Aiken County and the City of Aiken will each receive around $18,000 from some of the top hotel booking websites for unpaid hotel taxes.
The settlement, approved by Circuit Judge R. Markley Dennis at a hearing Monday in Charleston, ends a lawsuit that Aiken County, along with the City of Columbia and North Charleston, filed in July 2013. This deal will send funds back to local jurisdictions of what they would have collected before Aug. 1, 2014. Aiken County will receive a little more than $18,000 - $8,000 for the settlement and an additional $10,000 for being a lead plaintiff in the class-action lawsuit. The City also will receive about $18,000, because most hotels sit inside City limits; and the City of North Augusta, which has less than 10 hotels, will receive nearly $1,400.
The lawsuit claimed hotel sites, including Travelocity, Expedia, Orbitz and Priceline, were holding the accommodations tax funds and fees collected instead of redistributing them back to local governments. These hotel-booking sites acquire large blocks of hotel rooms at discounted rates, then resell them at a profit. Other states have also sued these sites when their local government officials discovered that the websites were basing their tax payments on the wholesale prices, Charleston's The Post and Courier reported.
Aiken County and the cities of Aiken and North Augusta each collect a 3 percent accommodations tax. Accommodations tax funds are the gross proceeds from the rental or charges for any hotel room, campground space, lodging or other sleeping accommodations. When local governments receive these funds, they are then turned around to fund tourism-related projects, recreational needs and infrastructure.
Charleston attorney Jesse Kirchner, who helped file the case, told The Post and Courier that the online travel websites also have agreed to register with all municipalities in the state and "remit accommodations taxes going forward, which is a pretty big deal, too," he said.
"It wasn't a ton of money for us, but you know it's a revenue source," North Augusta City Administrator Todd Glover said. " ... While it wasn't huge, it does level out the playing field."
The Aiken Standard reached out to Aiken County Administrator Clay Killian and interim City Manager Roger LeDuc, but did not get a response by press time.
The Post and Courier contributed to this story.
Maayan Schechter is the local government reporter.