Expedia 2013 Annual Report Download - page 43

settlement. The claims relating to tourist development tax have been dismissed. The claims relating to convention
development tax remain. On September 25, 2012, the court issued an order staying all further proceedings in the
case pending a final appellate determination in the Leon County litigation.
State of Oregon Litigation. On September 27, 2013, Expedia, Hotels.com, Hotwire and other online travel
companies filed a lawsuit in the Oregon Tax Court against the Oregon Department of Revenue. Expedia, Inc. et
al. v. Oregon Department of Revenue, Case No. TC 5196 (Oregon Tax Court, September 27, 2013). The
complaint asserts claims for declaratory judgment challenging the constitutionality of HB 2656, signed into law
on July 2, 2013, which amended the state transient lodging tax statute, and the applicability of that law to
amounts charged by the online travel companies for their services.
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. On August 19, 2013 the court
administratively closed the case pending appellate review in the case brought by Leon County and other counties
in the state of Florida.
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. Orbitz, 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. On May 28, 2013, the court denied in
part and granted in part the defendants State of North Carolina and Durham County’s motions to dismiss the
online travel companies claims; specifically, the court denied the motion to dismiss as to the online travel
company plaintiffs’ state law claims but granted the motion as to plaintiffs’ federal claims. On June 21, 2013, the
court denied the online travel companies’ motion to reconsider but granted their motion to certify for immediate
appeal to the North Carolina Court of Appeals. On November 22, 2013, the parties entered a settlement. On
December 3, 2013, the online travel companies filed a notice of dismissal of the lawsuit.
Hawaii Tax Court Litigation (Transient Accommodations Tax). 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 for Transient Accommodation Taxes and General Excise Taxes claimed
for the time period 2000 to 2011 for non-commissioned hotel room reservations. (See discussion of “Other Tax
Litigation” below for information relating to General Excise Tax). 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. The appeals filed by other online travel companies of their
assessments were consolidated in one proceeding along with the appeals filed by the Expedia companies. On
October 22, 2012, the court held that Transient Accommodation Taxes are not due on the online travel
companies’ services. The court denied the Department of Taxation’s motion to reconsider on January 11, 2013.
The Department of Taxation dismissed without prejudice its common law claims for the recovery of taxes. On
August 19, 2013, the Department filed a notice of appeal challenging the tax court decision that online travel
companies do not owe transient accommodation taxes. On December 24, 2013, the Hawaii Supreme Court
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