EXCLUSIVE: Online travel tax dispute grows

EXCLUSIVE: Online travel tax dispute grows
Published: Jan. 8, 2014 at 11:24 PM HST|Updated: Jan. 8, 2014 at 11:45 PM HST
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HONOLULU (HawaiiNewsNow) - After slapping the nation's largest online tour companies with a $750 million bill for back taxes, the state says the companies owe another $40 million.

State Tax Court filings indicate that Priceline.com, Expedia and eight other Internet travel providers booked tens of millions of dollars in rental car business but paid no taxes on them.

"This is a new round of assessments issued to the online travel companies involving their rental motor vehicle transactions in Hawaii," said Deputy Attorney General Hugh Jones

The latest assessments come a year after state Tax Judge Gary Chang ordered the online companies to pay the state nearly $650 million in general excise and hotel room taxes.

The money was owed over ten years but then Gov. Linda Lingle declined to pursue the companies after meeting with them behind closed doors.

Since then, the state issued another $100 million in hotel room and G.E. back taxes for the 2012 calendar year.

"Ultimately, if these assessments are upheld, the money goes into the general fund of the state of Hawaii," Jones said.

In the latest round of assessments on car rentals:

-- Priceline.com owed the largest amount, $14.2 million;

-- Next was Hotwire, which owed $10.6 million;

-- That was followed by Expedia, which owed $9.3 million.

Attorneys for the online companies did not return calls. They have appealed to the state Supreme Court, which will likely hear the case later this year.