New Hampshire has sued several popular online travel sites, claiming the companies aren’t paying their full share of the state’s 9 percent room and meals tax.
New Hampshire joins a number of state and local governments that have filed similar lawsuits.
The lawsuit argues companies like Travelocity, Orbitz and Priceline are only paying taxes on the wholesale cost for hotels and car rentals, not the retail rates their customers pay.
Assistant Attorney General Philip Bradley says state law requires the tax be paid on the higher retail rate.
“The difference between the wholesale and the retail rate can be in the order of 25 to 40 percent,” Bradley says. “So if you wanted to pick a number in the middle and say 30 percent, that’s approximately how much the state could be losing in tax on these transactions.”
He says that can add up to hundreds of thousands of dollars in lost revenue each year for the state.
The lawsuit, filed in Merrimack County Superior Court, seeks back taxes, penalties, as well as an order for the companies to pay based on the retail rate going forward.
In similar lawsuits, state supreme courts in South Carolina and Georgia have ruled the online sites should be paying taxes on the higher retail rates.
