Originally Posted by channa
Let's not confuse this issue. I think this issue was regarding things like "Expedia Special Rates" where the hotel has a deal with Expedia for a volume purchase of rooms.
So, if Expedia rate is $150, including a 35% markup, the hotel gets only $111. The hotel was remitting tax on the $111, as that was what they were paid. The claim by the cities was that the rate presented was $150, so tax should have been on $150, not $111.
While an interesting discussion, it's not relevant to how to figure out the priceline rate paid.
Priceline and Hotwire are each being sued by the city of Los Angeles for the same reason Expedia and Travelocity are being sued.
To start, in the case of Priceline, they DO NOT pre-pay for a block of discounted rooms.
What the lawsuit says is that Los Angeles is being cheated since the price of your accepted bid determines the amount of tax Los Angeles needs to be paid. But Priceline is only paying the city the tax on the amount that the hotel has set as their rate. So Priceline is pocketing the overbid and most likely an added tax amount based on that possible overbid which we can't see since they've budled the taxes and fees together.
Priceline nor any of the other 3rd party providers will prevail in a California court and will have to disclose the ACTUAL room tax paid by the consumer once again.
The Los Angeles Lawsuit Against Priceline:
http://www.consumeraffairs.com/news0...vel_sites.html