County to carry on tax fight against online travel agencies

INDIAN RIVER COUNTY – Indian River County will remain a part of a class action lawsuit brought against various online travel sites, including Priceline.com, for not paying the full amount of tourist development taxes.

Commissioners voted 4-1 to stay in the suit, which Monroe County brought against Priceline and eight other Web sites, in hopes of collecting some of the money Monroe officials say is due on unpaid taxes. The lawsuit alleges that online travel sites do not pay the full amount of tax on the hotel rooms they provide to their online customers. Instead, they pay a tax based on the wholesale rate for “purchasing” blocks of rooms – then turn around and “sell” the rooms at retail price to customers.

The county takes in approximately $1.3 million annually from the tourist development tax, according to County Budget Director Jason Brown.

He could not tell commissioners exactly how much the county might be losing from the tax differential. However, he said that if the lost revenue accounted for about 5 percent, it would mean approximately $65,000 annually that is at stake.

County Attorney Alan Polackwich told commissioners that if they remained in the class action lawsuit, there would be no cost to the county win or lose.

“There’s no cost to us,” he said. “There’s no risk to us.”

County Administrator Joe Baird said that this would be an opportunity for the county to try to get money without having to do anything other than stay in the suit.

The concept did not appear to sit well with Commissioner Gary Wheeler, who voted against staying in the lawsuit.

He said he disagreed that the Web sites were not paying the appropriate taxes and expressed opposition to the government going after money just because it could.

“If I were on the jury, I’d probably side with Priceline,” Wheeler said.

Wheeler explained that the taxes are paid – albeit at the wholesale rate – but they are being paid.

Other commissioners expressed similar thoughts but decided they owe it to the taxpayers to try to get what money they can.

“It’s not for us to decide” if the Web sites are in the right or wrong, Commission Chair Peter O’Bryan said.

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