MarketWatch reports that major online travel agencies, plus ASTA and the U.S. Tour Operators Association, filed a lawsuit against New York City over its new law that holds intermediaries responsible for the tax on the retail rate when they sell hotel rooms using the merchant model.

This marks the first time that tour operators have taken sides in the OTAs’ national battle with cities and counties about the hotel tax issue.

The law, which went into effect in September 2009, says “room remarketers” are responsible for the full rent, meaning they would remit tax on the net rate to the hotels, as OTAs customarily do, and then pay tax on the remaining rent, including service fees, directly to the NYC tax commissioner.