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Friday, September 13, 2013

Ind. Courts - Tax Court to hold full hour of oral argument Tuesday on whether online travel sites are subject to sales tax and on what basis

Here are some quotes from the lengthy lead story in the September 16th issue of Indiana Legislative Insight ($$$, used with permission):

The Indiana Tax Court has scheduled a full hour of oral argument Tuesday afternoon on a request from on-line travel broker Orbitz, LLC to prohibit public access to information in the court record in Orbitz, LLC v. Indiana Dep’t of State Revenue, No. 49T10-0903-TA-10.

This hearing — unusual for its length and for reviewing a procedural motion — comes as national action heats up on the underlying substantive issues involved, and as the Indiana judicial action approaches in a case being watched across the nation. * * *

As we’ve told you at various stages in the past four years, there has been a long-running dispute between the Indiana Department of Revenue and hotel booking sites including Orbitz, Expedia, Priceline, and Travelocity, over whether the on-line travel sites are subject to sales tax based upon the price paid to the companies by their customers or on the amounts that the on-line middlemen are actually charged by hotels. The Department of Revenue ruled in an administrative appeal during the first Daniels Administration term that the on-line brokers must remit taxes based upon the higher rates that consumers ultimately pay when they book their reservations through the travel broker.

Similar litigation has been ongoing in several states (at least 77 cases have been filed nationwide), and most — but by no means all — of the similar cases have been resolved in favor of the on-line booking companies (the Florida Supreme Court announced Tuesday that it accepted jurisdiction in Alachua County v. Expedia, Inc., No. SC13-838, yet another case on point).

The Orbitz case is the lead case in the six-case Indiana litigation litany, and the other five cases were stayed in 2011 pending the outcome of this action. The Orbitz matter alone involved a dispute over some $200,000 in tax revenue as of four years ago so in total, a seven-figure stake is likely at stake retroactively and going forward.

You may watch the oral argument here at 1:30 PM on Tuesday, Sept. 17th. Here is the case docket.

Posted by Marcia Oddi on September 13, 2013 01:31 PM
Posted to Upcoming Oral Arguments