Expedia, Priceline Owe State Excise Tax

Online travel companies like Expedia must pay Hawaii's general excise tax on certain car rental transactions.Photo via sporst/Flickr.
Online travel companies like Expedia must pay Hawaii's general excise tax on certain car rental transactions.Photo via sporst/Flickr.

State Circuit Judge Gary W.B. Chang ruled that online travel companies — including Expedia, Priceline, Travelocity, Orbitz, Hotwire, and others — must pay Hawaii’s general excise tax on certain rental car transactions in Hawaii, according to a report by Hawaii’s Department of the Attorney General.

Hawaii had issued tax assessments of general excise taxes, interest, and penalties to online travel companies for failing to file tax returns and pay general excise taxes for tax years 2000 through 2012, says the report.

Last year, the Hawaii Supreme Court concluded online travel companies must pay general excise tax on the sale of hotel rooms in Hawaii. The court upheld tax assessments on gross receipts from online travel car rentals — not sold as part of a travel or tour package with other services like airline or hotel reservations, according to the report.

The Court also ruled that under a special provision in Hawaii’s general excise tax law for tourism related services, these companies owe general excise taxes on their net receipts from car rental transactions that were included in a travel or tour package sold to consumers.

The final amount of taxes, penalties, and interest to be collected by Hawaii is yet to be determined, but it’s expected to be in the millions of dollars, according to the report.

Comment On This Story

Name:  
Email:  
Comment: (Max. 10000 characters)  
Please leave blank:
* Please note that every comment is moderated.

Newsletter: Sign up to receive latest news, articles, and much more.

Read the latest

Auto Focus Blog: A blog covering fleets, auto rental and the business of cars

The Customer Isn’t Always Right

Not caving to a customer with a blatant agenda may have consequences, especially for a small rental company that relies on stellar Yelp ratings to advertise. But business integrity must prevail.

The Truth Behind Compact Van Depreciation

Why are large van values holding up better than their compact counterparts, and will it last?

Car Rental’s Call to Action on Autonomous Vehicles

The car rental industry has built-in advantages to support a world with driverless cars, but it needs to take the next step in partnering with autonomous vehicle stakeholders.

Job Finder: Access Top Talent. Fill Key Positions.