Philadelphia sues online travel agencies

Tuesday, 14 Jul, 2005 0

The city of Philadelphia is suing 17 online travel agencies, saying they aren’t paying their full share of the hotel occupancy tax.

The complaint says such well-known online companies as Expedia and Travelocity contract with hotels for discounted rooms and then sell the rooms to the public at marked-up prices.

The suit also alleges the agencies collect and pay the city’s 7% hotel tax based on discounted rates rather than the higher prices charged to consumers.

The city of Los Angeles filed a similar suit last year.

A spokesman for the city said it was not known how much Philadelphia was owed.

The city hired a local law firm to pursue the matter after the issue was brought up by a city councilman. The local firm of Berger & Montague P.C. has taken the case on a contingency basis of 30%, according to the Philadelphia Inquirer.

Report by David Wilkening



 

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