Judge tosses suit over online hotel bookings

By ASSOCIATED PRESS
Published July 22, 2007

MIAMI - Orange County won't be able to collect higher hotel taxes from online travel companies after a judge threw out a lawsuit being brought by county officials.

The county contended the Internet hotel-booking agencies were not fully paying local taxes. County officials learned of the lawsuit's dismissal by Circuit Judge Cynthia Mackinnon on Friday. Orange County officials are just some of the latest to fail in their bid to get the companies to pay more in taxes.

The dispute in Orange County centered on the way online companies like Orbitz calculate their tax payments. The companies generally negotiate lower rates with hotels for a large number of rooms, then offer those rooms to customers at a higher price. But the companies pay taxes to the county on the lower rate, saying the higher price the consumer pays is the charge of the service not the cost of the room.

Orange County disagrees, and its lawyers told the Orlando Sentinel they expect to appeal the ruling. Auditors have calculated the county misses out on at least $5.5-million a year in hotel taxes.

[Last modified July 22, 2007, 01:32:15]