Alachua County and 16 other Florida counties are appealing a judge’s ruling that online travel companies, like Expedia and Orbitz, should be taxed only on what they pay for hotel rooms rather than the higher price they charge customers.
Currently, the online travel discounters buy rooms at a discounted rate, and then mark them up about 25 percent, says County Attorney Dave Wagner. They pay tourist development tax only on their purchase price. The travel companies contend that their mark-up is a “facilitation fee” and not subject to taxation.
However, Alachua County claims it is owed $435,000 in unpaid taxes and $150,000 in interest and penalties, Wagner says—but in April, Leon County Circuit Judge James Shelfer ruled in favor of the online companies.
With millions in tourist development tax dollars at stake, the counties will challenge the decision in the First District Court of Appeal, according to Bob Nabors, a lawyer for the counties. The case could end up before the Florida Supreme Court.