In April 2014, the Puerto Rico Tourism Company (PRTC) sued Expedia,, Orbitz and (among other online travel companies) in the U.S. District Court for the District of Puerto Rico, alleging that the companies have underpaid Puerto Rico’s 9% hotel occupancy tax since 1999.

Online travel companies (OTCs) rent rooms from hotels at a discount and then rent the rooms to customers at a markup, but still at less than the hotel’s going rate. Puerto Rican law imposes a hotel occupancy tax on the “room occupancy rate” charged by a hotelier for occupancy of a room of lodging. A hotelier is defined as “any natural or juridical person that operates a lodging in Puerto Rico, including, without limitation, the owner, agent, proprietor, operator, lessee, mortgagor, sublessee or the holder of the same.”

The OTCs argue they are not hoteliers and that tax is only owed on an OTC’s purchase of room nights from the hotel and not on amounts charged by OTCs for their online services. Currently, the PRTC has requested a jury trial with the OTCs objecting, arguing that the issue is one of law and not fact and concluding therefore that a bench trial is the appropriate course of action.

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