Florida court hands victory to Expedia, other online travel companies over lodging tax

Expedia and other online travel companies won a crucial decision this week when the The First District Court of Appeals in Florida ruled that the travel companies do not have to impose hotel occupancy taxes.

“Our members maintain the same ambition now as we did prior to litigation: to successfully encourage travelers and tourists worldwide to discover and experience the state of Florida, which will ultimately drive increased tax revenues to county and state treasuries,” said Simon Gros, chairman of Travel Tech, which represents companies such as Expedia, Travelocity and Orbitz.

The Gainesville Sun reports that the split 2-1 decision likely will head to the Florida Supreme Court. Attorneys for the online travel companies successfully argued that Expedia and others do not directly rent hotel rooms, therefore they are not subject to the tax.

“We sincerely hope that these claims will finally be put to rest, so that we can get back into the business of putting heads in beds, and showcasing Florida as a tourist destination on a global stage,” said Gros in a statement.

Last month, Expedia’s net income fell to $6.9 million, in part due to $110 million set aside related to issues tied to lodging taxes in Hawaii.

“We reserved this amount due to our expectation that we will be required by the state of Hawaii to pay this amount in order to pursue a challenge on appeal of the adverse decision by the Tax Court that general excise tax is due on the total amount paid by consumers for a hotel room reservation in Hawaii,” the company wrote in a press release. “To the extent we prevail, the state will be required to repay us with interest. In addition, the court is considering additional assessments and penalties which we  estimate could be up to $60 million. Payment of these amounts is not an admission that we believe we are subject to the  taxes in question.”