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Online Travel Companies Ordered to Pay Approximately $225M in Penalties and Unpaid General Excise Taxes

March 22, 2013

DALLAS -- On March 19, 2013, the office of the Attorney General of the State of Hawaii issued a press release announcing that Honolulu-based Tax Appeal Court Judge Gary W.B. Chang granted the State of Hawaii’s motion for summary judgment, finding that Online Travel Companies (“OTCs”) selling Hawaii hotel rooms over the Internet owe the State approximately $70 million in tax penalties, including interest, for failing to file or pay the Hawaii general excise tax over a period of eleven years. This ruling follows an earlier decision in January 2013, when Judge Chang ruled that the OTCs, including Expedia, Hotels.com, Hotwire, Orbitz, Travelocity and Priceline, owed the State of Hawaii approximately $158 million in unpaid taxes.

The State of Hawaii is represented by McKool Smith principals Steven Wolens and Gary Cruciani, who have also helped other government entities secure unpaid hotel occupancy taxes.

With more than 180 trial lawyers across offices in Austin, Dallas, Houston, Los Angeles, Marshall, New York, Silicon Valley, and Washington, DC, McKool Smith has established a reputation as one of America’s leading trial firms. The firm has won more National Law Journal and VerdictSearch "Top 100 Verdicts" over the last five years than any other law firm. McKool Smith represents leading clients across a broad range of practice areas, including complex commercial litigation, intellectual property, bankruptcy, and white collar defense.