By Ray King
The Arkansas Supreme Court on Thursday rejected for the third time an appeal filed by a group of online travel companies who were accused of not paying the full amount of taxes they owed on hotel rooms booked by the companies.
Writing for the court, Associate Justice Robin Wynne dismissed the appeal, setting the stage for a trial on the merits of the claims before Circuit Judge Rob Wyatt Jr.
The lawsuit began in 2009 when the Pine Bluff Advertising and Promotion Commission (A&P), and Jefferson County filed legal action against the group, which was dubbed “hotels.com: and included Expedia, Inc., Priceline.com, Orbitz, LLC, Travelocity.com and others. The City of North Little Rock was allowed to join the lawsuit later. It alleged that the booking agencies got hotel rooms at a discount rate and then sold them to customers at a higher rate, but paid taxes only at the lower rate.
The City of Pine Bluff imposes a tax on hotel rooms that are rented with that money being used by the A&P Commission for promotion of the city.
Judge Wyatt granted class-action certification of the lawsuit which was approved by the Supreme Court.
The companies then filed a motion for summary judgment, as did the A&P Commission, Jefferson County and North Little Rock. Wyatt denied the motion by the companies and approved the one from the A&P Commission, ruling that the full gross receipts the companies received from customers, including service fees are subject to the applicable taxes. Wyatt also gave A&P and the others involved 30 days to ask for additional relief related to unpaid taxes owed, supplemental relief or otherwise including but not limited to amending the initial complaint.
That ruling was appealed and again rejected by the Supreme Court.
The State of Arkansas was allowed to join the lawsuit but another 159 taxing locations also filed motions to be included but Wyatt denied those motions as “impractical.”
A third appeal was filed in November 2020 which became the subject of the high court’s ruling Thursday.
