Arlington Heights to join online hotel tax lawsuit
Arlington Heights will join a lawsuit with several other Illinois municipalities in an effort to recoup tax money lost when people book hotel rooms through outside travel websites.
The Arlington Heights committee of the whole on Monday approved a legal agreement to join several other communities in a class-action lawsuit to recoup what could amount to hundreds of thousands of dollars from online travel companies.
Other Illinois municipalities involved include Warrenville, Oak Brook Terrace, Rockford, Bedford Park, Willowbrook, Tinley Park, Burr Ridge, Orland Park, Orland Hills, Oak Lawn and Des Plaines. Schaumburg, Itasca and Lombard are scheduled to vote on joining the group in the next few weeks, according to a memo from Arlington Heights finance director Tom Kuehne.
“The websites pay wholesale for rooms and then sell them at a retail rate, and we aren't getting money from the websites in hotel tax,” Kuehne said.
The city of Chicago and the village of Rosemont are pursuing separate legal actions against online travel companies because of the large number of hotels and motels in those municipalities individually.
The issue between local municipalities and online sites where people can book hotel rooms is a nationwide problem, said assistant village attorney Robin Ward.
There have been successful lawsuits or settlements in state including Georgia, Missouri, South Carolina and Wyoming, she said.
According to the legal agreement, Arlington Heights does not have to pay any upfront costs to join the suit and will not incur any fees if they lose.
“I don't see a downside to anything that has been proposed here,” said Trustee Thomas Glasgow, who is also an attorney.
Arlington Heights has a 5 percent village hotel tax rate and expects to bring in more than $900,000 in revenue from that tax this year, Kuehne said.
The village could be owed between $60,000 and $120,000 a year. The lawsuit will ask for fees over the past 10 years.
“It's a significant amount of money,” Kuehne said. “The online travel companies will fight this tooth and nail, though.”