Illinois Towns Say Online Travel Sites Underpay Taxes

Law360, New York (August 9, 2013, 5:00 PM EDT) -- Online travel companies such as Expedia, Orbitz and Travelocity use ambiguous receipts to mask the fact that they underpay taxes on hotel rooms, according to a group of Illinois towns in a proposed class action lawsuit removed to federal court Thursday.

The towns say that online travel websites pay for hotel rooms at wholesale rates and pay wholesale taxes on those rooms, but do not pay taxes on the markup price they charge customers.

The lawsuit calls the practice deceptive, saying that the websites bundle taxes...
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