City of Columbus v. Hotels.com, L.P., 693 F.3d 642

Ohio localities sue online travel companies for occupancy taxes on the revenue difference between wholesale hotel rates and higher retail rates; companies argue no tax collection obligation under local laws.
District court dismissed some claims, granted summary judgment for defendants on remaining claims that OT companies collected taxes but did not remit; amended posture consolidated actions from Findlay, Columbus, and Dayton with others joining.
Laws at issue fall into three categories: (i) vendor-focused ordinances/regulations, (ii) operator-focused ordinances, and (iii) hotel-focused township resolutions; the district court held OT companies fit none of these definitions.
Court held the tax laws impose collection duties only on vendors, operators, or hotels, and OT companies do not fit those roles; thus no duty to collect/remit under those provisions.
Localities appealed three aspects: district court’s statutory interpretation ruling, summary judgment for OT, and denial of questions-certification to the Ohio Supreme Court; court affirms the district court’s decision.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether OT companies fall within vendors, operators, or hotels under the local laws	Localities contend OT fit vendor/operator/hotel definitions	OT companies do not own, operate, or manage hotels; not vendors/operators/hotels	Laws do not apply to OT as vendors/operators/hotels; no liability under those categories
Whether hotels delegated tax-collection duties to OT companies	Hotels delegated collection duties to OT	Delegation claim raised too late for review; not timely on summary judgment	Claim not considered; not reversible error to exclude it
Whether the laws tax 'transactions' or 'rents' paid for lodging by guests	Laws tax the transactions or rents (retail) paid for lodging by guests	Taxes target amount paid to hotel for lodging, not service fees or booking fees	Taxes apply to amounts paid for lodging; OT not liable for collection of such taxes; no remittance issue raised
Whether there is a genuine issue of material fact that OT collected taxes yet did not remit	OTs collected taxes/fees but did not remit	Evidence shows combined charges; no deception; some taxes remitted to hotels; no unreconciled remittance	No genuine issue; district court’s summary judgment affirmed
Whether the district court should certify the state-law issue to the Ohio Supreme Court	Certification appropriate because Ohio law unsettled	Certification inappropriate after adverse ruling and late stage	District court acted within discretion; denial of certification affirmed

Louisville/Jefferson Cnty. Metro Gov’t v. Hotels.com, L.P., 590 F.3d 381 (6th Cir. 2009) (interpret statutes using plain language; determine tax applicability under Ohio law when ambiguity exists)
Courie v. Alcoa Wheel & Forged Prods., 577 F.3d 625 (6th Cir. 2009) (Rule 12(b)(6) dismissal standards; plausibility standard)
Traverse Bay Area Intermediate Sch. Dist. v. Mich. Dep’t of Educ., 615 F.3d 622 (6th Cir. 2010) (plausibility standard applied to state-law claims; factual testing warranted)
AT&T Commc’ns of Ohio, Inc. v. Lynch, 132 Ohio St.3d 92, 969 N.E.2d 1166 (Ohio 2012) (statutory interpretation; ambiguity favored to taxpayer)
Zalud Oldsmobile, Inc. v. Limbach, 68 Ohio St.3d 516, 628 N.E.2d 1382 (Ohio 1994) (ambiguous tax statutes construed in taxpayer favor)
B.F. Goodrich Co. v. Peck, 161 Ohio St. 202, 118 N.E.2d 525 (Ohio 1954) (tax statutes construed strictly against taxing authority)
Geiler Co. v. Lindley, 66 Ohio St.2d 514, 423 N.E.2d 134 (Ohio 1981) (remit amounts collected as taxes when itemized to customers)
City of Fairview Heights v. Orbitz, Inc., 2006 WL 6319817 (S.D. Ill. 2006) (rejected loophole argument about wholesale vs retail taxation)
Louisville/Jefferson Cnty. Metro Gov’t v. Hotels.com, L.P., 590 F.3d 381 (6th Cir. 2009) (cited above; ensure correct interpretation of tax liability on OT platforms)