Ga. court hears arguments on hotel taxes

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  1. AmericanGirl
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    AmericanGirl Silver Member

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    By The Associated Press

    ATLANTA — Atlanta attorneys asked Georgia's top court Monday to find that online travel companies have shortchanged the city on hotel and occupancy taxes, saying that Atlanta is owed millions of dollars in fees from and other online travel firms.

    The city asked the Georgia Supreme Court to overturn a Fulton County court ruling that found the online travel companies are not "innkeepers" and aren't obligated to follow a city law that requires them to remit 7 percent of the full room rate for any rooms they sell in Atlanta.

    The argument, which marked the fourth time the court has considered the debate, stemmed from a 2006 lawsuit the city filed against 17 online companies, including, Expedia, Travelocity and Orbitz. The lawsuit targeted the complicated pricing scheme used by the online travel sites.
    When consumers make reservations at the sites, they pay more for a room than the online outfits pay the hotels for the room, allowing the online companies to pocket the difference.

    The taxes are paid on that cheaper rate. That means if a travel site buys a room from a hotel at $50 and sells it for $100, the site sends the hotel taxes for the amount it paid and not the price it charged. The companies say the exact markup rate is confidential, and documents with that data were filed under seal.


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