January 14, 2013

Hawaii orders OTAs to pay $150M in back taxes

The state attorney general's office said that Tax Appeal Court on Friday ruled that Hawaii's general excise tax applies to the sale of hotel rooms by online travel companies. A press release says that the ruling could bring further tax collections of $20 million a year.

A judge has ordered some online travel sites to pay the state roughly $150 million for more than a decade's worth of back taxes and interest.

The sites, including Expedia, Hotels.com, Hotwire, Orbitz, Travelocity and Priceline, have made sales of more than $2.7 billion in Hawaii hotel rooms since 2000.

The court also ruled that the sites did not owe transient accommodation taxes on the sales and collected sufficient money to cover the GET and TAT from consumers purchasing Hawaii hotel rooms but never filed any returns or paid any taxes to the state. Gov. Neil Abercrombie called it a "significant ruling" for Hawaii.

Get the full story at Hawaii News Now