Alabama Cities Win First Round on Lodging Tax Case Against Orbitz, Travelocity, Priceline, et. al.

Orbitz, Travelocity, Priceline, and other similar online travel companies have failed in their attempt to block an Alabama court from ruling on whether their retail room rate to transients is subject to hotel occupancy taxes.  The online travel companies purchase rooms from hotels at a discounted wholesale rate and then mark them up before selling them to consumers at a higher rate without paying the applicable taxes on the higher consumer charge.  Earlier this month, the online travel companies argued that an Alabama judge could not rule on the issue.  Today, the Alabama court issued an order denying the online travel companies’ motion and stating that the Alabama municipalities have stated a valid justiciable controversy that must be heard under Alabama law.

Frohsin & Barger represents the City of Birmingham and eight other major Alabama taxing authorities in the matter.