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Taxing Online Travel Companies: The North Carolina Business Court And The Fourth Circuit Don’t See It The Same Way
Have you ever booked a hotel room through an online reseller like Hotels.com, Priceline, or Orbitz? If you have, you might be interested in this post, even though you might not otherwise be interested in an issue of North Carolina state tax law.
Those companies, and other internet resellers of hotel rooms, have a significant tax dispute pending in North Carolina’s courts. And right now, the Fourth Circuit is directly at odds with the North Carolina Business Court on the proper outcome.
The tax problem comes up because the customer is paying these companies more than the price at which the online company purchases the hotel rooms from the hotel operator. That’s obvious, that’s how they make a profit. What’s not so obvious is that the online companies charge Occupancy Tax based on the full price of the room, but they only remit tax calculated at the lower price they paid to buy the room. They keep the difference, which they call a "nonitemized service fee."
This questionable practice has led to a flurry of litigation by municipalities against Hotels.com, Priceline, and other online vendors, like Orbitz and Travelocity. Four of those cases are being litigated in the North Carolina Business Court, brought by Dare County, Mecklenburg County, Wake County, and Buncombe County. Similar cases are pending throughout the country.
Last week, the online travel companies scored a big win when the Fourth Circuit affirmed the grant of a Motion to Dismiss in a case brought by Pitt County, in Pitt County v. Hotels.com, L.P. (I read about that decision on the North Carolina Appellate Blog). The Fourth Circuit ruling is apparently the first appellate decision in the country on this issue, but that ruling is directly at odds with a decision by Judge Diaz in the Business Court, Wake County v. Hotels.com, L.P., 2007 NCBC 35 (N.C. Super. Ct. Nov. 19, 2007). Continue Reading Taxing Online Travel Companies: The North Carolina Business Court And The Fourth Circuit Don’t See It The Same Way
Don’t Bookmark This Blog, There’s A Better Way
If you have this blog in your bookmarks in Firefox or Internet Explorer, and you check it from time to time, DON’T do that. That’s not because I don’t want you to read it, it’s just that there are two better ways to get news from this blog and just about every other blog and
Miller & Long, Inc. v. Intracoastal Living, LLC, January 8, 2009 (Jolly)(unpublished)
Plaintiff sued to impose a constructive trust on property purchased by the Defendant LLC at a foreclosure sale. It alleged that some of the members of the Defendant LLC had been members of the LLC which had defaulted on the mortgage loan in question. Plaintiff contended that it was "inequitable for [the Defendant] to own
Kohler Co. v. McIvor, October 13, 2004 (Diaz)(unpublished)
This is an opinion from Judge Diaz before he joined the Business Court, in which he denied a Motion for Sanctions.
The basis for the Motion was that Plaintiff should not have taken the position that North Carolina law applied to the covenant not to compete at issue. The Defendant worked for Plaintiff in North
Walters & Zimmerman, PLLC v. Zimmerman,, January 7, 2009 (Tennille)(unpublished)
The Court appointed a receiver to conduct the winding up of a dissolved professional corporation. One of the reasons given by the Court was that the Member-Manager of the dissolved entity, a law firm, had a conflict due to her individual interests and the interests of her new professional corporation.
A Big Day For Business Cases At The North Carolina Court Of Appeals
The Court of Appeals decided today cases involving a non-compete, dissolution of a partnership, the public policy exception to the termination of at-will employment, the rules of professional responsibility, and the economic loss rule. Here are quick summaries of these five cases:
Non-Compete. In Medical Staffing Network, Inc. v. Ridgway, the Court of
Why Firefox Is The Best Internet Browser For Lawyers
If you are litigating business cases, or any kind of cases where you might be doing legal research, Firefox is the best internet browser and you should dump Internet Explorer and change to Firefox. Right now.
Why should you do that, especially if it puts you in the minority of internet users? There are probably a lot of reasons, but this post is about only two of them. They are both "add-ons" for Firefox. Add-ons let you customize Firefox.
Jureeka automatically adds a hyperlnk to a court decision or a statutory reference on a web page if it can find it. Jureeka does that by looking to the open law sources like PreCYdent, which is one of a number of ventures putting case law and statutory law in the public domain. Another one is the Public Library of Law, which calls itself "the world’s largest free law library," and another is altlaw.com. These sites have federal decisions and a lot of state court decisions that you would ordinarily have to go to Westlaw or LEXIS to find.
Here’s an example of why this is a useful thing: last month, I wrote a post about a decision from the Middle District of North Carolina which found jurisdiction over a defendant because of its use of metatags on its website. In the post, I referenced a decision to the contrary from the Second Circuit. If you were looking at that post in Firefox, with the Jureeka add-on, you would have seen the Second Circuit case with a hyperlink, looking like this:
You could just click on the hyperlink (it’s not live in this post) and save yourself the trouble of going to Westlaw or LEXIS or whatever electronic service you use for federal decisions. And speaking of those services, the other add-on I really like is Citegenie. This takes care of something I find really annoying in Westlaw, the citation format you get when you copy a quotation from a case. Here’s an example of a quote from a case and the citation generated by Westlaw:Continue Reading Why Firefox Is The Best Internet Browser For Lawyers
Ehrenhaus v. Baker, 2008 NCBC 20 (N.C. Super. Ct. Dec. 5, 2008)
The Court denied a motion for preliminary injunction in this litigation involving the merger of Wachovia and Wells Fargo.
The principal holdings of the decision were that (1) the Wachovia Board of Directors, in approving the merger deal, satisfied its obligations under the Business Judgment Rule in light of the dire economic circumstances and lack
Windsor Jewelers, Inc. v. Windsor Fine Jewelers, LLC, November 19, 2008 (Diaz)(unpublished)
The Court entered a Temporary Restraining Order in a dispute between jewelers with similar trademarks. Plaintiff holds a North Carolina state trademark registration for Windsor Jewelers, Inc., and was seeking to enjoin Defendant from using the name Windsor Fine Jewelers.
The TRO says that:
Defendants’ intent to confuse the consuming public is clear, as (notwithstanding