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Colorado Supreme Court Announces Decision in OTA Tax Case


ASTA Members:

A case with potentially significant implications for the travel industry was decided by the Supreme Court of Colorado on May 28. The case, captioned Town of Breckenridge v. Egencia, LLC, et al., concerned the issue of whether Breckenridge’s tax code requires online travel agencies (OTAs) to collect the town’s accommodations tax from their customers.

The court immediately below, the Court of Appeals, previously decided that question in the negative, finding that the OTAs were neither “lessors” nor “renters” as those terms are defined in the town’s tax ordinance, and as such the OTAs were not parties responsible to either collect or remit the tax. On its appeal to the Colorado Supreme Court, Breckenridge disputed the lower court’s interpretation of its code and also asserted that the 2017 decision in the case of City and County of Denver v. Expedia, Inc., et al., compelled a reversal. In that case, the Supreme Court in a narrow 4-3 decision held that OTAs were liable to remit occupancy taxes under a statute substantially similar, but not identical, to the one at issue in Breckenridge

Because one member of the seven-justice Supreme Court recused herself from the proceedings, the case was heard by only six judges. Three of the six were of the opinion that the Court of Appeals’ decision should be affirmed, while the remaining three were of the opinion that reversal was warranted. The 3-3 deadlock resulted in the lower court’s opinion standing, and accordingly the OTAs prevailed. A copy of the Court’s affirmation can be found here.   

Although only OTAs were named as defendants in Breckenridge, the town’s arguments concerning the application of the accommodation tax ordinance could be logically extended to cover hotel bookings made by traditional travel advisors utilizing the so-called “merchant model,” wherein the agency appears as the merchant of record on the purchaser’s credit card statement. ASTA filed an amicus brief in the case in January in which it raised this point, among others, and urged the Supreme Court to affirm the decision of the Court of Appeals.      

While we are pleased with the outcome in Breckenridge, it is important to note that the Supreme Court did not decide the case on the merits. Given this, it seems likely that municipalities in Colorado will continue to interpret their lodging tax ordinances broadly so as to encompass the activities of the OTAs and, by extension, all advisors utilizing the merchant model. If that is indeed what ultimately transpires, further litigation on the issue is almost certain to result.

ASTA will, of course, continue to advocate for the interests of our members in Colorado and nationwide. Members who have questions or seek additional information about the decision may contact ASTA’s General Counsel, Peter Lobasso, at

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