InterActiveCorp in Talks Over Tax Accounting

InterActiveCorp(IACI Quote) is in discussions with several states and local governments about the tax accounting for discount hotel rooms sold through its Expedia(EXPE Quote) and Hotels.com(ROOM Quote) units.

At issue are blocks of tickets purchased by the online subsidiaries then retailed to customers. Expedia and Hotels.com currently calculate their tax rate off the wholesale cost of the blocks, but might in some instances be required to pay taxes on the amount paid by at retail.

The applicable tax provisions vary among jurisdictions, and many of them limit the obligation to collect occupancy taxes to businesses that are hotel "operators," a category InterActiveCorp doesn't think includes Expedia or Hotels.com, the company said in a release. ...