Bloomberg Law®, an integrated legal research and business intelligence solution, combines trusted news and analysis with cutting-edge technology to provide legal professionals tools to be...
Ashok Chandra | Bloomberg Law Expedia, Inc. v. City of New York Dept. of Finance, 2011 NY Slip Op 08648 (App Div, 1st Dept Nov. 29, 2011) The Appellate Division of the Supreme Court of New York determined that a tax increase implemented by New York City's Department of Finance on online travel companies was not valid. The court observed that the enabling statute only allowed for a tax increase on hotel occupants and not travel agencies. Plaintiffs, including Expedia, Inc. and other online travel companies commenced an action against New York City's Department of Finance, challenging the constitutionality of Local Law 43, which amended New York City's Administrative Code § 11-2501 to have the existing hotel room occupancy tax "include imposition of the tax on the service or booking fees earned by plaintiffs in connection with hotel room reservations." Expedia at 1. Plaintiffs contended that defendants did not have the authority to expand the occupancy tax. The court noted that the "enabling legislation authorized the City of New York to impose on a hotel occupant a tax at a rate of up to six percent of the rent or charge per day for each hotel room." Id. The court determined that the language of the enabling legislation did not confer upon the City broad taxation powers with regard to imposing a hotel occupancy tax on the plaintiffs. Rather, the court observed that the language of the enabling statute specifically only allowed the city to expand the tax with regard to hotel occupants. The court observed that a statute that levies a tax "must be narrowly construed" and "any doubts concerning its scope and application are to be resolved in favor of the taxpayer"Debevoise & Plimpton v New York State Dept. of Taxation & Fin., 80 N.Y.2d 657, 661 (1993). The court noted that the plain meaning of the phrase in the enabling statute did not encompass the service fees charged by the online travel companies and it was improper for legislation to be extended so as to permit the imposition of the tax in this situation. The court observed that in order to extend the tax to cover online travel companies, the state legislature would have to take action. DisclaimerThis document and any discussions set forth herein are for informational purposes only, and should not be construed as legal advice, which has to be addressed to particular facts and circumstances involved in any given situation. Review or use of the document and any discussions does not create an attorney-client relationship with the author or publisher. To the extent that this document may contain suggested provisions, they will require modification to suit a particular transaction, jurisdiction or situation. Please consult with an attorney with the appropriate level of experience if you have any questions. Any tax information contained in the document or discussions is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code. Any opinions expressed are those of the author. The Bureau of National Affairs, Inc. and its affiliated entities do not take responsibility for the content in this document or discussions and do not make any representation or warranty as to their completeness or accuracy.©2014 The Bureau of National Affairs, Inc. All rights reserved. Bloomberg Law Reports ® is a registered trademark and service mark of The Bureau of National Affairs, Inc.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)