Orbitz 2011 Annual Report Download - page 28

28
hotels, and thus, liable for transient occupancy tax on the amount each received as payment for its online travel related services.
The Superior Court also dismissed with prejudice the City's causes of action for preliminary and permanent injunction,
conversion, violation of California Civil Code § 2223, violation of California Civil Code § 2224, imposition of a constructive
trust, breach of fiduciary duty, fraudulent concealment, money had and received, and unjust enrichment. On January 24, 2011,
the City of Anaheim filed its notice of appeal from the December 12, 2010 Order of the Superior Court for Los Angeles County
granting peremptory writ of mandate.
City of San Francisco
On March 3, 2010, the City of San Francisco issued a final assessment of approximately $3.2 million for the period of
January 1, 2000 to September 30, 2008, including penalties and interest through March 31, 2008, against Orbitz, LLC, Trip
Network, Inc., and Internetwork Publishing Corp. On March 31, 2010, Orbitz, LLC, Trip Network, Inc. and Internetwork
Publishing Corp. paid the final assessment pursuant to the City's “pay to play” requirement. On April 2, 2010, Orbitz, LLC,
Trip Network, Inc. and Internetwork Publishing Corp. filed a refund request with the City. On May 14, 2010, Orbitz, LLC, Trip
Network, Inc. and Internetwork Publishing Corp. filed a Complaint for Tax Refund and Declaratory Relief against the City and
County of San Francisco seeking a tax refund and declaratory relief.
City of San Diego
On February 9, 2006, the City of San Diego, California filed an action in Court for the County of San Diego, California
against a number of current and former Internet travel companies, including Orbitz, Inc., Orbitz, LLC, Trip Network, Inc. and
Internetwork Publishing Corp. The complaint alleges, among other things, that the defendants violated the jurisdiction's hotel
occupancy tax ordinance with respect to the charges and remittance of amounts to cover taxes under the ordinance. On July 26,
2007, the court stayed the case pending plaintiff's exhaustion of administrative remedies. On March 19, 2009, the City issued
an “Amended Audit Deficiency Invoice” of approximately $1.9 million for taxes, interest and penalties for transient occupancy
taxes. On May 28, 2010, a hearing officer appointed by the City approved assessments of approximately $1.4 million, against
the Company. On September 6, 2011, the Superior Court for the State of California for Los Angeles County issued a
peremptory writ of mandate remanding the proceedings to the City of San Diego's hearing officer directing him to withdraw his
decision ruling that the online travel companies are not “operators” of hotels, and thus, not liable for transient occupancy tax on
the amount each received as payment for its online travel related services.
Los Angeles, CA
On December 30, 2004, the City of Los Angeles, California filed an action in the Superior Court, Los Angeles County
against a number of Internet travel companies, including Orbitz, Inc., Orbitz, LLC, Trip Network, Inc. and Internetwork
Publishing Corp. The complaint alleges, among other things, that defendants violated the jurisdiction's hotel occupancy tax
ordinance with respect to the charges and remittance of amounts to cover taxes under the ordinance. On July 27, 2007, the
court stayed the case pending the City's exhaustion of administrative remedies. On September 9, 2009, the City issued
estimated assessments against Orbitz, LLC and Trip Network, Inc. On August 31, 2011, the City issued an estimated
assessment of approximately $0.9 million against Internetwork Publishing Corp. (d/b/a Lodging.com). On September 21, 2011,
the City's board of review confirmed assessments of approximately $1.8 million against Orbitz, LLC and $0.3 million against
Trip Network, Inc. On November 19, 2011, the online travel companies filed a verified petition for writ of mandate seeking to
vacate the board of review's final determination.
Orbitz, LLC v. Broward County, Florida, No. 2009 CA 000126 (Circuit Court of the Second Judicial Circuit, Leon
County, Florida). On May 20, 2008, Broward County, Florida issued an estimated assessment of approximately $0.4 million
against Orbitz, LLC and $83,000 against Internetwork Publishing Corp. On November 13, 2008, the County finalized the
assessments. On January 12, 2009, Orbitz, LLC and Internetwork Publishing Corp. filed a complaint in the Circuit Court,
Second Judicial Circuit, Leon County, Florida, against Broward County and the Florida Department of Revenue asserting that
they are not subject to the tourist development tax. On February 2, 2009, the County filed its Answer and Counterclaim. On
March 31, 2009, the County issued additional assessments of $51,000 against Orbitz, LLC and $29,000 against Internetwork
Publishing Corp. On February 28, 2011, the County issued additional assessments of approximately $0.2 million against
Orbitz, LLC and $37,000 against Internetwork Publishing Corp. On February 24, 2010, the Circuit Court granted in part and
denied in the OTCs' motion to dismiss the County's Counterclaim dismissing Count II (unjust enrichment), Count III
(conversion), and Count IV (permanent injunction).
Orbitz, LLC v. Indiana Department of Revenue, No. 49T10-0903-TA-00010 (Indiana Tax Court). On May 5, 2008, the
Indiana Department of Revenue issued estimated assessments of approximately $0.2 million against Orbitz, LLC. On
November 24, 2008, the Department of Revenue confirmed the estimated assessments as its final administrative assessment.