A new lawsuit alleges that more than 20 online travel companies intentionally underpaid hotel room taxes to the state by hundreds of millions of dollars.
The suit was filed by Las Vegas communications consultants Sig Rogich and Mark Fierro, seeks damages from the most recognizable names in the business, including Orbitz, Travelocity, Expedia, Priceline and Hotels.com.
According to the suit, the companies for years have made deals with Las Vegas hotels to buy rooms at discounted prices and then selling them on their websites to visitors at higher rates. The companies have been charging their customers for the room taxes based on the more expensive retail rates but have only been paying the state at the discounted prices, the suit says.
“There is no way the online travel companies did this mistakenly,” said Rogich, president of The Rogich Communications Group and a former senior White House assistant to President George H.W. Bush. “They intentionally withheld this money that rightfully belongs to taxpayers in Nevada.”
Rogich is a friend and confidante to Nevada’s elected officials, including former Senate Majority Leader Harry Reid and former governors Paul Laxalt, Kenny Guinn and Jim Gibbons. He also served as U. S. ambassador to Iceland under Bush.
Fierro, a former television anchor who specializes in public relations and crisis management, called the lawsuit “an opportunity of a lifetime to help make the taxpayers of Nevada whole.”
“The bad news is this money should have been going to Nevada’s schools, law enforcement organizations, infrastructure and a broad array of other needs of Nevada citizens,” Fierro said. “The good news is that when we win this case, and we are confident that we will prevail, it will rank among the biggest windfalls that Nevadans have experienced since the landmark 1998 settlement with the tobacco industry.”
Rogich, who founded the Las Vegas advertising firm R&R Partners, and Fierro are seeking damages on behalf of the state of more than three times the amount of the potential loss in public funding, and between 15 percent and 30 percent of the proceeds collected by the state for themselves.
The money “rightfully should be returned to the people of Nevada, especially during these challenging times that we are experiencing as a community,” Rogich said.
Companies listed in the lawsuit are: Orbitz Worldwide, LLC; Orbitz LLC; Orbitz Inc.; Travelscape LLC; Travelocity Inc.; Cheap Tickets Inc.; Expedia Inc.; Expedia Global LLC; Hotels.com LP; Hotwire Inc.; Booking Holdings Inc.; Priceline.com LLC; Travelweb LLC; Travelnow.com Inc.; Booking.com USA Inc.; Agoda International USA LLC; Hotel Tonight Inc.; Hotel Tonight LLC; Tripadvisor LLC; Tripadvisor Inc.; Trip.com Inc.; and Remark Holdings Inc.
