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Oklahoma sues online travel companies over hotel room taxes

State becomes latest to seek millions from companies.
BY NOLAN CLAY Modified: November 3, 2010 at 6:23 am •  Published: November 3, 2010
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The state of Oklahoma is alleging in a lawsuit it has been cheated out of millions of dollars in hotel room taxes.

The state is suing for back sales taxes from Priceline.com, Expedia, Orbitz, Travelocity.com and other online travel reservation companies that offer discount hotel rooms.

The lawsuit — filed Tuesday in Oklahoma County District Court — is the latest against the online travel industry. A year ago, Florida became the first state to sue the online travel companies. San Antonio and other Texas cities last year won $20 million in their 2006 lawsuit against Expedia and other companies.

The lawsuit was initiated by Gov. Brad Henry.

"We believe some out-of-state firms have not paid their appropriate state sales tax bill and have essentially shorted Oklahoma taxpayers out of hundreds of millions of dollars," said a spokesman for the governor.

The lawsuit alleges the companies act deceptively, collecting taxes from travelers "at or above" retail room rates but only paying the state taxes on wholesale rates. The state hired law firms from Georgia and Oklahoma to file the lawsuit.

Most of the hotel tax cases against the industry have not been successful, said Andrew Weinstein, a spokesman for the Interactive Travel Services Association.