Officials with Las Vegas-area municipalities are reviewing whether companies that buy and resell large quantities of hotel rooms are paying their fair share of taxes, a newspaper reported Friday.
In Business Las Vegas, a sister newspaper to the Las Vegas Sun, reported officials are trying to determine if Internet companies like Hotels.com that buy and re-sell thousands of room nights a year should be paying more taxes.
Las Vegas-area officials aren't the only ones concerned about potential under-payment of room taxes. New York and Florida authorities have also raised taxation issues with New York-based InterActiveCorp, which operates Hotels.com and is the majority owner of Expedia Inc., the industry leader in online hotel room sales.
At issue is whether Internet booking companies and other third-party distributors should be paying taxes based on the bulk rates they obtain from their hotel partners or if they should pay based on the higher retail room rate the occupying consumer pays.
Because of the volume of hotel room sales in Southern Nevada, the difference between the two rates could result in substantial amounts of lost revenue.
"We're in the process of working on an ordinance to address this," said Pat Kujawa, senior manager of finance and audit for Clark County's Department of Business Licensing.
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