Internet travel companies in tax scam claim

The City of Los Angeles claims Priceline.com, Expedia, Orbitz and Travelocity have diddled them of cash by pocketing the difference between the hotel room tax they pay and the amount collected from consumers. They also reckon they have underpaid transient occupancy taxes.

If you believe City Hall, the sites contract with hotels for rooms at negotiated discounted rates, then mark up their inventory of rooms to sell them to the public.

They charge and collect taxes from occupants based on the marked-up rates, but only pay taxes to cities based on the lower, negotiated rates.

The case has stirred angry rumblings from the Internet travel companies who say that the case has "no merit" [translation, bad: Ed.] and they will be fighting City Hall all the way.

The full story can be found here. µ