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City of Chandler seeks to recoup sales taxes from online travel companies

City of Chandler seeks to recoup sales taxes from online travel companiesThe city of Chandler is turning to legal action to recoup $131,000 in sales taxes that city officials allege online travel companies haven’t paid.

The Arizona Republic reports that the figure is based on a preliminary audit of several cities in metro Phoenix that alleges about $8 million in unpaid taxes are owed to the cities by at least four online travel companies, including Expedia, Orbitz, Priceline and Travelocity.

Currently, if an online travel company buys a discounted hotel room at, for example, $40, then sells it to a customer for $100, it does not pay taxes on the $60 difference.

But Chandler officials believe those sales should qualify as a brokerage transaction under the city’s tax code and should be taxed for the full amount.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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