This just posted over at SD:
"Quote from LoveDealz17 :
I agree. Since the terms and conditions changed late last week, I think people should be aware of the possible taxes. Flyertalk and budget travel are both posting messages from the legal team at LMT:
(I don't know if I am allowed to post the link, but here are the details)
"Received this confirmation from Last Minute Travels legal team, below! Hope this helps:
Fees: When you successfully book during The World for $1 sale, you will receive a hotel stay per your specifications as found on the confirmation voucher. This does not include any fees incurred at the hotel or during your vacation (example: resort fees, phone charges, transportation, etc.).
Taxes: The value of hotel rooms purchased during the World for $1 sale may be taxable as income. Individuals are solely responsible for the payment of all federal, state and local income or excise taxes on prize. Depending on the value of the rooms, you may be required to provide a social security number for 1099/income tax filing purposes. If required, Last Minute Travel will send you the appropriate documentation for tax filing. You are not responsible for hotel taxes.
Posted By Blog Editor on January 30, 2009, 10:52 AM"
Like I said, for those already going it is still a great deal, but for those that are thinking they are getting a $5000.00 hotel for a week for nothing, they should be aware of the possible taxes at 10% or 15%.
For those that keep insisting there are no taxes, how do you know that? Where is your backup?
If they do it this way--then they are saying that it might be considered like winning a prize in a contest or lottery....and at the end of the year they would produce a 1099-G that you would have to report on your taxes as income."
Here's my issue: the "value" of a hotel is arbitrary--they fluctuate. If they are advertised for $1 then THAT is the value of the hotel. It's the old "Peppercorn" theory of a contract. This is being advertised as a sale of hotel rooms for $1 a night, NOT a prize, lottery or sweepstakes.
Any accountants/tax prep folks here?