The City of Dallas may be owed at least $10 million in unpaid hotel occupancy taxes. Some online travel companies are being sued in for allegedly not playing their fair share of hotel taxes. It’s estimated nationwide, $150 million remains uncollected.

Former Texas State Representative and husband of Dallas Mayor Laura Miller Steve Wolens is representing cities suing these popular online travel websites. But the City of Dallas isn't suing. Wolens says, ”I have discussed the issue with the Mayor-slash-my wife and the City Attorney and the Dallas Convention and Visitors Bureau and all are well aware of this but you'll have to ask them what there take on this.”

According to the lawsuits, this is generally how it works. Hypothetically, a travel website buys a room for $50 and sells it to you for $100, which includes their taxes and fees. The city charges a hotel occupancy tax -let's say it's 10 percent. The travel website collects the tax on the $100 - which is $10 -- but pays tax on the $50 it paid to buy the room. That’s $5. The site keeps the rest.

Art Sackler represents the Interactive Travel Services Association and speaks for the online travel companies. He says online travel websites don't set the hotel price. They pay the taxes the hotel tells them to pay. According to Sackler, “The online travel companies are intermediaries and rely on the hotels to tell them how much tax is owed. So the net rate plus the tax is sent back to the hotels and then back to the [taxing] jurisdiction.”

Sackler says the online companies won’t disclose precisely how they compute their taxes and fees because it could hurt the competitiveness of their industry.

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