Hawaii recovers $53.1M in general excise taxes from online trave - Hawaii News Now - KGMB and KHNL

Hawaii recovers $53.1M in general excise taxes from online travel companies

HONOLULU (HawaiiNewsNow) -

The state of Hawaii has recovered $53.1 million in general excise taxes, penalties and interests from online travel companies that sold hotel rooms, rental cars and other services over the Internet.

The payment follows a Hawaii Supreme Court ruling that national online travel companies – including Travelocity, Expedia and Orbitz – must pay back the tens of millions of dollars in back taxes after profiting from selling services in Hawaii.

“The importance of the Hawaii Supreme Court ruling is the precedent it establishes,” Attorney General Doug Chin said in a statement. “People or companies who provide goods and services through the Internet that are used or consumed in Hawaii are subject to Hawaii taxation, despite being domiciled in other states.”

The Court rejected the companies’ argument that they were not doing business in Hawaii and said, “the companies are not passive sellers of services to Hawaii consumers. The companies actively solicit customers for Hawaii hotel rooms and actively solicit hotels to contractually provide the right to sell on their website the right of occupancy of hotel rooms.”

The case went back to the Tax Appeal Court to re-determine the amount of general excise taxes, penalties and interest the companies owe to the state, which was later determined on Sept. 22.

The state said the companies took in more than $2.7 billion in revenue in Hawaii between 2000 and 2011.

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