4

The City Of Houston Takes On Orbitz And Priceline

^
Keep Houston Press Free
I Support
  • Local
  • Community
  • Journalism
  • logo

Support the independent voice of Houston and help keep the future of Houston Press free.

The City of Houston and the Harris County-Houston Sports Authority are currently suing multiple travel websites such as Orbitz and Priceline over tax revenues it claims the sites owe it. Online travel sites pay wholesale prices to hotels for rooms and then customers book those rooms at a mark-up from that wholesale price. The sites pay taxes on the wholesale price, and keep whatever is made from the customer booking the room at the marked-up price.

Houston, along with cities and counties across the country that have also filed suits, is arguing that the sites are skirting Hotel Occupancy Tax laws and should be paying taxes on the amount that they make when the customer books the room.

"We estimate we, like many other localities, are losing millions of dollars," Frank Michel, Communications Director for the City of Houston, tells Hair Balls.

The sites, though, have already notched one victory. The Fourth Circuit Court of Appeals in Raleigh came down against Pitt County, N.C.

Art Sackler, executive director of the Interactive Travel Services Association, to which most of these sites belong, says the court wrote that the sites "have no role in the day-to-day operation or management of the hotels," and "cannot be said to operate the hotels," and for these reasons were not subject to the Pitt County Occupancy Tax.

"The hotel rooms are neither bought nor resold by the [online travel companies]," Sackler said. "They are intermediaries which facilitate travel, and have no ownership, control or inventory responsibility for hotel rooms."

The City of Houston filed its suit in March 2007, and is currently in the discovery phase. Despite the Court's decision in Raleigh, Michel says the city is confident that state laws will support their case.

-- James Holmes

Keep the Houston Press Free... Since we started the Houston Press, it has been defined as the free, independent voice of Houston, and we would like to keep it that way. Offering our readers free access to incisive coverage of local news, food and culture. Producing stories on everything from political scandals to the hottest new bands, with gutsy reporting, stylish writing, and staffers who've won everything from the Society of Professional Journalists' Sigma Delta Chi feature-writing award to the Casey Medal for Meritorious Journalism. But with local journalism's existence under siege and advertising revenue setbacks having a larger impact, it is important now more than ever for us to rally support behind funding our local journalism. You can help by participating in our "I Support" membership program, allowing us to keep covering Houston with no paywalls.

We use cookies to collect and analyze information on site performance and usage, and to enhance and customize content and advertisements. By clicking 'X' or continuing to use the site, you agree to allow cookies to be placed. To find out more, visit our cookies policy and our privacy policy.

 

Join the Press community and help support independent local journalism in Houston.

 

Join the Press community and help support independent local journalism in Houston.