DAVID A. KATZ, District Judge.
This matter is currently before the Court on Defendants' motion for summary judgment. For the reasons that follow, Defendants' motion is granted.
Defendants are companies that operate websites on which consumers may reserve hotel rooms. The process generally works as follows: Defendants pay hotels a certain rate for the ability to offer rooms on their websites (the "net rate"). The net rate represents the amount that hotels agree to accept for room rental. When a consumer subsequently reserves a hotel room through one of Defendants' websites, the consumer pays a higher rate (the "reservation rate"), which has been marked-up to compensate Defendants for their services. Moreover, the consumer pays a "tax recovery charge, " which Defendants calculate by multiplying the tax rate by the net rate. Defendants remit the tax recovery charge to the hotel, and the hotel remits the occupancy taxes to the taxing authorities.
Plaintiffs Hamilton, Cuyahoga and Erie Counties brought this suit against Defendants alleging that they violate Plaintiffs' occupancy tax laws. Plaintiffs claim Defendants are required to calculate occupancy taxes based on the reservation rate, not the net rate. Moreover, Plaintiffs claim Defendants improperly fail to separately state the amount Defendants charge for taxes on consumer invoices. Plaintiffs further allege that Defendants do not remit all money that Defendants collect as taxes.
The nature of Plaintiffs' claims is not new to Defendants, to this Court, or to the Sixth Circuit. Previously, a number of Ohio cities brought a consolidated action against Defendants for violation of similar tax laws. See City of Columbus v. Hotels.com , Nos. 3:05cv7443, 3:07cv2117 (N.D. Ohio) (hereinafter, "Columbus Action"). In that case, this Court granted Defendants' motions to dismiss on the issues of proper calculation and collection of taxes, and also granted Defendants' subsequent motion for summary judgment on the claim that Defendants failed to remit money they collected as taxes. The Sixth Circuit affirmed, finding that the cities' regulations did not impose a duty on Defendants to collect taxes, that the regulations did not tax anything beyond the net rate, and that the cities offered no evidence to show that Defendants failed to remit money they collected as taxes. See City of Columbus v. Hotels.com, 693 F.3d 642, 650, 51, 53-54 (6th Cir. 2012) (hereinafter, "Sixth Cir's. Columbus Action Op.").
In the instant matter, as in the City Action, this Court granted Defendants' motion to dismiss as to claims that Defendants should have collected taxes on the reservation rate instead of the net rate. The Court denied the motion to dismiss as to claims that Defendants failed to remit money collected as taxes. Defendants now move for summary judgment on this issue. Additionally, Plaintiffs' opposition briefs ask the Court to reconsider its ruling on Defendants' motion to dismiss.
Nearly seventeen months after the Court ruled on Defendants' motion to dismiss, Plaintiffs seized the occasion of their summary judgment response briefs to ask the Court to reconsider its ruling. Plaintiffs' request is not well-taken.
First, Plaintiffs insist that the regulations impose a direct collection obligation on Defendants. The regulations, however, only impose collection obligations on "Vendors" or their agents (Hamilton and Cuyahoga Counties), and on "Operators" or their agents (Erie County). As explained in this Court's prior opinion, Defendants do not meet these definitions as a matter of law. (Doc. 56 at 3-4); see also Sixth Cir's. Columbus Action Op. , 693 F.3d at 648-50 (finding Defendants did not meet similar definitions in city tax ordinances).
Second, Plaintiffs argue that their regulations are not limited to the smaller net rate on which Defendants currently remit taxes. Rather, Plaintiffs argue that their regulations tax the Defendants' larger reservation rate. Plaintiffs support this argument by citing the regulations' enabling statute, as well as the regulations themselves, which impose taxes not only on transactions by which lodging is furnished, but also on transactions by which lodging is to be furnished. Yet, the Sixth Circuit rejected a similar argument in the Columbus Action. See Sixth Cir's. Columbus Action Op. , 693 F.3d at 651 (analyzing comparable language in city tax ordinances). Specifically, the Sixth Circuit found that notwithstanding language regarding transactions by which lodging is to be furnished, the city ordinances were only "concerned with the amount paid to the hotel for lodging [i.e., the net rate, ] not the amount paid for service or booking fees or for the cost of using the [Defendants'] services...." Id.
Importantly, the language of at least one ordinance analyzed by the Sixth Circuit in the Columbus Action (the Monclova Ordinance), is nearly identical to the language of the regulations at issue in the instant matter. As such, the Sixth Circuit's analysis is sufficiently analogous to reject Plaintiffs' argument. Compare id. (quoting Monclova Ord. §§ 2(H), 3(A)) (Monclova imposes tax on "transaction[s]... by which lodging is or is to be furnished by a vendor to a transient guest... at the rate of [three percent] of the rent for each such transaction" where rent is defined as "the aggregate in money... paid... for hotel lodging"); with Hamilton County Reg. §§ 2(J), 3(A) (Hamilton County imposes tax on "transaction[s]... by which lodging is or is to be furnished by a vendor to a transient guest... at the rate of [three percent] of the rent for each such transaction" where rent is defined as "the aggregate value in money... paid... for hotel lodging"); Cuyahoga County Reg., Definitions § (I), Levy of Tax § (A) (Cuyahoga County imposes tax on "transaction[s]... by which lodging is or is to be furnished by a vendor to a transient guest... at the rate of [three percent] prior to March 1, 1993, and [four and one-half percent] thereafter of the rent for each such transaction" where rent is defined as "the aggregate value in money... paid... for hotel lodging"); Erie County Reg. §§ 2(e), 3 (Erie County imposes tax on "transactions by which lodging is or is to be furnished to transient guests. The tax is [two percent] on all rents paid... for the lodging" where rent is defined as "the consideration received for occupancy"). Plaintiffs attempt to distinguish the city ordinances by arguing that the enabling statute behind them incorporates certain definitions that are not incorporated in the counties' enabling statute. Plaintiffs' argument is unpersuasive, as they do not identify any definitions that would affect the above analysis.
Third, Plaintiffs Erie County and Cuyahoga County maintain that Defendants violated the regulations' requirement that all taxes be separately stated on consumer invoices. Plaintiffs do not offer any new arguments in asking the Court to ...