Casenote: Online Travel Companies Find Issues with Hotels Extremely Taxing: Georgia's Hotel-Motel Occupancy Excise Tax and Expedia, Inc. v. City of Columbus Skip over navigation
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Copyright (c) 2010 Walter F. George School of Law, Mercer University
Mercer Law Review

Casenote: Online Travel Companies Find Issues with Hotels Extremely Taxing: Georgia's Hotel-Motel Occupancy Excise Tax and Expedia, Inc. v. City of Columbus

Summer, 2010

Mercer Law Review

61 Mercer L. Rev. 1263

Author

T.J. Evans

Excerpt



In Expedia, Inc. v. City of Columbus, 1 the Georgia Supreme Court held that under a plain reading of the "Hotel-Motel Occupancy Excise Tax" ordinance of Columbus, Georgia, 2 and the Official Code of Georgia Annotated (O.C.G.A.) enabling statute, 3 the applicable tax rate must be applied to the amount an online travel company (OTC) charges a purchaser for the right to occupy a hotel room, rather than the discounted amount for which the OTC contracts with hotels to pay for a room. 4 The supreme court's decision "marks the first time any state's highest court has ruled on the substantive issues at the center of dozens of legal and administrative battles between the OTCs and municipalities around the country." 5

I. Factual Background
  Expedia, Inc., an OTC, reserves hotel rooms and allows customers accessing its services over the Internet the opportunity to make reservations with hotels. Expedia contracts with hotels at a "discount" or "wholesale rate" for a specific number of rooms. The company then advertises and offers the hotel rooms for an amount greater than the wholesale rate, known as the "room rate," to the public on its website. When a customer purchases a hotel room through Expedia, the amount of money designated for "taxes and service fees" is disclosed to the customer; however, the specific portion for taxes and the portion for service fees are not disclosed. When Expedia contracts with hotels, the contract provides that Expedia "shall collect all ...
 
 
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