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OTAs and TOs sue New York City over new hotel tax

Online travel companies and the U.S. Tour Operators Assoc filed a lawsuit against New York City, challenging the legality of the city's recently amended hotel occupancy tax. The tax requires resellers of New York hotel rooms to remit a tax based on the full retail rate paid by the customer as a “condition of occupancy”, including some service fees and charges. The amended occupancy tax went into effect Sept. 1. The new tax “illegally attempts to extend the New York City hotel room occupancy tax to amounts charged by thirdparty travel intermediaries for their services,” the lawsuit claims. The complaint goes on to state that “the amounts the plaintiffs earn for facilitating the booking of hotel rooms are not a condition of occupancy.”

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