Amazon.com is not the only local online company facing legal challenges over sales taxes.
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by Greg Lamm on Monday, November 7, 2011, 1:04pm PST
Amazon.com is not the only local online company facing legal challenges over sales taxes.
The Bellevue-based online travel company is the subject of 44 lawsuits involving the payment of hotel occupancy taxes.
From Florida to California and from Michigan to Texas, Expedia has been hit with legal cases involving local hotel occupancy taxes, those tourism charges of 10 percent or more tacked on hotel bills. Expedia said it plans to “defend these lawsuits vigorously,” saying that the hotel owners are the ones who should be paying the taxes, not the booking agent.
Some cases have gone in Expedia’s favor, while others have not. Expedia has reached settlements in several cases including ones in Florida and Michigan.
Expedia said it has set aside $27 million to cover possible settlements in the cases.
Like Amazon, which has faced issues over collecting local sales taxes across the U.S., Expedia has seen an increase in legal challenges as local cash-strapped jurisdictions have gone to court looking to boost revenue from taxes.
Here are some of the legal cases, according to a regulatory filing Monday by Expedia:
San Diego, California Litigation. On September 6, 2011, the court handling the California consolidated cases overturned the city of San Diego’s administrative decision that was in the city’s favor and held that the online travel companies are not liable for hotel occupancy taxes.
Columbus, Georgia Litigation. The judge who has presided over the case since its inception resigned amid a Judicial Qualifications Commission investigation and the case has been assigned to a new judge. Expedia’s motion for removal of the case to federal court was denied and the case shall now proceed in front of a new judge.
City of Houston, Texas Litigation. On October 25, 2011, the Texas state court of appeals held that online travel companies are not liable to pay hotel occupancy taxes to the city of Houston on their services.
Jacksonville, Florida Litigation. The parties have reached a settlement regarding convention development taxes.
Lyndhurst, New Jersey Litigation. A federal appeals court affirmed the trial court decision dismissing, on standing grounds, a putative class action seeking occupancy taxes brought by the town of Lyndhurst, on behalf of itself and similarly situated municipalities, townships and counties in New Jersey.
County of Genesee, County of Calhoun, County of Ingham and County of Saginaw, Michigan Litigation. The parties have reached a settlement in principle.
Rosemont, Illinois Litigation. On October 14, 2011, the court granted summary judgment in favor of the town of Rosemont and denied the online travel companies’ motion for summary judgment.
Palm Beach, Florida Litigation. The parties have reached a settlement in principle.
Lawrence County, Pennsylvania Litigation. On August 4, 2011, a state appeals court issued an order affirming in part, and reversing in part, a lower court’s dismissal of a putative class action against the online travel companies brought by Lawrence County on behalf of all Pennsylvania counties. The court is allowing the municipalities’ claims for declaratory judgment to proceed.
Hamilton County, Ohio Litigation. The court held that the online travel companies are not liable under the hotel occupancy ordinances of the three jurisdictions in the suit, including the city of Cincinnati, and granted in part and denied in part the online travel companies’ motion to dismiss.
Montgomery County, Maryland Litigation. The court granted in part and denied in part the online travel companies’ motion to dismiss. The court dismissed the county’s claims for unjust enrichment and failure to separately state taxes.
District of Columbia Litigation. On October 12, 2011, the court denied the online travel companies’ motion to dismiss. The District of Columbia has filed a motion for summary judgment.
Volusia County, Florida Litigation. On September 13, 2011, the court denied the online travel companies’ motion to dismiss.
City of Breckenridge, Colorado Litigation. On July 25 2011, Breckenridge, Colorado brought suit against a number of online travel companies, including Hotels.com, Expedia and Hotwire, on behalf of itself and, purportedly, other similarly situated Colorado home rule municipalities. Town of Breckenridge v. Colorado Travel Co., LLC, et al., Case No. 2011 CV420 (In the District Court, Summit County, Colorado). The complaint includes claims for declaratory judgment, violation of ordinance, conversion, civil conspiracy, and unjust enrichment. The online travel companies have filed a motion to dismiss.
Nassau County, New York Litigation. On September 26, 2011, Nassau County re-filed its suit against a number of online travel companies, including Hotels.com, Expedia and Hotwire, in New York state court, on behalf of itself and, purportedly, other similarly situated New York cities, counties and local governmental entities. County of Nassau v. Expedia, Inc., et al. (In the Supreme Court of the State of New York, County of Nassau). The complaint includes claims for violation of hotel tax laws, conversion, unjust enrichment and imposition of constructive trust. Nassau County’s prior federal court action was dismissed for lack of jurisdiction.