Okaloosa County BOCC — June 25, 2015 — III. h. Editorial re Lawsuit against Online Travel

From: Josh Allen To: Ed Schroeder; Charlotte Dunworth; Nancy Hussong Cc: John Hofstad Subject: Lawsuit against Online Travel Date: Friday, June 12, 2015 9:02:16 AM Attachments: Superior Court Opinion us vs Expedia.pdf FYI… · Editorial: Florida Supreme Court sides with online companies over tax fairness: The Florida Supreme Court illogically handed a big win Thursday to out-of-state businesses and a serious setback to Tampa Bay counties seeking tax fairness. The divided court ruled that Internet travel firms cannot be required to pay their fair share of county tourist-development taxes, which will keep costing the counties millions in lost revenue. Now it's up to the Florida Legislature to clarify state law and level the playing field so that these online travel sites pay the appropriate tax, an issue lawmakers have avoided for years. The issue in this case is clear cut. Roughly 20 counties, including Pinellas, Hillsborough and Pasco, wanted the court to require online travel sites such as Expedia, Orbitz and Travelocity to remit the same amount of taxes as a Florida hotel does on same-priced rooms. The travel companies argued that state law requires them only to pay taxes on the wholesale price they paid the hotelier for a room, not on the price the customer pays them. That is a tax dodge that defies common sense, but the Supreme Court bought it. Five justices sided with the online travel companies and concluded they could continue to remit resort taxes only on the discount rates they receive from hotels, regardless of what online companies charge their customers for the room. Yet justices were divided on why that is the right call. Justice James Perry wrote in the majority opinion that state law is clear and does not say the tax should be applied to other charges and service fees. He also pointedly noted that the Legislature has chosen not to rewrite the law. Justice Barbara Pariente agreed with the conclusion but wrote in a concurring opinion that the law is not clear and attached no significance to the Legislature's inaction. But, she wrote, "It is not this court's place to impose its view of the better policy, especially when it comes to a taxation scheme'' and that the benefit of the doubt goes to the taxpayer. Justice R. Fred Lewis, who was joined by Justice Ricky Polston, wrote in a clearer dissent that the law is straightforward and that the counties are entitled to collect resort taxes on the entire bill paid by the customer to the online travel company. After all, Lewis wrote, the customer does not know how the online company divided the room cost, fees or other charges. And by considering a portion of the payment a service charge, the online company is avoiding tax liability. With no help from the courts, the last hope for the counties rests with an unfriendly Legislature. The counties have been lobbying lawmakers to update the law to reflect the Internet age for more than a half-dozen years. Pinellas County Commissioner Janet Long, a Democrat, unsuccessfully pushed the issue several years ago as a House member and was blocked by the Republican leadership that still has no interest in the issue. All of those lawmakers in Tallahassee talking about creating jobs and encouraging Florida businesses should be more interested in tax fairness than in protecting an unfair advantage for out- of-state online travel companies. Editorial: Florida Supreme Court sides with online companies over tax fairness 06/11/15 [Last modified: Thursday, June 11, 2015 6:30pm] Joshua Allen Joshua Allen, CFCA, MBTO Director of Field Services Okaloosa County Tax Colle