Alabama Supreme Court and Leon County, Florida Circuit Court Unanimously Side with Online Travel Companies in Lodging Tax Disputes

2012-04-23
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  • Hotel News Resource The Alabama Supreme Court and the Second Judicial Circuit Court of Florida in Leon County ruled decisively in favor of online travel companies, affirming once again that online travel companies (OTCs) are not subject to the application of lodgings taxes to their services.


    Alabama and Florida municipalities that brought suit claimed that OTCs should be liable to pay lodgings tax based on amounts received for providing their reservation facilitation services. The decisions follow a clear national trend, where state and federal courts have repeatedly rebuffed efforts by state and local governments to attempt to impose hotel occupancy taxes on OTCs for their services.[1]

    In the Alabama decision, a central legal question of room occupancy was based on whether or not the OTCs were engaged in the business of "renting or furnishing" hotel rooms.  In the Florida decision, it was based whether or not the Florida transient tax applied solely to the renting, leasing or letting of rooms by a hotel, and not to the OTCs' facilitation services.

    "Whether a locality's statutory language says lodging tax is applied to those 'renting or furnishing' or 'renting, leasing or letting' of a hotel room, the same overriding principle applies: OTCs are not in the business of operating hotel rooms. They provide a user-friendly technological facilitation service to save people time and money as they make travel reservations, while promoting destinations like Alabama and Florida to the world—at no extra cost to the taxpayer," said Joseph Rubin, President of the Interactive Travel Services Association (ITSA).

    Rubin continued, "It appears the various parties who continue to bring these suits against our industry are running out of terms to claim we operate hotel rooms. We hope other municipalities will recognize this recurring trend, and read both thorough, well-reasoned opinions. As demonstrated by these decisions, there is little basis for states and localities to continue to pursue dead-end litigation that wastes taxpayer resources."

    About the Interactive Travel Services Association (ITSA)

    The Interactive Travel Services Association is the association for online travel companies and global distribution systems.  ITSA is the voice of the industry on public policy matters, and serves to educate policy makers, opinion leaders and the traveling public about the industry and matters of importance that will affect travel and tourism in general.

    ITSA's members include:  Amadeus, Orbitz Worldwide, Expedia, Priceline, Sabre Holdings, Travelport and Vegas.com.

    [1] In cases where trial courts have ruled on the merits, the courts have ordered judgment for the OTCs in 15 lower courts, and judgments have been affirmed by 6 appellate courts – two federal circuits, and four state appellate courts. The fifteen (15) lower court decisions were in: City of Goodlettsville, TN; Orange, TX; Houston, TX; Findlay, OH; Columbus, OH; Pitt County, NC; Louisville, KY; Bowling Green, KY; Anaheim, CA; San Diego, CA; Philadelphia, PA; St. Louis, MO; Birmingham, AL; Santa Monica, CA; and State of Oklahoma.  The five (5) appellate courts decisions were in Pitt County, Louisville, St. Louis, Bowling Green and Houston. 

    SOURCE Interactive Travel Services Association


    Logos, product and company names mentioned are the property of their respective owners.

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