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Seven Illinois Municipalities Band Together to File Suit To Recover Unpaid Taxes from Online Travel Companies

April 7, 2013

Clifford Law Offices, with a consortium of law firms, filed a lawsuit Friday (April 5, 2013) in federal district court on behalf of seven Illinois local governments to collect unpaid hotel taxes from a number of online travel agencies.

Among the towns suing the online companies are the cities of Warrenville, Oakbrook Terrace and Rockford and the villages of Bedford Park, Oak Lawn, Orland Hills and Willowbrook. Together they have filed a class action in the district court for the Northern District of Illinois to address ongoing tax evasion by more than a dozen out-of-state companies including Expedia, Travelocity and Priceline that market and sell hotel rooms in Illinois but who fail to pay or remit taxes on the amount customers pay to stay in those rooms.

These companies have been named as defendants in a number of lawsuits across the United States for similar practices. Some of these cases have resulted in the companies being ordered to pay hundreds of millions of dollars in taxes and penalties for their conduct.

Courts have recognized the inequity of the online companies competing with local Illinois hotels but the online companies fail to pay taxes on the full rates charged, thereby maintaining a competitive advantage. “The lawsuit filed in Illinois seeks to even the playing field,” said Robert A. Clifford of Clifford Law Offices. “There needs to be greater transparency in exactly what these companies are charging its online customers.”

Clifford Law Offices, along with Paul A. O’Grady of Peterson, Johnson & Murray in Chicago, John W. Crongeyer of Crongeyer Law Firm in Atlanta, and William Q. Bird and Kristen L. Beightol of Bird Law Group in Atlanta are representing the plaintiff municipalities.

A press conference will be held at noon today (Monday, April 8) at Clifford Law Offices, 120 N. LaSalle St., 31st Floor, Chicago. The press conference also will be streamed live on the internet by visiting the firm’s website at www.CliffordLaw.com.

To view the complaint filed in federal court click here.

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For further information, please contact Michael Krzak, partner at Clifford Law Offices, 312-899-9090.

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