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Court: Online travel firms must pay taxes to Arizona cities

Gavel shot
Posted at 4:21 PM, Sep 09, 2019
and last updated 2019-09-09 19:21:28-04

PHOENIX (AP) - The Arizona Supreme Court has ruled Orbitz and other online travel companies must pay sales taxes to cities for their work in arranging hotel stays for customers.

But it remains unclear whether the communities will be able to collect millions of dollars in back taxes.

The ruling on Monday grew out a 2013 effort by the cities to assess taxes against the sites for an eight-year period ending in April 2009.

The state's highest court ruled the online travel companies are subject to the sales taxes because, under one tax law, they serve as brokers for the hotels.

The 11 cities that demanded that the sites pay taxes were Phoenix, Apache Junction, Chandler, Flagstaff, Glendale, Mesa, Nogales, Prescott, Scottsdale, Tempe and Tucson.