Expedia 2011 Annual Report Download - page 41

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the Second Judicial Circuit in and for Leon County). The companies moved to dismiss Miami-Dade’s
counterclaims. These cases have been consolidated with the cases brought by other online travel companies for
refund of hotel occupancy taxes. Miami-Dade County’s claims were settled as a part of the Monroe class action
settlement. The claims relating to tourist development tax have been dismissed. The claims relating to convention
development tax remain.
South Carolina Litigation. On March 16, 2009, Travelscape, LLC filed a notice of appeal in the South
Carolina Court of Appeals appealing the Administrative Law Court’s order of February 13, 2009 relating to the
South Carolina Department of Revenue’s assessment of sales and accommodations taxes. Travelscape, LLC v.
South Carolina Department of Revenue, 2008-ALJ-17-0076-CC (State of South Carolina Court of Appeals). The
Supreme Court of South Carolina took consideration of this appeal and on January 19, 2011 ruled that taxes are
due on Travelscape’s revenue.
Pennsylvania Board of Finance and Revenue Litigation. On December 3, 2010, Expedia, Hotels.com and
Hotwire filed a petition in the Commonwealth Court of Pennsylvania challenging the Pennsylvania Board of
Finance and Revenue’s finding that they are liable for state and local hotel taxes. Hotels.com, L.P. v.
Commonwealth of Pennsylvania, Case No. 875 F&R 2010 (In the Commonwealth Court of Pennsylvania);
Travelscape, LLC v. Commonwealth of Pennsylvania, Case No. 874 F&R 2010 (In the Commonwealth Court of
Pennsylvania); Hotwire, Inc. v. Commonwealth of Pennsylvania, Case No. 876 F&R 2010 (In the
Commonwealth Court of Pennsylvania). ). The Pennsylvania Board of Finance and Revenue has dropped its
assessments and issued a ruling clarifying that fees charged by online travel companies are not subject to
Pennsylvania hotel occupancy tax. The suits brought by the Expedia companies, therefore, have been dismissed.
Osceola, Florida Litigation. On January 24, 2011, Expedia, Hotels.com and Hotwire, along with other
online travel companies, filed complaints against Osceola County, Florida and the Florida Department of
Revenue challenging the county’s assessment of taxes. Expedia, Inc. v. Osceola, Florida and Florida
Department of Revenue, Case No. 2011 CA 000206 (In the Circuit Court of the Second Judicial Circuit, Leon
County); Hotels.com, L.P. v. Osceola, Florida and Florida Department of Revenue, Case No. 2011 CA 000196
(In the Circuit Court of the Second Judicial Circuit, Leon County); Hotwire, Inc. v. Osceola, Florida and Florida
Department of Revenue, Case No. 2011 CA 000202 (In the Circuit Court of the Second Judicial Circuit, Leon
County). The online travel companies have asserted claims that they are not subject to the county tax ordinance,
Commerce Clause violation, due process, breach of confidentiality, fundamental bias of assessment, and Internet
Tax Freedom Act and Supremacy Clause violation. Defendant online travel companies have moved to dismiss
the County’s counterclaims and to strike certain affirmative defenses.
Expedia Insurance Litigation. On November 29, 2010, Expedia, Hotels.com and Hotwire brought suit in
state court in Washington against a number of their insurers seeking recovery for occupancy tax cases. Expedia,
Inc. et al. v. Steadfast Insurance Company, et al. Case No. 10-2-41017-1 (King County Superior Court). On
August 26, 2011, the defendant insurance companies filed motions for summary judgment. On January 13, 2012,
the court granted in part and denied in part the insurers’ motions for summary judgment.
State of North Carolina Litigation. In February 2011, Travelscape, Hotels.com and Hotwire, along with
other online travel companies, brought suit in state court in North Carolina challenging the state of North
Carolina’s amended sales tax statute that seeks to tax the revenue generated from the services provided by the
online travel companies. Ortbitz, LLC, et al. v. State of North Carolina, Case No. 11CV001857 (In the General
Court of Justice, Superior Court Division). The complaint includes claims for violation of the Internet Tax
Freedom Act, unconstitutional impairment of contracts, violation of the Commerce Clause, violation of state
uniformity clause and federal equal protection, and void for vagueness. Defendants have filed motions to dismiss.
Hawaii Tax Court Litigation. On March 1, 2011, Expedia, Hotels.com, Hotwire and other online travel
companies filed notices of appeal to the Hawaii Tax Appeal Court from notices of assessments dated February 3,
2011. In the Matter of the Appeal of Expedia, Inc., Case No. 11-1-0023; In the Matter of the Appeal of
Hotels.com, LP, Case No. 11-1-0027 and In the Matter of the Appeal of Hotwire, Inc., Case No. 11-1-0026.
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