New York, NY , Oct. 23, 2025 (GLOBE NEWSWIRE) — An independent analysis by Capital Link of statutory law, audited filings, and the City of New York’s enforcement records confirms that LuxUrban Hotels Inc. is compliant with all applicable New York State and City sales-tax requirements. “They Got It Wrong,” says The Capita Link.
Between 2020 and 2025, LuxUrban generated about $200 million in total revenue across 11 U.S. cities, with only ≈ $56 million (28 %) derived from New York City.
Under N.Y. Tax Law §§ 1101(b)(8) and 1105(e), online travel agencies (OTAs) that process prepaid bookings are legally defined as “room remarketers” and are the parties responsible for collecting and remitting sales and occupancy taxes. OTA filings, the City’s 2024 settlement records, and LuxUrban’s SEC Form 10-K show that those taxes were properly remitted, and LuxUrban’s direct collections were filed and paid in the ordinary course.
The data indicate no unpaid New York tax liability and suggest possible over-remittance caused by overlapping OTA and direct payments.
Summary of Legal Authorities
| Source | Key Point |
| N.Y. Tax Law § 1105(e) | Imposes sales tax on “the rent for every occupancy of a room … in a hotel.” |
| N.Y. Tax Law § 1101(b)(8) | Defines “room remarketer” (e.g., Expedia, Booking.com) as a hotel operator for tax purposes. |
| 20 NYCRR § 527.9 | Implements sales-tax collection rules for hotel occupancies. |
| TSB-M-10(10)S (Aug 2010) | Clarifies that remarketers must collect tax on the full retail price charged to guests. |
| TB-ST-331 (May 2012 / July 2025 update) | Restates that OTAs are hotel operators and must collect and remit applicable sales taxes. |
| Expedia Inc. v. City of New York Dept. of Finance, 22 N.Y.3d 691 (2014) | Upholds New York’s authority to require OTAs to remit taxes on full rental charges. |
| NYC Mayor’s Office of Special Enforcement (OSE) Settlement, Mar 2024 | Confirms $4.8 M pre-2022 short-term-rental revenue; taxes filed and paid; $1.2 M civil fine resolved zoning violations. |
| LuxUrban Hotels Inc. Form 10-K (2023) | States: “The majority of sales tax is collected from customers by our third-party sales channels and remitted … by these channels.” |
I. Background and Operational History
LuxUrban did not operate hotels before December 2021. From 2019 to 2021, its predecessor (CorpHousing Group / SoBeNY) leased apartments for short-term stays. OSE’s audit found about $4.8 million in total revenue from those rentals and verified that all related sales and occupancy taxes were filed and paid (OSE Press Release, Mar 5 2024).
In March 2024 LuxUrban entered a stipulated settlement with OSE: a $1.2 million civil fine for zoning violations and a complete release of all pre-2022 liabilities upon payment. No tax deficiency was alleged.
II. Legal Framework: OTA Responsibility Under New York Law
Since 2010, New York’s tax code has treated OTAs as hotel operators for transactions in which they set prices and collect payment.
TSB-M-10(10)S explains that “web-based travel companies” must register, collect, and remit tax on the full amount charged to customers.
TB-ST-331 reiterates that “a room remarketer … must collect sales tax on the charge to its customers.”
Accordingly, when a guest prepays through Expedia or Booking.com, those entities—not the hotel—are the statutory collectors of New York sales and occupancy tax.
III. Quantitative Analysis
| Rate | Theoretical Max Tax | Status | |||
| 2019–2021 | ≈ $4.8 M | 100 % | ≈ 14 % | ≈ $672 K | Filed & paid |
| 2022–2025 | ≈ $200 M | ≈ 28 % ($56 M) | ≈ 14 % | ≈ $7.8 M | Paid via OTA / direct |
Because OTAs remitted taxes on roughly 92 % of bookings, LuxUrban’s direct exposure was limited. The company’s own filings and the OSE settlement together cover the rest, producing full compliance and likely over-payment.
Sales Tax Liability Analysis: It would be mathematically impossible for LuxUrban to have a sales tax liability even a fraction of the stated amounts.
IV. Findings and Legal Assessment
- Pre-2022: OSE confirmed taxes on $4.8 M of revenue were filed and paid.
- 2022 onward: OTAs collected and remitted ≈ 92 % of taxes.
- Direct bookings: Filed and paid timely.
- Aggregate: Evidence of duplication and over-remittance.
Large unpaid-tax narratives are unsupported by statute, audit data, or arithmetic.
V. Commentary – When Common Sense Must Prevail
Even before hotel operations began, LuxUrban’s entire New York rental base was ≈ $4.8 million. At 14 %, tax owed would be ≈ $672 thousand — an amount already paid. Claims of nine-figure liabilities ignore law and math alike.
Too often, commentators repeat numbers without verification, creating self-perpetuating error. Factual diligence is a duty shared by analysts, journalists, and investors alike.
VI. Industry Implications and Path to Accountability
The LuxUrban case has become a touchstone for clarity in hospitality-tax compliance. It demonstrates that:
- OTA-merchant structures are well-defined in law.
- Misinterpretation of filings can damage reputations and markets.
- Accurate, evidence-based reporting is critical to investor trust.
Ensuring that LuxUrban’s record is represented truthfully—in courtrooms and in public discourse—protects not only one company but the integrity of factual reporting across the industry.
VII. Exhibit References
Exhibit A – NYC OSE Stipulated Settlement Order (Mar 2024)
Exhibit B – N.Y. Tax Law §§ 1101(b)(8), 1105(e); TSB-M-10(10)S; TB-ST-331
Exhibit C – LuxUrban Hotels Inc. Form 10-K (2023), Revenue Recognition Section
References & Authorities
- N.Y. Tax Law §§ 1101(b)(8), 1105(e); 20 NYCRR § 527.9
- N.Y. Dept. of Taxation & Finance, TSB-M-10(10)S (Aug 2010)
- N.Y. Dept. of Taxation & Finance, Tax Bulletin TB-ST-331 (May 2012 / July 2025 update)
- Expedia Inc. v. City of New York Dept. of Finance, 22 N.Y.3d 691 (N.Y. Ct. App. 2014)
- NYC Mayor’s Office of Special Enforcement Press Release (Mar 5 2024) and Stipulation of Settlement (N.Y. Sup. Ct.)
- LuxUrban Hotels Inc. Form 10-K (2023) (SEC Item 7 MD&A).
- Public coverage from Gothamist (Mar 4 2024) and Hotel Dive (Mar 2024) for contextual reporting of settlement facts.
