Brett_Tabke - 2:10 pm on May 13, 2006 (gmt 0)

Major Cities Sue Online Travel Agents [chicagotribune.com] Associated Press

Several cities around the country have sued Web-based travel clearinghouses such as Expedia, Travelocity and Orbitz, claiming they have failed to pay millions of dollars in hotel taxes. San Antonio filed a class-action lawsuit this week seeking to recover lost taxes, and Los Angeles, San Diego, Philadelphia, Atlanta and Chicago have filed similar suits. The state of Texas and two of its biggest cities, Dallas and Houston, are considering their own actions. San Antonio believes online travel agencies negotiate room discounts from hotels, and sell the rooms at a markup to consumers. The agencies, though, only pay hotel taxes on the wholesale price.