Online Companies Owe Texas Cities $55 Million, Judge Says

SAN ANTONIO (April 5, 2013)—U.S. District Judge Orlando Garcia has ruled that online hotel booking companies must pay more than 170 Texas cities $55 million in back taxes.

Garcia's ruling Thursday follows a jury's determination in 2009 that such booking companies as Expedia and Travelocity weren't paying their share in hotel occupancy taxes.

The jury awarded far less than the amount reached in the final judgment.

The cities argued the booking companies did not pay tax on the cost the customer paid the companies for a hotel room, but instead taxes were collected just on the rate the hotel itself received for the room.

Travel Technology Association spokeswoman Robin Reck says the association expects the ruling to be overturned on appeal.

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