Montana Department of Revenue v. Priceline.Com, Inc.

Summary

The Montana Supreme Court considered whether online travel companies must collect and remit Montana lodging facility use taxes and sales taxes on fees charged to customers. The court held that the lodging facility use tax did not apply because the companies were not facility owners or operators, but the sales tax did apply because the companies sold taxable services. The court held that the companies were liable for sales taxes on those fees beginning November 8, 2010, when the Department filed suit.

Holdings

1. Online travel companies are not required to collect or remit Montana's Lodging Facility Use Tax on their customer fees because they are not owners or operators of lodging facilities.
2. The Montana Sales Tax applies to fees retained by online travel companies for booking accommodations, and the companies are sellers required to collect and remit tax on those fees.
3. The Sales Tax applies to online travel company fees associated with rental vehicles because the statutory term base rental charge must be read consistently with sales price, which includes the value of services.
4. The online travel companies are liable for unpaid sales taxes on their fees accruing from November 8, 2010, the date the Department filed suit.

Questions Presented

1. Whether online travel companies were required to collect and remit Montana's Lodging Facility Use Tax on fees charged to customers.
2. Whether online travel companies were required to collect and remit Montana sales tax on fees charged for hotel accommodations and campgrounds.
3. Whether online travel companies were required to collect and remit Montana sales tax on fees charged for rental vehicles.
4. Whether the Court's ruling should apply retroactively, including whether liability extended to sales taxes accruing after the Department filed suit.

Disposition

other