The S.C. Supreme Court has ordered Travelscape, an online hotel booking company, to pay the S.C. Department of Revenue back sales taxes on thousands of South Carolina hotel room reservations made during a five-year period.
The Supreme Court rejected Travelscape’s arguments that it did not have a significant enough presence in the state to make it eligible to pay a state sales tax on the hotel rooms it was getting for people purchasing them on the company’s Internet site.
DOR had asserted that Travelscape — a Nevada company owned by Expedia, one of the world’s largest online travel companies — owed the state $6.3 million in sales taxes and penalties for a period from 2001 to 2006, the ruling said. However, the court said the online company will have to pay only the taxes and not the penalties.
The ruling did not spell out the exact amount of back taxes that Travelscape will have to pay. Taxes paid by individuals and companies are usually considered confidential. So, exactly how much of the $6.3 million Travelscape will pay DOR may never be made public.
DOR did not respond to requests for comment on the ruling.