ATLANTA — The Georgia Supreme Court on Monday partially sided with the city of Atlanta on Monday in a long-standing dispute with online travel companies over taxes.
The Supreme Court upheld a lower court’s ruling that online travel companies (OTC), such as Hotels.com, must pay tax on the “the retail amount paid for occupancy by someone who will occupy the room.”
For example, “if the OTC agrees to pay $60 to the hotel for the right to market a hotel room, but charges the consumer $100 as the room rate, then the taxable amount is $100 under the City’s ordinance,” the court noted.
“This is judicial activism at its worst, and we hope the legislature will review the policy implications of such a court-created tax,” The Associated Press quoted Interactive Travel Services Association Andrew Weinstein as saying.
In its ruling, the state’s Supreme Court agreed with the lower court’s decision that the city is not entitled to collecting back taxes.
Monday’s decision stems from a 2006 lawsuit the city filed against a number of online travel companies, including Hotels.com and Travelocity.
