Expedia.com lost a lawsuit in Columbus this week.
And it might impact you.
You see, Expedia gets rooms at a wholesale rate from hotels. It turns around and sells the rooms to consumers online, charging a higher rate, but a rate that's still lower than, say, you would if you walked up to Mr. Patel and plopped down your VISA card.
Expedia adds on "taxes and fees" that cover the sales tax due on the hotel room. Expedia pays the hotel the tax based on the wholesale rate it paid the hotel (that's the "taxes" part), and pockets the rest (the "fees" part).
But Superior Court Judge Doug Pullen ruled that's not right.
His ruling says Expedia must pay the hotel (which, in turn, pays the city) the taxes based on the rate it sells to the consumer.
Which means less money for Expedia.
How has Expedia responded?
Well, after the lawsuit was filed back in 2006, they quit booking rooms in Columbus. You can get a room in Phenix City, Alabama, just across the river from Columbus. But not in Columbus. From Expedia, that is.
So, how does this impact you?
Maybe not at all.
But then, again, what if other cities find out? And decide they want a piece of the pie?
Well, if Expedia has to start paying ALL cities the taxes based on the final sale price, rather than the wholesale price they pay, then Expedia will charge more.
If companies pay higher taxes, they'll recoup those by charging more to the consumer.
Raise taxes on oil companies, and gas will cost you more.
Raise taxes on corporate profits, and products and services will cost more.
If a company has to pay more tax money for your booking a hotel, that extra cost will be passed along to you. It won't simply go into someone else's pocket; it'll come out of your pocket.