Monday, August 10, 2009

GA Supreme Court Ruling: Online Travel Agencies Must Pay Taxes

The Georgia Supreme Court ruled in favor of the city of Columbus in a lawsuit over hotel/motel sales tax collections that could have repercussions in Atlanta and elsewhere.

The court ruled 4-3 that Expedia Inc., parent of Expedia.com, must collect taxes on hotel room rentals based on the price a customer pays, and remit that amount to the city.

Columbus officials sued Expedia arguing the online travel site charges customers a higher “room rate” than it pays to hotels, but hotels remit occupancy taxes based on the wholesale rate of the room. The online travel providers pocket the difference. A lower court ruled in the city’s favor.

The ruling did not say whether Columbus has the authority to go after back taxes.

For more, go here.