In an interesting case that may severely affect the online travel brokers, the city of Atlanta is looking to get tax money they think is owed them by the online travel resellers to the tune of tens of millions of dollars. This could be a huge blow to the agents.

In its lawsuit, filed March 29 in Fulton County Superior Court, the city says the companies are collecting the full 7 percent Atlanta occupancy tax — a major revenue source for the city — from customers but remitting only part of it and keeping the rest as profit.

Suppose a travel site buys a room from Holiday Inn for $50 and sells it for $75, said partner L. Lin Wood of Atlanta law firm Powell Goldstein LLP, who is heading up the city’s case. The site sends the hotel an amount equal to 7 percent of the price it paid (which the hotel then remits to the city), when it should be sending 7 percent of the price it charged, Wood said.

Read the rest at Atlanta Business Chronicle