Orbitz 2014 Annual Report Download - page 25

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December 31, 2013, the Florida Supreme Court issued an order staying the Transient Rental Tax statute case pending the
outcome of Tourist Development Tax case.
Leon County, Florida (Tourist Development Tax): On February 28, 2013, the First District Court of Appeal affirmed the
trial court’s summary judgment ruling in favor of the OTCs. On March 15, 2013, the County filed a motion for rehearing en
banc, or in the alternative Requesting Certification to the Florida Supreme Court of a Question of Great Public Importance. On
April 16, 2013, the Florida Court of Appeals, First District denied plaintiffs’ motion for rehearing en banc, but granted
plaintiffs’ request for certification to the Florida Supreme Court. On May 13, 2013, the plaintiffs filed their Petition for Review
with the Florida Supreme Court seeking review of the First District Court of Appeal’s opinion affirming the trial court’s
summary judgment in favor of the OTCs. On September 10, 2013, the Florida Supreme Court granted plaintiffs’ Petition for
Review. On April 30, 2014, the Florida Supreme Court heard oral argument.
City of San Francisco, California: 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, against various Orbitz entities. On March
31, 2010, Orbitz paid the final assessment pursuant to the City’s “pay to play” requirement. On April 2, 2010, we filed a refund
request with the City. On May 14, 2010, the OTCs filed a Complaint for Tax Refund and Declaratory Relief against the City
and County of San Francisco seeking a tax refund and declaratory relief. On December 18, 2012, the City of San Francisco
issued supplemental final assessments of approximately $1.4 million against Orbitz LLC, Trip Network, Inc. and Internetwork
Publishing Corp. On January 2, 2013, these entities paid this assessment pursuant to the City’s “pay to play” requirement. On
February 6, 2013, the Superior Court granted the OTCs motion for summary judgment. On October 10, 2013, the Superior
Court entered final judgment in favor of the OTCs, ordering San Francisco to issue a refund of $4.0 million to the Orbitz
Entities on the first assessment, representing a refund of the principle amount ($3.2 million) and $0.8 million in interest. On
November 5, 2013, the Orbitz entities filed a Complaint in the Superior Court for a tax refund and declaratory relief relating to
the supplemental final assessment of $1.4 million. On December 9, 2013, the City and County of San Francisco filed a Notice
of Appeal. On August 6, 2014, the Court granted the City and County of San Francisco’s motion to stay the appeal pending the
California Supreme Court’s resolution of the City of San Diego case.
Montana Department of Revenue: On March 6, 2014, the Montana First Judicial District granted the OTCs’ motions for
summary judgment on both accommodations and car rental reservations. On May 5, 2014, the Montana Department of
Revenue filed a notice of appeal with the Montana Supreme Court. The parties have fully briefed the appeal and oral argument
has been set for April 10, 2015.
Hawaii Department of Taxation: On December 30, 2010, the State of Hawaii Department of Taxation issued a series of
“proposed” assessments for the transient accommodations tax and general excise tax totaling approximately $10.2 million
against various Orbitz entities. On January 31, 2011, the Department of Revenue issued its Final Notices of Assessments for
those same amounts. On March 1, 2011, the OTCs filed their Notice of Appeal to the Tax Appeal Court. On May 8, 2012, the
Hawaii Department of Taxation issued additional proposed assessments for the period of January 1, 2000 to December 31, 2011
totaling approximately $48.6 million against the Orbitz entities bringing the total amount of assessments to approximately
$58.8 million. On October 22, 2012, the Tax Appeal Court orally denied the Department of Taxation’s motion for partial
summary judgment and granted the OTCs motion for partial summary judgment on the transient accommodations tax. On
January 11, 2013, the Tax Court of Appeal orally granted in part the Department of Taxation’s motion for summary judgment
and denied the OTCs motion as it relates to application of the general excise tax. On February 8, 2013, the OTCs filed a motion
for reconsideration. On March 27, 2013, the OTCs filed a mandamus petition and motion to stay the action in the Tax Court
pending resolution of the mandamus petition. On May 20, 2013, the Hawaii Department of Taxation issued estimated
assessments for the 2012 tax year for merchant model hotel reservations against various Orbitz entities collectively amounting
to $16.9 million. On August 15, 2013, the Hawaii Tax Appeal Court entered final judgment disposing of all issues and claims of
all parties. On September 11, 2013, the OTCs filed their notice of appeal seeking review of the Hawaii Tax Appeal Court
finding that the OTCs are subject to Hawaii’s general excise tax (“GET”). The Department filed a notice of appeal seeking
review of the Hawaii Tax Appeal Court finding that the OTCs are not subject to Hawaii’s transient accommodations tax. On
December 9, 2013, the Hawaii Department of Taxation issued Notices of Final Assessments collectively totaling
$10,254,669.60 on Orbitz, LLC, Trip Network, Inc. and Internetwork Publishing Corp. for General Excise Tax, penalties and
interest for rental car transactions during the period of January 1, 2002, through December 31, 2012. On December 16, 2013,
the Tax Appeal Court granted the OTCs’ motion to stay their consolidated tax appeals for 2012 GET and TAT Tax Assessments.
On December 24, 2013, the Hawaii Supreme Court granted the parties’ application to transfer the matter to the Hawaii Supreme
Court. On July 18, 2014, the Hawaii Department of Taxation issued final assessments for merchant hotel and merchant car
reservations for the 2013 tax year against Orbitz LLC, Trip Network Inc., and Internetwork Publishing Corporation,
collectively in the amount of $14.6 million. The Hawaii Supreme Court heard oral argument on both appeals on October 2,
2014. On December 22, 2014, the Hawaii Tax Court of Appeal granted the OTCs’ motion to stay the 2013 assessments.