Colorado Supreme Court to hear Breckenridge case about whether online travel companies must pay accommodation taxes

Sawyer D'Argonne
Summit Daily

BRECKENRIDGE — Should online travel companies have to pay accommodation taxes? That’s one of many questions the Colorado Supreme Court will have on its plate early next year.

In 2016, Breckenridge brought a case against 16 online travel companies, including Expedia,,, Hotwire and a number of other notable fixtures in the industry. The town asserted that the companies are required under town code to collect and remit accommodation and sales taxes to the town on hotel rooms booked through their websites. The district court disagreed, and the case was taken to the court of appeals.

But Breckenridge didn’t have any better luck at the appellate level, as the Colorado Court of Appeals affirmed the holding of the district court despite the town’s assertions that the court erred in determining that the companies were not “renters” or “lessors,” that the court misapplied the summary judgment standard, that its sales tax claim shouldn’t have been dismissed and that its motion for class action certification should have been granted.

In August, the Colorado Supreme Court agreed to hear the case.

According to the appellate court opinion penned by Judge Dennis Graham, whether or not the companies were required to pay accommodation taxes under the town code was largely a matter of definitions and language within the code.

Breckenridge contends that the companies are renters or lessors under the code because they essentially sell the right to use hotel rooms, and that the code doesn’t require a person to have physical possession of the right sold. The companies maintain that they’re technology companies that act as intermediaries between purchaser and hotels.

The town imposes a 3.4 percent tax on the price paid for leasing or renting a room. But the court of appeals noted that physical possession is inherent in the meaning of renting and leasing, and because the hotels maintain possession of the rooms the companies are essentially working as brokers, meaning they’re not subjected to the tax.

“Since the (companies) had no possessory interest and were not engaged in the business of owning, operating, or leasing, and could not independently grant customers access to rooms, they could not be liable for collecting and remitting taxes,” wrote Graham.

Breckenridge initially brought the case against the companies hoping to recover unpaid accommodation and sales taxes. However, the district court found that Breckenridge had no cause of action in respect to the sales tax claim because the town failed to exhaust its administrative remedies before taking the issue to court.

The Supreme Court will determine whether the court of appeals erred in holding that the companies are not required to collect Breckenridge’s accommodation tax under the town’s code, but will not hear arguments on the other issues detailed by the court of appeals.


Support Local Journalism

Support Local Journalism

Readers around Steamboat and Routt County make the Steamboat Pilot & Today’s work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.

Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.

Each donation will be used exclusively for the development and creation of increased news coverage.