Remember the long-running case of the online travel companies battling Arkansas governments for not remitting taxes collected on the price of hotel rooms?
As you know, the travel companies have appealed the Jefferson County Circuit Court’s $34.1 million judgment against them to the Arkansas Supreme Court, where it is pending.
In the meantime, the Arkansas State Chamber of Commerce wants to file a friend of the court brief that would support the travel companies, which isn’t sitting well with an attorney who represents the Arkansas government agencies in the suit that was filed in 2009.
The chamber said in its filing that “while the specific question of taxability of the OTCs’ gross receipts is not of broad concern to taxpayers generally, the circuit court’s decision raises concerns about the proper construction of taxing statutes; the proper decisionmaker and procedures for initially determining liability for taxes, penalty and interest; and the proper party to bring tax suits on behalf of the State.” The chamber is represented by attorneys Michael A. Thompson and T.J. Lawhon of Wright Lindsey Jennings of Little Rock.
But Little Rock attorney Thomas Thrash blasted the chamber’s request and asked that the Supreme Court deny the request to file a brief.
“While the State Chamber may represent ‘Arkansas businesses,’ its motion does not reflect the relevant business interest in this case,” Thrash wrote in the filing. “Notably absent is the representation for the interests of the Cities, Counties, A&P Commissions, or the State — all of whom have had their taxes taken from them by an out-of-state entity.”
He also said the chamber overlooks the interests of local hotels, which have been placed at an unfair disadvantage with the online travel companies.
“The State Chamber knows nothing about the activities of the OTCs,” Thrash wrote. He said companies like Expedia, Priceline and Travelocity have taken millions of tax dollars out of the state.
“We’re not going against the state,” said Randy Zook, president of the chamber. Instead, the chamber is “stressing the importance of the fact that the state should be collecting sales taxes and enforcing sales tax laws, not local prosecutors.”
“We’re not opposing any of the rest of that,” he said. “We just want to stress the importance of preserving the rule and the law that the state is responsible for enforcing sales tax laws, not prosecuting attorneys. Because you’d have 50 prosecutors going after businesses like that.”
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