NEW HAMPSHIRE AG SUES PRICELINE, ORBITZ, EXPEDIA, TRAVELOCITY

     (The following press release from the New Hampshire Attorney General's 
Office was received by e-mail and was reformatted. The sender verified the 
statement.) 
New Hampshire Sues Online Travel Companies for Failing
to Properly Remit Meals and Rooms Tax  
Attorney General Joseph A. Foster and N.H. Dept. of Revenue
Administration Commissioner John T. Beardmore announce that the State
has filed suit against Priceline, Orbitz, Expedia, Travelocity and other
online travel companies.  The complaint alleges that the companies
failed to properly remit the full amount of Meals and Rooms Taxes due on
overnight accommodations and vehicle rentals.   
New Hampshire's Meals and Rooms Tax Law imposes a 9% tax on the retail
rate paid by the consumer for overnight accommodations and vehicle
rentals.  A consumer renting a room or car directly from a hotel or car
rental company pays the price of the room or rental plus the Meals and
Rooms Tax due on this retail sale.  The hotel or car rental company
remits the 9% tax collected on the retail sale to the State. 
In its complaint the State alleges that online travel companies acquire
the right to rent rooms and cars from hotels and rental car companies at
low wholesale rates.  They then rent the rooms and cars to consumers at
higher retail rates, adding an additional charge for "taxes and fees."
The online travel companies remit the Meals and Rooms Tax only on the
wholesale rate they paid the hotels or car rental companies, rather than
on the retail rate paid by the consumer, and retain the difference.
Given the growing number of hotel rooms and rental cars that consumers
now rent from online travel companies, New Hampshire is losing an
increasing amount of Meals and Rooms Tax revenue because the online
travel companies are remitting taxes on only the wholesale rate rather
than on the retail rate as required by the Meals and Rooms Tax Law. 
The State claims that the online travel companies' Meals and Rooms Tax
remittance practice is unfair and misleading.  Consumers are charged
"taxes and fees," but are not informed how those charges are broken
down, and local businesses renting rooms and cars directly to consumers
are put at an unfair disadvantage because they are paying the 9% tax on
the full retail rate.   
A copy of the lawsuit filed in Merrimack County Superior Court is
attached.  The online travel companies will have 30 days to file a
response after they have been served with the complaint.  In filing this
lawsuit, New Hampshire joins a growing number of States and local
governments seeking to recover unpaid tax revenue from online travel
companies.  
(rml) NY