Almost every business has state and local tax obligations. Online travel agencies just tend to have more.
There are basically three reasons tax obligations for online travel agencies (OTAs) are so complicated:
- The U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc. allows states to tax sales by online travel agencies
- Marketplace facilitator laws make OTAs responsible for many lodging taxes
- The regulatory complexity of state, county, and city tax requirements makes it hard for OTAs to identify and comply with all tax obligations
Source Avalara
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