Weekly Round-Up: Sixth Circuit Decision Marks Another Victory for Online Travel Firms


Online travel companies (OTCs) like Hotels.com L.P., Expedia Inc. and Priceline.com Inc. do not owe occupancy taxes on the mark-up they charge customers who book hotel rooms on their internet sites, a three-judge panel of the U.S. Court of Appeals for the Sixth Circuit held.

The decision by the Sixth Circuit, Columbus, Ohio v. Hotels.com LP, Nos. 10-4531/4545 (6th Cir. filed Sept. 10, 2012), which ruled the same way in a similar case brought by Louisville, Ky., and surrounding Jefferson County, Ky., marks another victory for the OTCs in their battle against dozens of cities, counties and states around the country that claim the OTCs have systematically and deliberately underpaid occupancy taxes for the last decade.

It also underscores, yet again, the importance of the specific language contained in local tax ordinances that were often written long before the advent of internet-based commerce.

The Sixth Circuit panel, as it did in the Louisville case, found that the occupancy ordinances of the six cities, four townships, and a county authority that formed the plaintiffs in the instant case place the responsibility for collecting and remitting the tax on some variation of “operators” of hotels.

For a complete look at the court’s decision, check out Bloomberg BNA Correspondent Tom Gilroy’s analysis, found in this week’s issue of theWeekly State Tax Report.

In other developments…

Register now for the Bloomberg BNA Tax Policy & Practice Summit , which will include sessions on cloud computing and other sales tax issues and a post-election roundup of state and local business tax policies.

Brown tax increase losing support of California voters, poll finds , Michael B. Marois of Bloomberg News reports. 

Property taxes on business inventory ,by Nick Kasprak of the Tax Foundation.

Oregon DOR out of luck on SOL : Sutherland SALT’s analysis.

D.C. issues final combined reporting regulations , PricewaterhouseCoopers reports.

Compiled by Priya D. Nair
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