Court sides with online firms in Fla. tax dispute

Padovano noted the law says local governments can charge a tourist development tax of 1 or 2 percent of "the total consideration" of a short-term lease or rental.

He acknowledged that a Supreme Court ruling in a case involving tourist development taxes paid by the Miami Dolphins football team involved another issue but pointed out the justices in that case also defined the nature of the tax. They said it is paid by renters rather than the businesses collecting the taxes, hence, it is due on the full amount customers pay and not just the rental portion, Padovano concluded.

Padovano wrote that under the majority's interpretation, hotels could set up set up their own subsidiaries for booking, advertising and promotion to avoid paying taxes on portions of customers' bills that go for those expenses.

"Both schemes seek to avoid taxation by making the transaction appear to be something other than what it is," he wrote.

Padovano also noted the majority's opinion conflicts with decisions by state and federal courts outside Florida that have ruled in similar cases, but Hieber said those are the "outliers."

Nabors, though, was encouraged by Padovano's dissent, saying "his opinion was right on point."

The counties participating in the case are Leon, Flagler, Lee Manatee, Pinellas, Polk, Alachua, Nassau, Okaloosa, Seminole, Wakulla, St. Johns, Escambia, Charlotte, Walton, Hillsborough and Pasco. Volusia County is not a party but filed a friend of the court brief supporting the other plaintiffs.

The online companies include Expedia Inc., Hotels.com LP, Hotwire Inc., Orbitz LLC, Orbitz For Business Inc., Trip Network, priceline.com Inc., Travelweb LLC, Lowestfare.com LLC, Travelocity.com LP, Travelocity.com Inc., and Saber Holdings Corp.

Some travel companies in 2010 agreed to pay $6.5 million to 32 Florida counties to settle a federal class-action lawsuit. Orange County in 2011 approved a separate, confidential settlement with Expedia.