hotels-com

Evanston aldermen tonight will be asked to approve amendments to the city’s hotel-motel tax designed to force online travel companies to pay it.

Online travel companies purchase blocks of rooms at wholesale rates from hotels and then resell them to the public. They have generally contended that they are not obligated to pay local hotel taxes.

But in June the City of Chicago won a ruling in circuit court that the services are “operators” within the definition of Chicago’s hotel tax code and are required to pay the tax.

Now Evanston’s law department is asking the aldermen to define “operator” in its hotel tax ordinance to make it clear the online firms are meant to be included.

Evanston City Attorney Grant Farrar says a dozen other Illinois municipalities including Arlington Heights and Des Plaines are contemplating a class action lawsuit to recoup municipal hotel taxes from online companies going back as far as 10 years.

Evanston collected about $1.5 million from its hotel tax last year.

Top: The website of Hotels.com, the named defendant in the Chicago case.

Bill Smith is the editor and publisher of Evanston Now.

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