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Your online travel agent owes millions to the state of Hawaii

Your online travel agent owes millions to the state of Hawaii
photo courtesy of shutterstock

When it's time to book a vacation these days, odds are you turn to one of the major online travel booking sites, because they're convenient and can save you lots of money on rooms, flights and rental cars. But, the prices offered by these deal sites could be going up for vacationers headed for Hawaii in the near future because the state just won a major court ruling that could force these websites to pay up big time.

Major travel booking sites like Expedia, Orbitz and Priceline don't believe they owe taxes to Hawaii because none of the companies has physical offices in the state. However, Hawaii's tax department disagrees and argues that nine travel booking sites owe the state millions of dollars in unpaid taxes because they book rooms on the islands. And, the state's supreme court agrees. The case began in 2010 and the court's decision could result in these sites paying Hawaii over $600 million.

"Bottom line, these online travel companies derived substantial revenues from the sale of Hawaii hotel rooms and they need to pay their fair share," [Hawaii Attorney General Doug] Chin said.

Next page: How will this affect the price of your vacations in the future?
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