Cities and States, Mired in Suits Over Hotel Taxes, Change Laws to Address Practices of Online Companies

Six years after the first municipal lawsuit was filed, seeking to collect hotel taxes from online reservation companies, a growing number of cities and states have adopted a forward-looking approach. While not giving up on the hope of collecting millions in back taxes from companies such as Expedia and Hotels.com, city, county, and even state governments are changing laws to ensure that online reservation companies can no longer avoid collecting and remitting occupancy taxes on the full value of the service charge to customers.