County Sues Travel Web Sites
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Posted: 6:19 PM Mar 18, 2009
County Sues Travel Web Sites
County alleges web sites aren't paying all of the tax it owes.
Reporter: Jason Colthorp
Email Address: jason.colthorp@wilx.com
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It's Ingham County versus the Internet.

The county, along with three others, is suing to get tens of thousands of tax dollars, it says, certain travel web sites haven't paid.

Thirteen companies in all are being sued by Ingham, Genesee, Calhoun and Saginaw Counties. They are: Hotels.com, Cheaptickets.com, Travelport, Inc., Expedia.com, Lodging.com, Lowestfare.com, Orbitz.com, Priceline.com, Sabre Holdings Corporation, Site59.com, Travelocity.com, and TravelwebLLC.

This is what's been going on according to the counties. Someone books a hotel online in Ingham County and pays the web site $100 dollars for example. The county is owed five percent tax on that transaction which is $5 dollars. But since the web site gets the room cheaper-- $60 dollars for example-- it's only paying five percent of that amount to the county which is $3 dollars.

Over time, that amount of money can add up and the Ingham County Treasurer thinks it's at least in the tens of thousands of dollars-- maybe the hundreds. In his mind it's about fairness.

"If you've bought through a booking service and paid three dollars in an accommodation tax and the person right after you walks up and pays at a counter-- they're paying maybe five dollars," Schertzing explained. "So it's just not fair."

Schertzing says the web sites' attorneys are stonewalling them so far. He also doesn't know how big his case is in terms of money and there are other cities around the country looking into this same thing. So these web sites may have many more lawsuits coming their way.

San Francisco and Reno, Nevada are two cities he knows that are investigating this tax issue.


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