Tax News

CCH (cch.taxgroup.com) reports:

  The Georgia Supreme Court has ruled in favor of the city of Columbus, Georgia, in the city's action against online travel company Expedia.com to collect unpaid hotel occupancy taxes. Previously, a superior court had issued an order compelling Expedia to collect the city's hotel occupancy taxes based on the prices its online consumers pay on Expedia.com rather than the wholesale prices Expedia contracts for with hotels. (TAXDAY, 2009/09/25, S.8) The action filed by Columbus is similar to an action filed by the city of Atlanta against online travel companies seeking payment of hotel occupancy taxes. That case currently awaits trial following remand by the supreme court for adjudication of the Atlanta's claim on the merits.(TAXDAY, 2009/06/04, S.12; TAXDAY, 2009/03/24, S.7)

  As Expedia contracted with the city of Columbus hotels to collect hotel occupancy taxes, it was obligated to remit the taxes to the appropriate authority. For purposes of the tax statute, it does not matter that Expedia is not a hotel or motel. Further, the tax should be applied to the rate charged by Expedia,, not to the wholesale rate negotiated between Expedia and the hotels because the city ordinance imposes the tax on the rate charged to the public. The undisclosed facilitation fee is also taxable because there is no means to identify the amount charged as a fee from the total charge for the room. According to the statute, the entire amount charged for a room is taxable.

Expedia, Inc. v. City of Columbus , Supreme Court of Georgia, No. S09A0567, June 15, 2009, ¶200-669

  Other References:

  Explanations at ¶60-480