Thursday, April 03, 2014

Summary 2014 WY 43

Summary of Decision April 3, 2014

Justice Davis delivered the opinion of the Court. Affirmed.


Docket Number: S-13-0078


W.R.A.P. 12.09(b) Certification from the District Court of Laramie County The Honorable Peter G. Arnold, Judge.

Representing Appellant: Lawrence J. Wolfe, P.C., and Brynn A. Hvidston of Holland & Hart, LLP, Cheyenne, Wyoming; Jeffrey A. Rossman of McDermott Will & Emery LLP, Chicago, Illinois. Argument by Mr. Rossman.

Representing Appellee: Peter K. Michael, Wyoming Attorney General; Martin L. Hardsocg, Deputy Attorney General; Cathleen D. Parker, Senior Assistant Attorney General. Argument by Ms. Parker.

Date of Decision: April 3, 2014

Facts: Appellee Wyoming Department of Revenue (Department) directed Appellants, which are on-line travel companies (OTCs), to collect and remit tax on the total amounts they collected from customers booking hotel rooms in Wyoming. Appellants appealed the order to the State Board of Equalization (SBOE), which upheld it. The OTCs petitioned the First Judicial District Court for review, and it certified the case to this Court, which accepted the certification.

Appellants argue that Wyoming’s sales tax statutes do not reach the markup they charge for a variety of reasons. They contend that application of Wyoming sales tax to them violates the Dormant Commerce Clause, the Equal Protection Clause, and the Due Process provisions of the United States Constitution. They also urge us to find that it violates the federal Internet Tax Freedom Act.

1. Did the SBOE err in finding that the full amount paid to the OTCs for a reservation of a hotel room in Wyoming was taxable by the Department because:

a. It concluded that the OTCs are “vendors” of lodging services under Wyoming Statute § 39-15-101 et. seq.?

b. It concluded that the amount the OTCs consider to be “online reservation facilitation fees” were instead part of the sales price for “lodging services” under Wyoming’s sales tax?

c. It concluded that the amount the OTCs believe to be a service fee is taxable in Wyoming?

2. Does the Department’s imposition of sales tax on the full amount the OTCs collect violate the Dormant Commerce Clause of the United States Constitution?

3. Does imposition of the sales tax on the full amount the OTCs collect violate the Equal Protection Clause of the United States Constitution?

Holdings/Conclusion: We find that the Wyoming Legislature intended to tax the entire amount an OTC customer pays for the right to occupy a hotel room in Wyoming. We also conclude that the sales/lodging tax statutes are constitutional when applied as the Department has applied them, and that imposition of sales/lodging tax on the entire amount paid for the right to occupy a room does not violate the Internet Tax Freedom Act. We therefore affirm the SBOE decision upholding the Department’s application of the tax.

Summaries are prepared by Law Librarians and are not official statements of the Wyoming Supreme Court.

[SPECIAL NOTE: This opinion uses the "Universal Citation." It was given an "official" citation when it was issued. You should use this citation whenever you cite the opinion, with a P.3d parallel citation. You will also note, when you look at the opinion, that all of the paragraphs are numbered. When you need to provide a pinpoint citation to a quotation, the universal portion of the citation will use that paragraph number. The pinpoint citation in the P.3d portion will need to have the reporter page number. If you need assistance in putting together a citation from this, or any future opinion using the Universal Citation form, please contact the Wyoming State Law Library and we will provide any needed assistance.]

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