Booking.com is embroiled in a legal battle with the state of Hawaii over the application of the state's General Excise Tax (GET) to online accommodation bookings. According to Hawaii Free Press, the online travel agency (OTA) is seeking to revive its challenge to the state's tax rule, which levies GET on accommodation bookings made through its platform. The core of the dispute centers around whether Booking.com can preemptively challenge the tax rule before actually paying the tax.
This legal action has significant ramifications for the tourism and hospitality sectors in Hawaii. If Booking.com prevails, it could potentially allow other OTAs to challenge similar tax regulations and potentially reduce their tax liabilities. This would, in turn, have an impact on state revenue derived from the thriving tourism industry. Moreover, the outcome has implications for how and when businesses can challenge tax regulations in Hawaii. The case highlights the complex interplay between state tax laws and the operations of large online platforms, particularly within the context of the travel industry.
This isn't the first time Booking.com has faced tax challenges in Hawaii. A 2013 ruling by the Tax Appeal Court ordered online travel companies, including Booking.com, to pay a significant amount in back taxes. This decision underscores the state's efforts to ensure that OTAs are complying with local tax laws. With the new case, the legal interpretation of those laws is tested once more. The current litigation highlights the ongoing tension between the state's need for revenue and the strategies employed by OTAs to manage their tax obligations.
