Back in 2006, the city of San Antonio filed a lawsuit against online hotel room bookers such as Expedia and Travelocity on the grounds that they were largely avoiding their hotel occupancy tax. The city of Houston did the same the next year. Last week, Houston’s suit was dismissed.
Harris County Civil District Judge Brent Gamble this week tossed the case out of court based on arguments from the online services that include that they aren’t hotels and their fees should not be subject to hotel taxes.
[…]
City Attorney Arturo Michel said he will recommend that the city ask for a new trial and appeal the decision if that fails. He said no precise amount of tax loss was calculated, but it was in the millions, possibly more than $10 million for several years.
“This is an issue about how our ordinance reads. It’s the actual cost paid for the room that matters,” said Michel.
Jim Karen, a Dallas-based lawyer for Expedia, Hotels.com and Hotwire, said the Houston case is one of many filed around the country. He said courts have decided the issues in different ways, sometimes based on the different wording in tax ordinances and sometimes based on how the judges viewed the facts.
The case number is 200713227 – 7 if you want to view the documents on the District Clerk webpage. I have not created an account there to view documents, so I have not read the decision. The story also notes that the class action lawsuit that stemmed from the original San Antonio action has been decided in part for the cities, so it’s possible that trying again could be successful. I still think that a legislative solution might be the simpler remedy.