Online Travel Agencies Ordered To Pay Up

According to a report in The Atlanta Journal-Constitution, online travel companies that book hotel rooms in Atlanta must begin paying more in occupancy taxes.

In an order Wednesday, Superior Court Judge Alford Dempsey stopped short of handing Atlanta a complete victory. He determined the Internet travel reservation companies do not have to pay the city past-due hotel and motel occupancy taxes.

Dempsey’s order addressed a lawsuit filed by the city four years ago against 17 online reservation companies, including Expedia, Travelocity, Hotels.com, Priceline and Orbitz. The city contends the companies are illegally pocketing hotel occupancy tax revenue by paying the tax only on the wholesale rate they pay to reserve blocks of rooms, rather than the rate they charge customers.

Andrew Weinstein, a spokesman for the Interactive Travel Services Association, predicted the ruling will result in higher hotel rates for customers who book Atlanta rooms using online reservation companies.

Online travel companies have been under legal assault in lawsuits filed by cities and local governments nationwide at a time when more people make their reservations online.

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