Report surfaces on Internet taxation issue

Monday, Sept. 29, 2003 | 10:51 a.m.

Clark County officials say they didn't generate a report explaining how Internet companies that buy and resell large quantities of hotel rooms may in some instances be paying a lower percentage tax rate than they should.

Pat Kujawa, senior manager of finance and audit for Clark County's Department of Business Licensing, said Friday that she learned of the report -- an unsigned 15-page presentation that was faxed to Las Vegas newspapers and the office of Rep. Shelley Berkley -- when reporters called her about it.

A representative of Berkley's office said today he would investigate the matter, but the congresswoman hasn't been previously contacted about the issue.

Kujawa last month told In Business Las Vegas, a sister newspaper to the Las Vegas Sun, that the county is continuing to research how to close loopholes in existing tax laws that enable third-party hotel room purchasers such as Travelocity and Expedia.com to underpay room taxes in some cases.

Critics of those companies say they charge customers tax rates on the retail rates those customers pay, but only remit taxes on the wholesale amount charged by the hotel, and then pocket the difference.

Expedia has said it's not obligated to pay the higher rate because most tax laws say taxes are to be collected by "hotel operators."

The report faxed to Berkley listed Kujawa as an authority on local tax revenue.