County in suit to claim taxes owed for room rentals

Wednesday, July 21, 2010

Marshall County commissioners have decided to remain plaintiffs in a class action suit against Internet sales of hotel and motel rooms when room rent taxes aren't paid.

County Attorney Ginger Shofner reported on the lawsuit during the most recent meeting of the commission when rules were suspended so a decision could be taken to a vote that night.

"Goodlettsville filed in U.S. District Court," Shofner said.

Defendants include businesses known by their Web site names: Travelocity, Expedia and others, the attorney reported.

Such web-based businesses offer customers a cut rate for rooms that, presumably, would otherwise be empty.

The Internet businesses have not been remitting all of the required room rent taxes to municipalities and counties, according to Shofner's explanation.

Goodlettsville's position, the lawyer explained, is that the web-based room booking agencies should be paying on the ultimate retail price instead of the reduced rate paid by the customers.

More than 125 counties and municipalities are plaintiffs in the class action suite.

Shofner recommended Marshall County remain in the class of local governments attempting to collect what's alleged to be un-paid taxes.

If there was a settlement, Marshall County wouldn't receive any part of what ever that amount might be unless it remained in the suit, she said.

"I don't think there's a great chance of a great recovery," Shofner said. "I don't think that a lot of rooms here are sold on the Internet."

Commissioner Richard Medley moved to have the county remain a plaintiff in the legal action and the commissioners unanimously voted yes.

Also during the commissioners' meeting on June 28, the commissioners unanimously voted to:

* Change the school budget to acknowledge a federal grant of economic stimulus funds. Nearly $1,464 in American Recovery and Reinvestment Act money is to help Internet connectivity.

* Spend $650 on an advertisement in the Voice Magazine, a publication of the Tennessee Walking Horse Breeders and Exhibitors Association which is headquartered on North Ellington Parkway.

* Borrow money through a tax anticipation note in conjunction with a resolution to continue spending at a rate authorized last summer. The resolution took effect July 1, the first day of each fiscal year. Spending under this continuing resolution - similar to what Congress does when it fails to adopt an annual budget each fall, requires approval of the State Director of Local Finance and prohibits spending greater than 60 percent of the amount authorized in each part of the budget for fiscal year 2009-10.