Breckenridge said companies like Expedia have been purchasing rooms from local hotels and then selling them to customers at higher rates.

The suit names such online giants as Expedia, Travelocity, Orbitz, Hotwire, Hotels.com and Priceline.

According to the Summit Daily News, the companies have failed to pay sales and lodging taxes on the difference in price.

Town officials estimate the community has lost $1 million, including penalties and interest, over the last 10 years.

So, for instance, if Breckenridge sells a room to the travel companies at $100, and the travel company marks the unit up to $150, customers are charged tax on the $150, but the travel agencies do not remit the dollars back to municipalities, according to Trey Rogers, a partner at Rothberger, Johnson & Lyons LLP, the law firm in Denver representing Breckenridge in the suit.

Other cities in Colorado may sign on to the lawsuit.

By national estimates, one in every seven room rentals is booked through an online travel agency, said Breckenridge town manager Tim Gagen. Breckenridge is home to approximately 3,500 rental accommodation units, according to the paper.

In a similar case in San Antonio in 2009, the court sided in favor of the municipalities.

A similar suit is under way in Georgia as well.