The City of Washington, D

Essay

The city of Washington, D.C. filed suit against online travel companies for not paying the full amount of sales tax due on the rooms their customers use while in D.C. The online travel companies charge their customers the 14.5% sales tax on the full price of the room, but pay D.C. only 14.5% on the amount the travel services actually paid for the room. The online travel companies maintain that the sales tax rules are not clear, so they pay only on the actual charges, not the full retail cost of the rooms. Discuss the ethical issues you see in the online travel companies' position on the sales tax.