The Big Four U.S.-headquartered online travel companies — Expedia Inc., Priceline.com, Orbitz Worldwide and Travelocity — were socked with a $20.6 million hotel occupancy tax tab as a federal jury in San Antonio, Texas, ruled against them in a class-action civil lawsuit brought on behalf of 173 of the state’s cities and towns.
The U.S. district court jury in City of San Antonio v. Hotels.com found that the OTCs were “controlling hotels” when they sold room nights on a merchant-model basis, and thus were liable for tax on their retail rates and not just the wholesale deals they got from the hotels.
And, that $20.6 million potential liability does not yet even take into account the penalties and interest that might be imposed.
