Court Upholds Hotel Broker Lawsuit Ruling

by Gabe Bullard on December 22, 2009

A federal appeals court has ruled against the Louisville and Lexington governments in a case over taxes for hotel rooms booked online.

Louisville Metro Government first filed suit three years ago against hundreds of websites, including Travelocity.com. The sites book rooms from various hotels and then rent the rooms individually at a profit. Officials hoped to collect tax on the price the websites charge customers, rather than the cost they pay the hotel.

A federal appeals court upheld a previous decision to dismiss the suit. Jefferson County Attorney Mike O’Connell says the court only applies hotel tax laws to brick-and-mortar business.

“The tax is, in effect, against those entities such as hotels, motels, lodges, etc and like or similar accommodation businesses,” he says.

O’Connell says the city will review the decision before deciding whether to file another appeal.

“We’re going to review the opinion of the 6th Circuit very carefully and decide whether or not we would like to ask that court to reconsider or what, as one of the next steps we’re going to take,” he says.

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