Next time you book a hotel room online, consider what happens to the taxes you’ve paid.
Occupancy taxes can take a big bite out of your vacation budget. San Francisco hits its hotel guests with a 14 percent tax. Washington’s is 14.5 percent. Chicago adds 15.4 percent.
Where does all the money go? That’s a question the courts have tried to answer in recent months.
Online travel companies, which make money by negotiating a lower rate with a hotel and then offering it at a higher price to travelers, believe they should pay hotel taxes based on the lower rate they negotiated with the hotel. Some cities disagree, alleging the companies should remit all the taxes they’ve collected — not just a portion.