Suit over bed taxes may go to high court

Published: Wednesday, April 17, 2013 at 7:03 p.m.
Last Modified: Wednesday, April 17, 2013 at 7:03 p.m.

The Florida Supreme Court may take up an ongoing legal case that pits Alachua County and other counties throughout the state against online travel companies like Expedia, Travelocity and Orbitz in a bed-tax dispute.

This week, the 1st District Court of Appeal denied a request for a hearing in front of the full court and instead asked the state Supreme Court to resolve the dispute, which hinges on whether the companies are properly paying tourist-development taxes, also known as bed taxes, to counties. The Supreme Court could refuse the request.

A three-judge panel for the appeals court favored the companies in a 2-1 decision in February, according to The News Service of Florida. The appeals court's request is also known as certifying a question of "great public importance" to the Florida Supreme Court.

The crux of the dispute centers on how the businesses should apply bed taxes to their transactions. They charge customers a total price for a room rental in addition to service fees, but the companies only apply the bed tax to the room rate they pay hotels.

The 17 counties involved in this case, including Alachua County, argue the companies should pay the tax on the total amount they charge. The businesses disagree.

Before the appeals court panel ruled in favor of the companies, the counties lost an earlier round of this lengthy fight when a state Circuit Court judge in Tallahassee ruled against them last year.

Alachua County loses about $100,000 a year because of the way online travel companies pay bed taxes. The county levies a bed tax of 5 cents per dollar and uses the money to promote local tourism. It collected $3.5 million in bed-tax revenue for fiscal year 2012.

John Pricher, assistant director of Visit Gainesville, which handles tourism sales and marketing for the county, said he considers the case a matter of public importance because it could change the online travel companies' industry as a whole if the counties prevail.

Tourism is the No. 1 industry in Florida, he said, making this issue important not just for the theme-park hub of Central Florida or beach towns along the coast, but also for cities throughout the state.

"There's so many different facets to Florida tourism," he said. "It's not only theme parks. It's not only a beach."

This case's resolution will impact the counties and companies more than the consumers, he said. People reserving a hotel room are driven by price, not by how the tax money they pay is split up.

If the counties win the case, Alachua County could recoup about $600,000 in uncollected tax revenue from the last 10 years.

But Pricher doubts the counties will recoup past money they lost out on even if they prevail in court. The most important thing, he said, is to ensure the bed taxes are applied properly in the future.

Contact Morgan Watkins at 338-3104 or

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