That’s how much Expedia could owe Hawaii and scores of U.S. city and county governments in tax payments for online hotel bookings over more than a decade, according to a review of dozens of lawsuits and tax-revenue records.
Expedia had less than one-tenth that amount set aside to address the potential liability as of Sept. 30, according to a filing with the Securities and Exchange Commission (SEC).
The Bellevue investor favorite, along with other travel websites, has shorted these governments by paying taxes on the wholesale price it pays hotels for rooms, according to the suits.
It and other sites should instead be paying taxes on the full-room price paid by online customers, these local governments say.
Expedia and other sites have told the courts that under local ordinances, taxes apply to entities that own or control hotels — not to the websites that help them book rooms. Expedia spokeswoman Tarran Vaillancourt declined to comment on the pending litigation or the tax-payment issue.
The suits seek to claw back what amounts to a few dollars per room per night. But that adds up to as much as $400 million a year in suppressed state and local government receipts from online-travel bookers, according to a 2011 estimate by Michael Mazerov, a senior fellow at the Washington, D.C.-based Center for Budget and Policy Priorities, which advocates for low-income families.
Since then, revenue for the biggest online-travel sites has grown about 70 percent.
