Expedia, Priceline, Others Win Breckenridge, Colo. Tax Appeal

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By Tripp Baltz

Expedia Inc., Priceline.com Inc. and other online travel companies aren’t required to pay accommodation taxes to Breckenridge, Colo. because they aren’t lessors or renters of hotel rooms, the Colorado Court of Appeals ruled.

In a ruling Jan. 25, the court affirmed a district court decision finding the companies aren’t lessors or renters for purposes of the town of Breckenridge’s hotel accommodation tax ordinance. The Court of Appeals distinguished between Breckenridge’s ordinance and Denver’s lodging tax, the focus of an April 2017 Colorado Supreme Court ruling that went against the online travel companies (OTCs). The state Supreme Court denied a petition for rehearing sought by the OTCs in May 2017.

In the Breckenridge case, the ordinance stated that the legislative intent was, in part, to collect an accommodation tax from “every person who furnishes for lease or rental” any accommodation located in the town. The ordinance imposed a 3.4 percent accommodation tax on the price paid for the leasing or rental of any hotel room, motel room, or other accommodation.

“Under Denver’s lodging tax, ‘furnishing lodging’ indicates making hotel rooms available to purchasers,” according to the Court of Appeals’ opinion. “On the other hand, the Breckenridge code imposes liability only on those who furnish property for leasing or renting. And only those with a possessory interest can furnish property for leasing or renting. Accordingly, OTCs only furnish the opportunity to rent hotel rooms from hotels.”

‘Essentially Brokers’

Because Breckenridge hotels maintain possession of the rooms for rent and are the sole grantors of the right of occupancy, they are lessors or renters under the tax ordinance, and the OTCs are “essentially brokers,” the Court of Appeals ruled.

“Under the Breckenridge ordinance, an OTC does not have an interest that would allow it to furnish for rent any hotel room,” according to the court’s opinion. “On the contrary, it appears that the OTCs only ‘furnish’ purchasers the opportunity to rent rooms from hotels. Therefore, construing the statute as a whole and according to its plain meaning, we conclude that the OTCs are not subject to Breckenridge’s accommodation tax.”

Sean Connelly of Connelly Law LLC in Denver, attorney for the OTCs, declined to comment.

Michael Plachy and Joy Ann Woller of Lewis Roca Rothgerber Christie LLP didn’t return requests for comment.

The case is Town of Breckenridge v. Egencia, LLC , Colo. Ct. App., No. 16-CA-1901, 1/25/18 .

To contact the reporter on this story: Tripp Baltz in Denver at abaltz@bloomberglaw.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bloombergtax.com

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