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LA sues travel sites for hotel tax chicanery

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The city of Los Angeles has sued a group of internet travel sites for allegedly skimping on hotel room taxes.

Priceline.com, InterActiveCorp's Expedia, Cendant's Orbitz and Sabre's Travelocity.com were all named as the travel services in question in the lawsuit filed in Los Angeles Superior Court. The travel sites currently pay taxes on discounted room rates worked out with hotels. They then up the room rate, up the taxes and sell the more expensive rooms online to consumers, according to a report from Reuters.

The lawsuit alleges that the travel companies pocket the money made between the different tax rates. LA also claims that the sites will often charge more in fees and taxes than is required, Reuters said.

"The lawsuit has no merit," Kendra Thornton, a spokeswoman at Orbitz, told the news service.

LA is looking to get class action status for its lawsuit. ®

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