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CABARRUS COUNTY <br />1 4' BOARD OF COMMISSIONERS <br />REGULAR MEETING <br />OCTOBER 20, 2014 <br />1 <br />AGENDA CATEGORY: <br />New Business <br />SUBJECT: <br />County Attorney - Hotel Occupancy Tax Settlement with Online Travel <br />Companies <br />BRIEF SUMMARY: <br />Wake, Dare, Mecklenburg and Buncombe Counties sued 11 online travel <br />( "OLT ") companies such as Travelocity and Hotels.com for back hotel <br />occupancy taxes on the difference between the amount paid by a <br />consumer for the hotel room itself and the total paid to the OLT company <br />(i.e. the fees retained by the OLT company for that service). <br />On August 19, 2014, the North Carolina Court of Appeals ruled in favor of <br />the OLT companies, holding that the OLT fees were not subject to a <br />county's occupancy tax. However, effective July 1, 2010, during the <br />pendency of these cases, the General Assembly amended N.C. Gen. <br />Stat. 105- 164.4(a)(3) to presumably include these fees as being subject to <br />occupancy taxes. <br />The counties named above have decided to settle their cases with the <br />OLT companies by agreeing prospectively that the occupancy tax will be <br />collected on the OLT fees as well as the hotel room charge. This means <br />that no tax would be due on the fees paid from the date the law changed <br />to the effective date of the agreement. <br />The attorney representing the OLT companies in the litigation has <br />proposed that his clients settle with other counties imposing a hotel <br />occupancy tax on the same basis as with Wake, Dare, Mecklenburg and <br />Buncombe. A draft of the proposed agreement is attached. <br />REQUESTED ACTION: <br />G -3 Page 246 <br />