A group of online travel companies have filed a lawsuit against North Carolina saying recent amendments to the state's sales tax law violate the Internet Tax Freedom Act.

The amendments, which went into effect Jan. 1, require that fees paid to third-party intermediaries, such as Orbitz, Travelocity and Hotels.com, be included in the gross receipts of hotel operators that are subject to sales and hotel room taxes.

Online travel sites argue that the changes amount to a discriminatory tax because they impose a higher tax on online transactions compared to those that offer similar services offline.

The lawsuit was filed in Wake County Superior Court by Orbitz, Trip Network Inc., Travelocity, Travelscape, Hotels.com and Hotwire.
 

A nearly completed review of backlogged tax returns shows that seven thousand people who did not know they had overpaid their taxes are due refunds that add up to $2.3 million, the Revenue Department's new secretary told lawmakers today.

Secretary David Hoyle, a former state senator from Gaston County, told them that the department has cleared the backlog of flagged items from individual tax returns. He told them they will need to pass legislation next year in order for the department to return the money.

The ethics bill kicking around the state Senate could see some major additions tomorrow.

Senate Minority Leader Phil Berger said he and other Republicans are looking to beef up the bill in several ways that range from more open personnel records to limits on legislative leaders' campaign giving to colleagues.

Berger said he plans to add in the ethics provisions that the state House passed last year. They include disclosure of fundraising by political appointees and a prohibition on contractors from donating to campaigns.

Berger would add more transparency to personnel matters by making public disciplinary actions for state and local employees, as well and letters of recommendation from elected officials. The Senate bill currently only makes salary and employment histories public.

State Sen. David Hoyle, a Gaston County Democrat and Senate Rules Chairman, has also expressed an interest in making disciplinary actions public, something that the State Employees Association of North Carolina opposes.

Our recent series, Keeping Secrets, showed that North Carolina has one of the nation's most secretive laws regarding personnel matters, making little more than current salaries and current positions public.

Another planned provision that will likely trigger discussion is limiting the amount of campaign money that legislative leaders can steer toward a legislative candidate. Currently, legislative leaders can steer unlimited amounts of money to campaigns by running them through their political parties. The practice has resulted in legislative races in swing districts costing hundreds of thousands of dollars. Berger, a Rockingham County Republican, wants to limit the giving to no more than $100,000 per candidate.

A state Senate judiciary committee is expected to take up the bill at 10 a.m. Tuesday. It would need to clear the committee, the full Senate and the House before the legislative session comes to a close.