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Online travel companies sue N.C. over changes to sales tax law

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.
 

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