Travel sites ordered to pay $150M in back taxes

A judge has ordered some online travel sites to pay the state roughly $150 million for more than a decade’s worth of back taxes and interest.

The state attorney general’s office said that Tax Appeal Court Judge Gary W.B. Chang on Friday ruled that Hawaii’s general excise tax applies to the sale of hotel rooms by online travel companies. A press release says that the ruling could bring further tax collections of $20 million a year.

The release says the sites, including Expedia,, Hotwire, Orbitz, Travelocity and Priceline, have made sales of more than $2.7 billion in Hawaii hotel rooms since 2000.

The court also ruled that the sites did not owe transient accommodation taxes on the sales.

The release from the state attorney general’s office Saturday added that the sites collected sufficient money to cover the GET and TAT from consumers purchasing Hawaii hotel rooms but never filed any returns or paid any taxes to the state.

Gov. Neil Abercrombie called it a “significant ruling” for Hawaii.

“When I first came into office, I made this a top priority after I discovered that the previous administration had chosen not to pursue these taxes. I asked the attorney general and the tax director to aggressively and relentlessly go after these taxes that were due and owing. The court’s ruling shows that we were right to pursue this,” Abercrombie said in the release.

The sites can appeal the judge’s ruling.