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D.C. Attorney General To Sue Online Travel Companies

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Acting Attorney General Irv Nathan says these companies have failed to pay tens of millions of dollars in taxes.

The lawsuit claims that these online vendors are paying the city's 14.5 percent hotel tax at the wholesale rate on each room, not on what the customer actually pays after the room is marked up by the company.

It may be a difference of a few dollars on each room, but Nathan says it adds up to $4 to $10 million in lost taxes each year for the city –- and he plans to recover all of the lost taxes, penalties and interest dating back to 1998.

Similar suits have been filed all over the country, and a spokesperson for the association representing online travel companies, says "an overwhelming majority" have been decided in their favor.

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