Montana Governor Sues Internet Travel Sites

By Terry Green
Nov 9 2010

The governor of Montana announced today that he has sued several of the online travel sites for failure to pay all associated taxes to the state on bookings.

This newest lawsuit is part of the ongoing battle between Montana governor Brian Schweitzer and the online travel sites. The sites stand accused of failing to pay the full percentage of taxes to the state when they book travel plans for their customers.

Facing budget shortfalls, Montana instituted new taxes on hotel rooms and resorts around the state. While this was met with anger by the owners and operators, many have found a way around them, by using the online travel companies to book their rooms.

Now Schweitzer is battling back and he has named some of the most popular companies in his latest lawsuit. Among those companies, Expedia, PriceLine and Orbitz are the largest, but Travelocity has been added as well.

Montana also instated a bed tax over two years ago that is not being collected by the online travel booking sites. This is causing a massive shortfall in the proposed tax collections that the state is counting on for their annual budget.

However, the internet companies are standing firm in their opposition to the law. They have suggested that they are not required to collect the taxes because the state has refused to update their system.

Furthermore, they place disclaimers on all new bookings to Montana that show that the bed and room taxes will be collected by the innkeepers when the traveler checks in.