COLUMBUS, GEORGIA – Online Travel Company Orbitz agreed to settle a case brought by Pope, McGlamry on behalf of the Columbus, Georgia to collect unpaid hotel occupancy taxes. This is the first such settlement in Georgia and one of only a few such cases settled in the United States.
Pope, McGlamry filed this lawsuit and substantially similar cases against Expedia and Hotels.com in Columbus, Georgia. Pope, McGlamry also represents Atlanta, Georgia in a similar case against 17 Online Travel Companies (“OTCs”). There are over 50 such cases pending nationally. Each of these cases allege that the OTCs are selling hotel rooms utilizing what is referred to in the industry as the “merchant model.” Using that business model, the OTC offers hotel rooms for sale on its website for a retail room rate. That room rate is comprised of a net or wholesale rate the OTC agrees to pay the hotel for the transaction and an undisclosed amount retained by the OTC as a margin or mark-up. Despite the fact that the tax is levied on the amount the consumer pays for the room, the OTCs were remitting tax only on the net rate – not the room rate.
Pope, McGlamry was successful in 2 cases before the Georgia Supreme Court on this issue. The Georgia Supreme Court has twice ruled that the tax must be collected and remitted on the retail room rate paid by the consumer. See City of Atlanta.Supreme Court Opinion and Expedia.Supreme Court Opinion.
Pope, McGlamry attorney Mike McGlamry said, “We are proud that the Georgia Supreme Court has made the law clear here in Georgia that OTCs must collect and remit tax on the retail room rate. Pope, McGlamry and the City have worked hard to secure these rulings and this settlement.”
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About Pope McGlamry Kilpatrick Morrison & Norwood, P.C.
Pope, McGlamry, Kilpatrick, Morrison & Norwood, P.C., a Georgia law firm with offices in Atlanta and Columbus, GA, is a recognized leader in the field of civil litigation. The firm specializes in wrongful death and catastrophic injury cases and is a recognized leader in business litigation and class action suits, especially those related to consumer issues. The firm has offices in Atlanta and Columbus, Georgia, and maintains a regional and national practice. For additional information, visit www.pmkm.com.