Category Archives: Tourist Development Tax

Florida Supreme Court Rules for Expedia: Only the Amount Paid by Online Travel Company to Secure Hotel Reservation is Subject to Bed Tax

In a closely watched case, the Florida Supreme Court recently ruled that the tourist development tax (aka the bed tax) is not applicable to the total monetary amount charged by online travel companies, like Expedia, to secure hotel reservations. Counties may only tax the actual amount paid by the online travel company to secure the hotel reservation. Several counties filed a declaratory judgment action against Expedia and other online travel companies. The counties were seeking to tax online travel companies for the total amount a customer pays for making a hotel reservation. Customers make reservations for a hotel on the online travel company’s website, and the price paid by the customer includes a “mark-up” that is greater than the amount paid by the online travel company to the hotel. The counties sought to tax the total amount paid by the customer to the online travel company for securing the hotel reservation. In analyzing the legislative history of the tax, the Court ruled that the tax is be imposed only on the lower amount that hotels receive from the online travel company for the rent of their rooms. A link to the case is here:
http://www.floridasupremecourt.org/decisions/2015/sc13-838.pdf.

Michael J. Wilson
mwilson@williamsparker.com
941-536-2043