Orbitz 2013 Annual Report Download - page 27

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Orbitz, LLC v. Osceola, Florida (Circuit Court of the Second Judicial Circuit, Leon County, Florida): On August 27,
2010, Osceola County, Florida issued estimated assessments against various Orbitz entities. On October 27, 2010, the County
denied the Company's appeal and finalized assessments of approximately $1.0 million against Orbitz, Inc. and Orbitz, LLC and
approximately $0.2 million against Trip Network, Inc. and Internetwork Publishing Corp. On January 24, 2011, the OTCs filed
a complaint in the Circuit Court, Second Judicial Circuit, Leon County, Florida against Osceola County and the Florida
Department of Revenue asserting that they are not subject to the tourist development tax.
Orbitz, LLC v. Hawaii Department of Taxation (Hawaii Tax Appeal Court). 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.
Expedia, Inc. v. City and County of Denver, Colorado, (District Court, Denver Colorado): On February 8, 2012, the
City's appointed hearing officer issued his final administrative decision finding the OTCs are subject to Denver's Lodger's Tax,
and approved an assessment against Orbitz in the amount of $0.6 million. On February 13, 2012, the OTCs filed their notice of
intent to appeal the hearing officer's final administrative decision. On March 30, 2012, the City filed a motion to dismiss the
first claim for relief of the OTCs complaint. On July 26, 2012, the District Court denied the City's motion to dismiss. On
October 2, 2012, the OTCs filed their brief supporting their claim for relief. On March 12, 2013, the District Court, Denver,
Colorado affirmed in part and reversed in part the Hearing Officer’s February 8, 2012 ruling. The District Court found the
Hearing Office did not abuse his discretion in finding that the OTCs fall within the scope of the Lodging Tax statute; however,
the District Court found the three year statute of limitations period applied to Denver’s assessments. On April 26, 2013, the
OTCs appealed. On May 10, 2013, the City filed its notice of appeal regarding the District Court’s ruling that the three year
statute of limitations period applied to Denver’s assessments.
In Re Transient Occupancy Tax Cases, Coordination Proceeding No. 4472 (Superior Court of the State of California for
the County of Los Angeles).
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, against various Orbitz entities. On March 31, 2010, we 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 for the County of Los Angeles granted the OTCs motion for
summary judgment. On October 10, 2013, the Superior Court for the County of Los Angeles 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