Court: OTAs Owe for Back Taxes on Online Car Rentals

The State of Hawaii says that online travel companies (OTAs), such as Priceline, Expedia, and Travelocity, owe another $50 million in back taxes for car rental revenues earned since 2004, according to a report by Hawaii News Now. The case was brought before the Hawaii Supreme Court on April 5.

Three years ago, the Hawaii Supreme Court said that Priceline, Expedia, Travelocity, and other OTAs had to pay $53 million in state back taxes for hotel room bookings, says the report.

"They're creating an uneven playing field," said Attorney Gary Cruciani, who represents the state of Hawaii, told Hawaii News Now. "Instead of paying taxes like every other citizen or every other business does, they put the money in their pockets."

Representing the OTAs, Attorney Paul Alston told Hawaii News Now that the online rental car purchases would have been exempt from excise taxes since 1991 because "that would severely undermine the economics of rental car transactions in Hawaii."

The Hawaii Supreme Court is expected to take several months to make a ruling, according to the report.

Click here for the full Hawaii News Now report.

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