Expedia loses another lawsuit over pricing structure

Bellevue-based Expedia Inc. has lost another lawsuit over the collection of hotel/motel sales tax collection.

Officials from the city of Columbus, Ga. sued the online travel company, arguing that it collected hotel taxes based on a room’s higher retail price while paying the lower wholesale price.

The Georgia Supreme Court ruled 4-3 that Expedia must collect taxes on hotel room rentals based on the price a customer pays, and transfer that money to the city.

A lower court had previously ruled in the city’s favor.

Municipalities nationwide have filed suits against online travel companies, alleging that their pricing schemes shortchange them of tax revenues.

Earlier this month, a King County Superior Court judge ruled against Expedia in a class-action lawsuit related to the same pricing model.

The judge ruled that the company should pay out $184 million in service fees to customers who booked a hotel stay from mid-February 2003 to mid-December 2006.

The online travel companies have argued that hotel/motel tax laws do not cover fees and other expenses included in the room rate charge, and that their pricing structures are privileged information.