceline.comSeveral cities across the United States have joined together in a class action lawsuit against travel websites including Expedia.com, Travelocity.com, and Priceline.com alleging that the websites have not paid the cities millions of dollars in hotel taxes. The cities of San Antonio, Los Angeles, San Diego, Philadelphia, Chicago, and Atlanta have all filed class action law suites against these travel websites and Dallas and Houston are considering doing so as well. The cities allege that the websites buy hotel rooms from hotels at a discounted price and then turn around and sell the rooms to customers at a marked up price and the travel websites are only paying taxes on the wholesale price of the rooms. The lawsuit claims that this is happening in every city across the country and states and cities are missing out on annual tax revenue. The city of San Antonio claims it looses $2 million annually in tax revenue due to these web based travel companies. The lawsuit is seeking several years of taxes owed and names 16 web based companies in the suit. A spokesperson for the defendants in the case says that the websites do not buy hotel rooms and then resell them to customers. Instead they negotiate a lower price that is based on the value of the service they provide for their customers and that they provide a marketplace for consumers to find lower rates on hotel rooms. The spokesperson also stated that the markup is considered a service fee and that if the courts rule in favor of the plaintiffs and compel the payment of back taxes that the consumers will likely see an increase in prices. A similar case in Georgia was just ruled on by a judge to be able to proceed.
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