Tax Appeal Court Judge Gary W.B. Chang ruled that online travel companies will be obligated to repay the state of Hawaii $150 million in general excise tax obligations on the sale of Hawaii hotel rooms dating back to 2000. The online companies, which included Expedia, Hotels.com, Priceline, Hotwire, Orbitz and Travelocity had argued that the tax did not apply to them since their business is conducted outside of the state of Hawaii. However, Chang ruled that the general excise tax is a “privilege tax imposed on businesses for the privilege of doing business in the state.” Ron Heller, the legal council for the online travel companies has stated that his clients will certainly appeal the ruling.
The state of Hawaii’s tax office estimated that the amount of unpaid taxes was approximately $110 million and that interest owed equaled an additional $40 million. David Louie, the State Attorney General, supported Judge Chang’s ruling and stated, “Hawaii hotels are good corporate citizens, paying their fair share of taxes to support the state’s infrastructure such as roads, schools, personnel and other costs and the online travel companies need to also play by the rules and pay their fair share.” Governor Neil Abercrombie added, “This is a significant ruling for the people of Hawaii. When I first came into office, I made this a top priority after I discovered the previous administration had chosen not to pursue these taxes. The court’s ruling shows that we were right to pursue this.”
Source: Honolulu Star Advertiser, 1-13-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
Global Executive Realty, LLC
www.myhawaiihomesearch.com
www.myhawaiicondo.com
www.myhawaiidreamhome.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
Global Executive Realty, LLC
www.myhawaiihomesearch.com
www.myhawaiicondo.com
www.myhawaiidreamhome.com
