Originally Posted by suranyi
Second, the victim here is not the consumer, i.e. the hotel resident, and no one pretends that it is. The victim is the city of Los Angeles, which is out the tax revenue. This is not a suit on behalf of online travellers, it's a suit on behalf of the taxpayers of Los Angeles.
Ed
I disagree. I don't think Los Angeles has any right to that money whatsoever. If the hotel, that is within the taxing authority of L.A., sells the room to Travelocity for $50, then L.A. should only receive tax on the $50. That's the amount of revenue that was recognized by the hotel in L.A.
Personally, if I agree to pay $100 "All-in" for a hotel room through Travelocity, I don't really care if its $100 with no tax or $80 with $20 tax. My decision is based upon the $100 I have to part with.
But, if
anyone has a right to that money (other than Travelocity), its the individual who earned it and spent it. I don't see how L.A. has any right to that money whatsoever. There was never any revenue in L.A. (beyond the $50) on which L.A. can assess the tax.
Now, if Travelocity is located in L.A., then I could see the city's argument. In that case, a business located in L.A. would be selling a hotel room and generating revenue in L.A. - no different than what L.A. hotels do everyday.