Florida AG Suing Expedia, Orbitz For Back Taxes

Florida's attorney general is suing online travel provides Expedia (Nasdaq: EXPE) and Orbitz (NYSE: OWW) alleging that the companies owe the state millions in back taxes for fees they collected on hotel room reservations.

Online booking companies pay for hotel rooms at a negotiated rate before selling them at a higher price. The companies pay the tax on the amount they paid for the room. But, under Florida law, the taxes must be paid on the total amount and must include any charge or surcharge to guests.

The lawsuit claims the companies have been keeping some of the tax as profit. Similar complaints have been filed by cities including New York, Chicago, Philadelphia, San Francisco and Atlanta.