NORTH MYRTLE BEACH, SC (WBTW) – North Myrtle Beach City Council passed a resolution Monday night to join a lawsuit against online travel companies to recover business license fees.
The lawsuit claims online travel companies enter into contracts to buy rooms at negotiated rates and then sell them at a higher price.
According to city spokesperson, Pat Dowling, the websites only pay taxes based on the lower negotiated rates, “and it’s the difference between what they buy that hotel room for from the local accommodation and and what they sell it for online.”
The lawsuit alleges the travel sites kept the difference between the taxes charged and the amount payed to the hotels.
“If they’re paying us for the room they purchased that’s one thing, but they also have to for the sale at a higher cost to the consumer whose online using that site, using that service, and that’s what we’re going after,” said Dowling.
He says the lawsuit won’t affect businesses based in the area.
“Local businesses, which would be hotels, pay their business licenses,” said Dowling.
Angela Seddinger is the owner of Grand Strand Vacations, and she says online booking sites have had a tremendous impact on her business over the years, “and not necessarily positively.”
“I don’t like having to pay my fair share and have bricks and mortars and then other people coming into the industry and try to take a piece of the pie and not pay their fair share,” said Seddinger.
She says she supports the lawsuit and hopes it will help level the playing field with the competition.
“I wish they would all do what they’re supposed to do, but they don’t. Everybody’s trying to make a buck,” she said.
News13 reached out to Travelocity for comment, but a spokesperson declined due to the pending litigation.
The issue is not new for the City of North Myrtle Beach. It previously filed a lawsuit against online travel companies to recover unpaid taxes and received a $192,600 settlement as a result.
The City of North Myrtle Beach joins the City of Charleston, North Charleston, Myrtle Beach, Columbia and the Town of Hilton Head.
