Update: Gov. Lingle’s Former Tax Director Says Lingle Quashed Probe Into OTC Tax Liability

Another update on the unfolding dispute between online travel companies (OTCs) and the State of Hawaii on up to $500 million in unpaid taxes relating to their hotel room bookings in Hawaii.

In a deposition, former Hawaii Director of Taxation, Kurt Kawafuchi, said that former Governor Lingle quashed a probe into the unpaid tax liabilities of online travel companies such as Expedia and Travelocity.

In response, Lingle’s former chief of staff defends the former governor by claiming that it was “100%” the decision of the former Tax Director, Kurt  Kawafuchi.  Maybe so.  But its hard to believe that  Governor Linlge was not at least consulted on a $500 million tax decision.  Whether this hurts Lingle’s US Senate campaign remains to be seen, but it can’t be good for her.

Click here to see the news coverage.

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