Online Travel Booking Services
It is now commonplace for people to book their travel arrangements through the Internet. When consumers book hotel rooms through the on-line companies that offer such services, they pay the advertised cost of the hotel room plus tax, which commonly called the “bed tax”. The Internet companies collect the bed tax based on the price that the customer pays for the hotel room, but some of them only pay tax based on the wholesale price the company paid for the room. These companies are therefore paying only part of the tax due to the taxing authorities – even though the customer paid the full amount of the tax – and are pocketing the difference. The estimated losses to the cities and states that rely on such revenue is substantial.
Baron & Budd represents several cities – including Los Angeles, California; San Diego, California; and San Antonio, Texas – in cases to recoup the taxes these companies owe. The City of San Antonio filed a class action suit on behalf of all cities in the state of Texas that have been hurt by these companies’ unethical practices.
