(Mary Flood, Chron.com 01/23/2010)
Houston this week lost its bid to collect millions of dollars in hotel occupancy taxes from online travel sites.
Houston, like other cities around the country, sued Expedia, Priceline.com, Orbitz, Travelocity and other online booking companies, saying the city wasn't getting the full amount of taxes for each Houston hotel room booked.
Houston alleged that the companies violated its hotel occupancy tax ordinance and sought millions of dollars. The city argued that online bookers should pay taxes on what the customer paid.
But the online services argued that taxes should only be paid on their wholesale cost for the hotel room and the city had no right to tax the online service fees or the room markup.
Harris County Civil District Judge Brent Gamble this week tossed the case out of court based on arguments from the online services that include that they aren't hotels and their fees should not be subject to hotel taxes.
Of course, there will be appeals and (since no bad political idea ever truly goes away) eventually a new lawsuit worded differently or with a different tax basis used to try and extract more money from the hotel/motel sector in order to pay for the increasingly unworkable debt load on our shiny new stadiums and city owned hotels.
Desperate times and all of that.