Skift Take
This is a big ruling because Chicago is a large city with lots of hotels. But, the online travel agencies will undoubtedly appeal the decision in this seven-year-old case, and the dispute will continue in Chicago and elsewhere.
Online travel agencies, such as Hotels.com, Orbitz.com and Expedia.com, have been underpaying hotel taxes they remit to the city of Chicago, a Cook County judge ruled Friday.
In a case more than 7 years old, Cook County Judge Robert Lopez Cepero ruled that such online travel companies can be defined as hotel operators, and they have been violating the Chicago Hotel Accommodations Tax Ordinance, which levies a 4.5 percent tax on room rates.
The controversy, in Chicago and across the country, centers on whether hotel occupancy tax is due on the retail amount that travel agencies collect from consumers or only the wholesale amount that agencies pay the hotels after subtracting their fees. Since online hotel booking began, Internet travel agents have remitted hotel taxes on the lesser amount.
At issue is surely millions of dollars the city could collect in back taxes, potential
