City of Houston v. Hotels.com, L.P., 357 S.W.3d 706

Houston imposes a 7% city tax and the Sports Authority adds a 2% tax on the 'cost of occupancy' in hotels.
OTCs operate under a merchant model: hotels invoice OTCs for discounted room rates plus local occupancy taxes.
Consumers pay OTCs a marked-up rate plus taxes and fees; taxes in dispute are assessed on the amount paid to hotels, not to OTCs.
Houston sued OTCs for unpaid occupancy taxes, conversion, and related relief, seeking an accounting and constructive trust.
The trial court granted summary judgment for OTCs; Houston appealed arguing taxes apply to full consumer payment.
The court construes tax statutes strictly against the taxing authority and liberally in favor of the taxpayer; ambiguity favorable to OTCs.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether tax on 'cost of occupancy' applies to amount paid to OTC or to the hotel	Houston: taxes apply to consumer payment to OTCs (full amount).	OTCs: taxes apply to discounted hotel rate (amount paid to hotel).	Taxes plausibly taxed the hotel-discounted amount.
Whether there are genuine issues of material fact precluding summary judgment on tax and related claims	Houston contends factual disputes exist about control and collection.	OTCs: no material fact issues preclude judgment; taxes on hotel payments remit.	No genuine issues; summary judgment proper for OTCs on tax and related claims.

Bullock v. Statistical Tabulating Corp., 549 S.W.2d 166 (Tex. 1977) (ambiguity resolved in favor of the taxpayer)
City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (summary-judgment standards; no-evidence review)
TGS-NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432 (Tex. 2011) (statutory construction; interpret ambiguous statutes)
First American Title Ins. Co. v. Combs, 258 S.W.3d 627 (Tex. 2008) (interpretation of ambiguous statutes against taxing authority)