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Florida: How Much Tax Do Online Travel Companies Owe?

  • Oct 7, 2014 | Gail Cole

 A Miami hotel.

More than a dozen counties in Florida have taken online travel companies (OTCs) to court over underpaid hotel occupancy taxes.

For years, the industry standard in Florida and many other states was for OTCs to charge tax on the wholesale rates the travel companies pay to hotels for blocks of rooms, not the retail rates paid to OTCs by consumers. OTCs would prefer to keep taxing at the lower rate, while local governments in Florida would like the additional tax revenue the higher rate would generate.

The debate has been brewing since online travel companies first started remitting taxes in Florida. Businesses are taking sides, with the Walt Disney Company lobbying on behalf of OTCs and Marriott International lobbying on behalf of local governments.

To date, lower courts in Florida have taken the side of travel companies but local governments have not conceded loss. The Florida Supreme Court has taken the case, which has been designated as a high profile case, but has yet to render a decision. Should the Court rule against the OTCs, they could be held liable for a significant amount of back taxes.

The case is Alachua County et al. v. Expedia Inc. et al., case number SC13-838, in the Supreme Court of Florida.

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photo credit: Boston Public Library via photopin cc

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.