Alachua County v. Expedia, Inc., 110 So. 3d 941

Florida’s Local Option Tourist Development Tax (section 125.0104, Fla. Stat.) is challenged as to whether it applies to the entire amount charged by Online Travel Companies (OTAs) or only to the portion remitted to hotels.
OTAs operate websites enabling customers to view hotels and book rooms; the OTA reserves with the hotel, the hotel may accept, and the OTA collects payment from the customer.
The OTA forwards a portion of the payment to the hotel and retains a markup for services; the customer pays nothing directly to the hotel until arrival.
The trial court found ambiguity in the statute and held the Tax applies only to the amount forwarded to hotels, not the OTA’s markup; it read the statute in favor of taxpayers.
The majority affirms the trial court, holding the Tax is due on the consideration paid for occupancy (the hotel’s portion), not on the OTA’s retained markup; the legislature, not the judiciary, should decide whether to tax the full amount charged to consumers.
Dissent argues the Tax should apply to the total amount paid by the tourist, including OTA retainage, and cites Miami Dolphins to support taxation of the gross hotel bill.

Issue	Plaintiff's Argument	Defendant's Argument	Held
What is the proper tax base under 125.0104(3) for OTAs facilitating hotel reservations?	Appellants contend tax is on the full amount paid by the tourist.	Majority argues tax is on the hotel’s consideration for occupancy, excluding OTA markup.	Tax base limited to hotel portion; OTA markup not taxed.
Does the Tax target the privilege of renting to tourists or operating a hotel?	Tax targets the privilege of operating hotels in Florida.	Tax targets the privilege of renting to tourists (renting rooms).	Privilege taxed is renting rooms to tourists, not operating hotels.
Do agency vs merchant models affect tax liability under the statute?	Merchant model should be taxed on the full consideration.	Taxable event remains the occupancy consideration; model does not alter liability.	Liability based on total consideration for occupancy; merchant model does not tax-free the markup.

Miami Dolphins, Ltd. v. Metropolitan Dade County, 394 So.2d 981 (Fla. 1981) (tax imposed on renters of living space for six months or less; tax collected by hotels)
Maas Bros., Inc. v. Dickinson, 195 So.2d 193 (Fla.1967) (ambiguous tax statutes construed in favor of taxpayers)
Florida Revenue Commission v. Maas Bros., 226 So.2d 849 (Fla.1st DCA 1969) (tax on renting space; not the incident of payment)