Make us your home page
Instagram

Today’s top headlines delivered to you daily.

(View our Privacy Policy)

McCollum sues to collect from online hotel booking companies

TALLAHASSEE — Attorney General Bill McCollum filed suit Tuesday against two leading Internet travel companies, accusing Expedia and Orbitz of cheating the state and local governments out of millions of dollars in sales tax revenue from online hotel bookings.

McCollum's court petition asks a state judge to rule that the taxes, already paid by hotel guests, belong to the government, and that the businesses are engaging in unfair and deceptive trade practices. A Republican who's running for governor on a pro-business, low-tax platform, he aligned himself with counties and cities in opposition to the online travel booking companies.

"They've collected the money," McCollum said of the companies. "They're pocketing the difference as a profit. That's what's really gross about this in our judgment. The online travel companies are taking the money that's really owed to the state of Florida."

If the state wins in court, McCollum said, he would then decide whether to seek back taxes from the companies. In tourist-friendly Florida, that could be in the hundreds of millions of dollars.

The industry criticized McCollum's action and accused him of being used by plaintiffs' lawyers who are pushing lawsuits against online travel firms. Contrary to McCollum's assertions, the industry said, online travel companies do not purchase blocks of rooms and are not withholding tax revenue owed to government.

"Every penny of taxes owed to the state and its municipalities is being remitted to them," said Andrew Weinstein, a spokesman for the Interactive Travel Services Association, an industry trade group. "We're very disappointed that the attorney general would align himself with the plaintiffs' attorneys making these false claims."

McCollum charged that the online companies pay tax only on the wholesale cost of a room rental, not the higher retail cost. He used as an example a broker paying $118 per night, but charging a customer $159 a night. For a four-night stay, the net loss to the state in tax revenue would be $9.84.

McCollum's action drew praise from the Florida Association of Counties, which has been at the forefront of pushing litigation seeking to clarify whether the online booking companies are paying their share of taxes. Five more counties filed a lawsuit Tuesday on the issue: Pinellas, Polk, Leon, Flagler and Manatee. It is unclear when a court will take up the issue.

"We're very happy about it," said Sarah Bleakley, special tax counsel to the counties group. "If he stops that practice, I think that would be beneficial for consumers and taxpayers as well, and the state."

McCollum's Democratic opponent in the governor's race, Chief Financial Officer Alex Sink, also praised the attorney general's action. Sink, who initiated a discussion of the issue at last week's Cabinet meeting, said she appreciated McCollum "pursuing this action to collect the full amount owed to the state of Florida."

Steve Bousquet can be reached at bousquet@sptimes.com or (850) 224-7263.

McCollum sues to collect from online hotel booking companies 11/03/09 [Last modified: Tuesday, November 3, 2009 9:55pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. 'Battle of the Sexes' is a fine time capsule comedy, and not really about the tennis

    Movies

    In 1973, tennis champion Billie Jean King joined a two-ring circus with hustler Bobby Riggs, billed as a Battle of the Sexes amid the women's liberation movement. Fifty million Americans watched the pop spectacle on TV.

    Emma Stone and Steve Carell in the film "Battle of the Sexes." [Fox Searchlight Pictures.]
  2. Hillsborough will not add extra days for storm

    Blogs

    Public school students in Hillsborough County do not have to come to school for additional days to make up for time missed in Hurricane Irma, the district announced Monday.

  3. Tom Cruise's son Connor Cruise to DJ Halloween party at Tampa's Hard Rock Cafe

    Blogs

    Whenever Tom Cruise comes to Clearwater on Church of Scientology business, he keeps a low profile. Occasionally he'll Connor Cruise attended Wild 94.1 Wild Splash in 2016.

  4. Bicyclist struck in St. Petersburg dies as result of injuries

    Accidents

    ST. PETERSBURG — A bicyclist who police said ran a red light and was struck by a car last week died over the weekend.

  5. Eight Gators, including Antonio Callaway and Jordan Scarlett, face felony fraud accusations

    Blogs

    At least eight Florida Gators face potential felony charges on accusations of fraud, according to Alachua County court records.

    Star receiver Antonio Callaway is among at least four Florida Gators who face potential felony charges on accusations of fraud.