City of Birmingham v. Orbitz, LLC

Summary

The Alabama Supreme Court considered whether online travel companies were liable for municipal lodgings taxes on amounts they charged customers for online booking services. The court held that the companies were not engaged in the business of renting or furnishing hotel rooms under the applicable Alabama statutes and municipal ordinances, and therefore were not subject to the taxes. It affirmed summary judgment for the online travel companies and adopted the trial court’s reasoning.

Holdings

1. The online travel companies are not engaged in the business of renting or furnishing hotel rooms or accommodations and therefore are not subject to the municipalities' lodgings taxes on the amounts they retain for online services.
2. Summary judgment for the online travel companies was proper because the undisputed facts showed that they were entitled to judgment as a matter of law.
3. The municipalities did not present evidence supporting an agency relationship sufficient to create a genuine issue of material fact.

Questions Presented

1. Whether online travel companies that facilitate hotel reservations and retain a service charge are engaged in the business of renting or furnishing hotel rooms or accommodations under Alabama's lodgings-tax statutes and municipal ordinances.
2. Whether the undisputed facts established that the online travel companies were entitled to summary judgment.
3. Whether an alleged agency relationship created a genuine issue of material fact precluding summary judgment.

Disposition

affirmed