Internet hotel reservation agency lawsuit

The City of San Antonio, “on behalf of itself and other similarly situated Texas municipalities,” filed a class action lawsuit in Western Texas District Court last Monday morning against Expedia, Orbitz, Travelocity and other online hotel booking agencies in an effort to collect unpaid hotel “occupancy taxes” from those companies. The suit seeks a jury trial and is asking for $50 million in damages. (Complaint)

“Numerous Texas Comptroller Opinions have clearly stated,” the complaint reads, “that Texas Tax Code §156.053 applies to web-based hotel booking companies and those companies are required to compute & collect hotel occupancy taxes based on the retail price paid by the occupants of the room … The analysis of the Comptroller being based on the fact that web-based hotel reservation companies have ‘a contractual right to control occupancy’ of the hotel rooms in Texas.”