By Todd Betor and Jonathan Feldman

On February 11, the Wisconsin Court of Appeals held that the receipts earned by Orbitz, an online travel company, from its services and markups for reserved rooms are not subject to sales tax. Specifically, the court determined that Orbitz is not “furnishing” rooms or lodging for purposes of Wisconsin sales tax and rejected the Department’s argument that Orbitz acts as an agent of the hotels. In interpreting the taxing statute, any ambiguity must be resolved in favor of the taxpayer. The court further found that Orbitz’s service of making hotel reservations, but not actually furnishing the accommodations, is not a taxable service. Finally, the court rejected the Department’s attempt to analogize inconsistent decisions from other jurisdictions. Wisconsin Dep’t of Revenue v. Orbitz, LLC, No. 2015AP200 (Wis. Ct. App. Feb. 11, 2016).