Thursday, January 15, 2009, 10:41 AM

4th Circuit Rejects Pitt County's Suit Against Online Travel Companies

Yesterday the Fourth Circuit rejected a class action lawsuit by Pitt County, NC, which was based on the failure of online travel companies to pay the County's hotel occupancy tax. The case is Pitt County v. Hotels.com, L.P. The Court held that online travel companies aren't subject to the tax because they're not "retailers" (under the State's sales tax code) since they aren't businesses of a type similar to "hotels, motels, tourist homes, [or] tourist camps," as the statute provides. "A business that arranges for the rental of hotel rooms over the internet, but that does not physically provide the rooms, is not a business that is of a similar type to a hotel, motel, or tourist camp," the Court held.

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