D.C. can collect taxes on online travel bookings

(photo courtesy quasireversible via Flickr)

WASHINGTON (AP) - A judge has ruled that the District of Columbia can collect sales taxes on the rates customers pay for hotel rooms they book through online travel companies.

The city had been collecting taxes on the wholesale rates that the companies pay to hotels.

The city says companies including Expedia, Orbitz, Travelocity and Priceline owe millions of dollars in unpaid taxes. Dozens of similar lawsuits have been filed across the country, and cities have met with mixed success in cases already decided by courts.

Washington Attorney General Irvin Nathan called the ruling an important step in the district's efforts to collect the money.

The president of a trade association representing the travel companies called the ruling an "outlier" and says the companies would win on appeal.