Online travel fight checks in at appeals court

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A state appeals court Tuesday plunged into a long-running battle between counties and online-travel companies about whether the industry owes disputed amounts of hotel bed taxes.

Roberto Martinez, an attorney for a group of counties fighting companies such as Expedia and Orbitz, asked the 1st District Court of Appeal to overturn a lower-court ruling last year that sided with the industry.

Online-travel companies, which serve as a sort of middleman between travelers and hotels, charge customers for room rentals and fees related to providing the service. The lawsuit — and others like it in Florida and elsewhere in the country — centers on whether county tourist-development taxes should apply to the total price paid by consumers or only to the portions that go for room rentals.

Martinez told a three-judge panel that online-travel companies are in the business of renting hotel rooms and, as a result, should be subject to taxes on the full amounts that consumers pay. He rejected the idea that state law was “ambiguous” about the issue, which was a basis for the lower-court ruling.

But Darrel Hieber, an attorney for online-travel companies, said the industry plays the role of an intermediary, helping consumers make bookings. He said the companies don’t rent rooms.

“We help them (consumers) make the reservations and prepay them,” Hieber said.

Leon County Circuit Judge James Shelfer last April ruled in favor of the online-travel industry in the case, which dates to 2009 and has included 17 counties. Shelfer said state lawmakers had not made clear that the companies are required to pay the disputed taxes.

Appeals-court Judge Philip Padovano appeared skeptical Tuesday of the industry’s arguments and the idea that state law was ambiguous. Fellow Judge Brad Thomas, meanwhile, pointed out that lawmakers have considered bills in recent years aimed at making clear whether the disputed amounts should be paid.

“It does seem that the Legislature’s grappling with trying to clarify this statute one way or the other,” said Thomas, who served as a legislative staff director and as an aide to former Gov. Jeb Bush.

It remains unclear when the appeals court will issue an opinion in the case. The counties that have been involved are Alachua, Charlotte, Escambia, Flagler, Hillsborough, Lee, Leon, Manatee, Nassau, Okaloosa, Pasco, Pinellas, Polk, St. Johns, Seminole, Wakulla and Walton.

Another Leon County circuit judge, Terry Lewis, also sided with online-travel companies last year in a case spearheaded by Broward County. A notice of appeal was filed Feb. 5 in that case, according to a docket on the 1st District Court of Appeal website.

Via Jim Saunders of the News Service of Florida.

Peter Schorsch is the President of Extensive Enterprises and is the publisher of some of Florida’s most influential new media websites, including SaintPetersBlog.com, FloridaPolitics.com, ContextFlorida.com, and Sunburn, the morning read of what’s hot in Florida politics. SaintPetersBlog has for three years running been ranked by the Washington Post as the best state-based blog in Florida. In addition to his publishing efforts, Peter is a political consultant to several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella.