Mayor Sharon Weston Broome’s administration will ask the Metro Council to approve hiring outside attorneys to go after online travel companies for unpaid sales taxes owed to the city-parish.
In a measure that will be introduced, though not debated, at today’s council meeting, the administration will propose retaining Baton Rouge attorneys Drew Talbot and Alejandro Perkins to help determine how much money online travel companies like Travelocity and Priceline may owe to the city-parish and then pursue collecting the funds, which could include litigation.
“It’s a new concept,” Broome’s spokesperson Mark Armstrong says. “Mr. Talbot specializes in sales tax litigation and represents multiple jurisdictions on this issue. It’s a matter of getting us what is due.”
He was not able to comment further because of privacy laws surrounding disclosures about sales tax liabilities of specific entities or individuals.
While the concept may be new for Baton Rouge, such lawsuits have been around for several years. In 2016, the Louisiana Department of Revenue and the city of New Orleans sued Priceline, Orbitz, Expedia, Hotels.com, Hotwire and Travelocity, among others, for nearly $23 million the online travel giants allegedly failed to pay dating back to the late 1990s.
The suit claims the companies contracted with hotels for a wholesale price on rooms but then charged the customers a higher retail price, paying taxes only on the price they paid the hotels.
“When a hotel rents a room on its online website, it charges and collects and remits taxes based on the retail rate,” the suit reads. “When an (online travel agency) furnishes a hotel room on its website, it charges and collects taxes at or above the retail rate, but remits on a lesser wholesale rate. This is fundamentally unfair.”
Dozens of similar suits have been filed elsewhere in the country. It is unclear, however, how successful they have been in returning unpaid revenues to municipalities and states. As for the suit filed by New Orleans and the state department of revenue, a decision appears far in the offing. Four years after being filed, the case has become increasingly complex and contentious and is still slowly wending its way through the court system.
Talbot did not return a call seeking comment on his plans for helping the city-parish. He and Perkins will agree to do the work on a contingency basis, according to the proposed contract, which will pay them 25% of any sales taxes they collect.
The Metro Council will discuss the contract at its May 27 meeting.
[polldaddy poll=10551892]
