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Court Rules For D.C. In Online Travel Sites Case

Expedia, et. al. must pay taxes on retail price of room

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The District of Columbia can collect sales taxes on the the full retail price of hotel rooms booked through online travel companies, a court ruled Monday.

The ruling from a D.C. Superior Court judge means that online travel firms will have to pay taxes on the full retail price of hotel rooms that they sell to customers, according to the Associated Press.

The travel companies had been paying taxes on the wholesale price of the rooms, which can be a lot cheaper. But the court ruled that the online travel firms are making a retail sale that is taxable under the statute, and that means the full 14.5 percent tax is applicable.

Companies including Expedia, Orbitz, Travelocity and Priceline owe millions of dollars in unpaid taxes, according to the D.C. government.

D.C. Attorney General Irvin Nathan heralded the ruling, saying it is an important step in the District's efforts to collect the money. The companies expect to win on appeal, the president of a travel company trade association told AP.

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