Court review announcements: Priceline hotel case goes to State Supreme Court, and more
- Martha Bridegam
- Aug 6, 2014
- 5 min read
The California Supreme Court has agreed to review an appellate ruling that Priceline, Expedia, Travelocity and similar "online travel companies" (OTCs) did not have to pay San Diego hotel tax on income they derived using a "merchant model" approach to marketing local hotel rooms. The Second District ruled that if an OTC contracts with a hotel for a block of rooms at a fixed wholesale rate, and then retails them to guests at higher prices, then city hotel tax is due only on the wholesale rate, not the difference the OTC receives. The case is In Re Transient Occupancy Tax Cases, also referred to as City of San Diego v. Priceline. It addresses a coordinated group of cases involving several online hotel room brokers. The Second District decision, as amended on rehearing March 27, is at http://www.courts.ca.gov/opinions/documents/B243800A.PDF. The ruling looks back strongly to two prior cases in Santa Monica and Anaheim, as shown in the Second District's online docket at http://bit.ly/UPLUTn. The Supreme Court online docket is at http://bit.ly/1soYBAy. For further details see http://www.cp-dr.com/articles/node-3464. The League of California Cities posted a comment welcoming the review decision, which it had supported in an amicus letter, at http://bit.ly/1o88aV9.