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Court Rules OnlineTravel Companies Can't Be Taxed

Montgomery, AL – The Alabama Supreme Court has ruled that 16 online travel service companies, like Orbitz, Travelocity, Expedia and Priceline, do not have to pay lodgings taxes on part of the fees they charge customers.

The court ruled in a lawsuit filed by nine municipalities including, Birmingham, Huntsville and Gulf Shores. The court found that the companies should not have to pay the tax because the travel service companies do not own or operate hotels in any of the cities involved in the lawsuit.

An attorney for the cities, Jim Barger, said the companies buy the hotel rooms from the hotels for a discount price and the hotels pay the tax on those transactions. But he said no tax is paid on the service fee the online companies charge customers.

(Copyright 2012 by The Associated Press. All Rights Reserved.)

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