Court sides with online firms in Fla. tax dispute

Published On: Feb 28 2013 12:11:42 PM EST
TALLAHASSEE, Fla. -

A divided three-judge panel is siding with online travel companies in a dispute over how much tax they must pay on hotel rooms they book in Florida.

The 1st District Court of Appeal panel voted 2-1 on Thursday in Tallahassee to affirm a trial judge's decision in a lawsuit filed by 17 Florida counties.

Tallahassee-based Circuit Judge James Shelfer ruled that online companies such as Expedia and Travelocity must pay tourist development tax only on the amount of money they pay to hotels.

The counties had argued the firms also should be taxed on the markup they charge their customers.

The district court majority agreed with Shelfer that state law is unclear on that issue and, therefore, it must be resolved in favor of the taxpayer rather than the government.