Supreme Court Oral Argument 2015

Montana SealThe Montana Supreme Court will hear oral argument in Montana Department of Revenue v. Priceline.com, Inc., at the University of Montana’s Dennison Theatre on April 10, 2015. The event begins with an introduction at 9:30 a.m. followed by the hearing at 10 a.m. The hearing will last approximately one hour and fifteen minutes. Students from the University of Montana and area schools are invited to attend. The hearing is open to the public.

Priceline.com and other online travel companies provide travel information and secure reservations for travelers for lodging and car rental services, conducting business with consumers through the Internet. Under Montana law, the state imposes sales and use taxes on lodging and rental car services that are paid by the customer and collected by the hotel and/or rental car companies (vendors). In contracts between the online travel companies and Montana vendors, the online travel companies agree to charge the tax to the customer based on the “net rate” of the room or car rental. The net rate is presumably a wholesale rate that is less than if the customer booked directly with the vendor. Therefore, tax imposed and collected on the net rate is less than the tax would be if the customer booked directly.

The question presented to the Montana Supreme Court is whether the difference between the net rate and the amount ultimately paid by the consumer are subject to Montana lodging taxes and/or rental vehicle taxes. The Montana Supreme Court will consider whether the District Court erred in granting judgment as a matter of law in favor of the online travel companies.

Professor Pippa Browde, an expert on federal tax law who teaches at the University of Montana School of Law, will give an introduction to the case. Professor Browde will give a background on the judicial system, both in Montana state courts and the federal courts. She also will outline the issues presented on appeal in the case, the arguments she expects the parties to make, and the national significance of the case as it relates to similar cases being litigated across the country.