Judge: Online companies owe Texas cities $55M

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Associated Press

Posted on April 5, 2013 at 7:02 PM

Updated Friday, Apr 5 at 7:02 PM

SAN ANTONIO (AP) — A federal judge has ruled that online hotel booking companies must pay more than 170 Texas cities $55 million in back taxes.

The Dallas Morning News reports (http://bit.ly/ZiRkaW ) U.S. District Judge Orlando Garcia's ruling Thursday follows a jury's determination in 2009 that booking companies like Expedia and Travelocity weren't paying their share in hotel occupancy taxes. That jury had awarded far less than the amount reached in the final judgment.

The cities had argued the booking companies did not pay tax on the cost the customer paid the companies for a hotel room. Rather, 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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Information from: The Dallas Morning News, http://www.dallasnews.com

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