Broward, Travelocity Reach Deal in Tax Case

By JIM SAUNDERS
THE NEWS SERVICE OF FLORIDA

THE CAPITAL, TALLAHASSEE, May 14, 2012......In part of a broad legal battle about whether online-travel companies are paying enough hotel taxes, Broward County has finalized a $400,000 settlement with major industry player Travelocity.

Attorneys filed documents last week in Tallahassee to dismiss Travelocity from a lawsuit in which Broward County is trying to collect disputed tourist-development taxes from online companies. Leon County Circuit Judge Terry Lewis on Monday set an Oct. 29 trial date in the case, which continues against other firms such as Expedia and Orbitz.

Broward County commissioners approved the Travelocity settlement on Feb. 28. Neither side budged on whether Travelocity owed the disputed taxes but said in the settlement agreement that the $400,000 payment to the county was designed to end the legal wrangling.

"This settlement is not an admission of liability by Travelocity for past or future taxes, nor is it an admission by the county that anything less than the full amount of the assessment was due and owing,'' said the agreement, which is posted on the Broward County Commission website. "This settlement is based on the parties' common desire to compromise this dispute and is not an indication that either side agrees with the other side's view of the facts or law."

Broward and numerous other Florida counties have fought with the online-travel industry in recent years about the payment of tourist-development taxes, which are collected on hotel stays.

In another case filed by 17 counties, Leon County Circuit Judge James Shelfer ruled last month in favor of the online-travel industry, saying state lawmakers had not made clear that the companies are required to pay the disputed taxes. Attorneys for the counties last week filed formal notice that they would appeal Shelfer's ruling to the 1st District Court of Appeal.

It is difficult to pin down the exact amounts of money involved in the lawsuits because they involve multiple counties, multiple companies and multiple years, but the totals are easily in the millions of dollars

The companies serve as middlemen between hotels and travelers, charging customers for room rentals and fees related to providing the service. The lawsuits involve whether tourist-development taxes should apply to the total cost paid by customers or only to the portion that goes for room rentals.

The industry and its supporters argue that trying to impose the tax on the fees would amount to a services tax, which is not allowed in Florida. But counties say the tax should apply to the total price that travelers pay and that online-travel companies are involved in renting rooms.

During a largely procedural conference Monday in Lewis' office, an industry attorney, Beth Herrington, suggested the possibility of issuing a stay in the Broward County case until after the 1st District Court of Appeal rules in the multi-county lawsuit that Shelfer recently decided.

But Broward County attorney Jon Moyle said the cases involve some different legal theories. Lewis said he is not bound by Shelfer's opinion and continued moving toward a trial.