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Travel websites push back against N.H. lawsuit over taxes

Online travel companies are pushing back against a state lawsuit that accuses them of underpaying
New Hampshire’s rooms-and-meals tax, with their trade group calling the litigation a “waste of taxpayer resources.”

The lawsuit, filed in Merrimack County Superior Court this month by the attorney general’s office, alleges websites such as Expedia, Orbitz, and Travelocity are misleading customers and underpaying the state government for the 9 percent sales tax on hotel rooms, restaurant meals and car rentals.

The lawsuit claims the websites pay the tax based on the “wholesale” price they pay hotels and rental companies for rooms and vehicles, but they bill customers for the tax based on the higher “retail” sale price and pocket the difference.

“This lawsuit is a waste of taxpayer resources and is grounded in a complete lack of understanding about what online travel agents do,” said Steve Shur, president of the Travel Technology Association, in a statement. “We don’t acquire hotel rooms. We don’t rent hotel rooms. We don’t operate hotels. We facilitate the reservation and in some instances collect the payment from the consumer which is then remitted directly to the hotel operator which are responsible for then submitting the tax payment.”

The lawsuit was filed Oct. 16, and Assistant Attorney General Philip Bradley said last week the websites’ practice likely costs the state hundreds of thousands of dollars a year in revenue.

Eleven companies are named in the lawsuit, all direct or indirect subsidiaries of Expedia, Orbitz, Priceline or Travelocity.

All four are members of the Travel Technology Association.

Similar lawsuits have been filed in a number of other states.

“Online travel agencies have prevailed in the vast majority of these cases and expect to do so in this matter as well,” Shur said.

(Ben Leubsdorf can be reached at 369-3307 or or on Twitter @BenLeubsdorf.)

Legacy Comments3

Don't expect this to happen often but I may agree with Sail. The State gets their 9% when the rooms , etc. are paid - what the actual end user is charged is irrelevant. Given our basic tax structure it is not surprising that the State is going after any money they can.

Gray Davis - former Gov of CA went after every penny he could seize and the citizens expelled him in a recall vote...... any bets that the state spends more on the lawsuit than the $$$ they are trying to seize?

I suspect the massive briefs that the Mega Law Firms will produce will send the lowly state lawyers into a tizzy. Nothing more anti Business anti jobs than govt minions

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