Jury Awards $20 Million in Texas Hotel Tax Dispute

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    Key and counter bell at hotel

    A jury has awarded $20 million to more than 170 Texas cities in a dispute over online booking companies and hotel occupancy taxes.
     
    Attorney Steve Wolens of Dallas, who represented the cities, said he expects an appeal by online booking agencies targeted in the 2006 lawsuit originally filed by San Antonio.
     
    The class-action suit, heard in San Antonio, was brought by cities in an effect to collect tourism tax revenue allegedly underpaid by Internet hotel room wholesalers.

    According to the lawsuit booking companies such as Expedia.com, Hotels.com, Priceline.com and Southlake-based Travelocity paid cities hotel occupancy taxes based only on the rates negotiated with the hotels rather than the rates customers paid when they booked online.

    The Star-Telegram reported Tuesday that an example was online companies booking blocks of rooms at $75 a night, reselling them for $100, then paying taxes on the lower rate.

    In a statement issued Tuesday, Expedia said it's disappointed with the jury's verdict against it and other online travel companies. The company intends to appeal.
     
    The verdict was returned Friday.

    More: Star-Telegram