CONCORD, N.H. (Legal Newsline) - New Hampshire Attorney General Joseph Foster announced a lawsuit Friday against multiple online travel companies for allegedly failing to properly remit the full amount of meals and rooms taxes due on overnight accommodations.
Foster and New Hampshire Department of Revenue Administration Commissioner John Beardmore announced the lawsuit against Travelocity, Expedia, Orbitz, Priceline and other online travel companies for allegedly failing to abide by the state's Meals and Rooms Tax Law. The law imposes a nine percent tax on the retail rate paid by consumers for overnight accommodations and vehicle rentals. After a consumer rents a room or car and pays the price of the rental plus the meals and rooms tax, the hotel or car company must remit the nine percent tax collected on the retail sale to the state.
Foster's lawsuit alleges that online travel companies are engaging in an unfair and misleading meals and rooms tax remittance practice. The lawsuit alleges the online travel companies acquire the right to rent cars and rooms from rental car companies and hotels at low wholesale rates before renting the cars and rooms to consumers at higher retail rates. The online travel companies allegedly only remit the meals and rooms tax on the wholesale rate they paid the car rental companies or hotels.
The lawsuit alleges that local businesses renting rooms and cars directly to consumers are put at an unfair disadvantage because they are paying the nine percent tax on the full retail rate. In addition, the lawsuit alleges the online travel companies charge consumers taxes and fees without informing them how the charges are broken down.
The lawsuit gives the online travel companies 30 days to file a response. In filing the suit, the state of New Hampshire joins multiple other states and local governments attempting to recover unpaid tax revenue from online travel companies.