TALLAHASSEE — The state of Florida is after millions of dollars it claims some Internet travel companies are taking out of the state.
Republican Attorney General Bill McCollum sued two of the companies — Expedia and Orbitz — Tuesday, claiming they have failed to reimburse Florida millions of tax dollars collected on hotel room rentals made through one of the online companies.
The lawsuit states that while the companies have been collecting the taxes from consumers, they have remitted only a portion of them back to Florida, keeping the rest as profit.
Chief Financial Officer Alex Sink, a Democrat, applauded McCollum’s decision to sue the companies. Sink and McCollum are each seeking their respective party’s nomination for governor.
The state lawsuit comes as Manatee County and several others in Florida make plans to sue the online companies as well, claiming they shortchanged the counties in tourist-development or bed taxes. Manatee has signed with a Tallahassee law firm that plans to file the suit, designed to seek back taxes from the travel companies.
But collecting the taxes may not be easy: The online companies have largely succeeded in fighting off others who have tried, court records show. And some, including the Manatee tax collector’s office, don’t think there’s that much money at stake to justify going to court in the first place.
At issue is how bed taxes — Manatee’s is 5 percent — apply to the online companies, which reserve blocks of hotel rooms at pre-negotiated rates and then resell individual reservations to consumers at higher rates through the Internet. The companies pay taxes at the wholesale rate, but local governments say it should be based on the retail rate.
“They are collecting the tourist development tax on the amount they negotiated with the hotel,” said Ed Dion, partner of the Tallahassee law firm that has recruited Manatee and other Florida counties for the pending lawsuit. “We believe they should be paying taxes on the price charged to the consumer.” The industry argues that it is exempt from local bed taxes because they are middlemen who facilitate the booking of hotel rooms and other lodging. “It makes no sense to apply hotel taxes when you are not a hotel, and online travel companies do not own or operate hotels,” said Andrew Weinstein, spokesman for the Interactive Travel Services Association, a trade group based in Washington, D.C.
Email Story
Printer Friendly 
Quick Job Search
@Nyx.replyAnswerText@