(CN) – Online travel companies are not required to pay a North Carolina county’s hotel occupancy tax, the 4th Circuit ruled. Pitt County sued Hotels.com, Priceline, Travelocity and other online travel companies for failure to pay the tax.
The district court dismissed the case for lack of standing.
Judge Michael of the Virginia-based federal appeals court ruled that the county did have standing but failed to state a claim.
The companies purchase hotel rooms at wholesale rates, then mark up the costs before selling the rooms to travelers. However, the judge ruled that the travel companies did not fall under the definition of a retailer.
“Operators of hotels, motels, tourist homes, tourist camps, and similar type businesses are considered retailers under the statute,” Michael noted. “We conclude that an online travel company does not meet this definition.”