Tax Law

Sam Harkinson Previously employed as an Assistant County Attorney, and as an insurance adjuster, now as an associate at Hoefle, Phoenix, Gormley & Roberts

Sam Harkinson
Previously employed as an Assistant County Attorney, and as an insurance adjuster, now as an associate at Hoefle, Phoenix, Gormley & Roberts

No. 2017-0674
March 8, 2019

  • Whether a third-party provider that allows end users to reserve hotel rooms but does not engage in the operation of a hotel is otherwise obligated to provide payment of a New Hampshire rooms and meals tax, and/or violates the New Hampshire Consumer Protection Act by bundling service fees and taxes that it collects for the hotels operators that it reserves rooms with.

The State of New Hampshire (the State) appealed an order granting judgment for, Incorporated n/k/a The Priceline Group, Inc. (the “Respondent”) after a bench trial. On Appeal, the State alleges that the Respondent violates New Hampshire law by failing to remit payment for the meals and room taxes in New Hampshire on transactions with hotel customers, and by bundling money collected from consumers as taxes with other amounts and violates the New Hampshire Consumer Protection Act by bundling tax monies with other service fees.

The Court begins by analyzing the business that the Respondent engages in, and by acknowledging that the Respondent engages in a “merchant model” in transacting business. Under this model, the Court goes on to explain that an end user pays the Respondent, not a local hotel, for a hotel booking through the Respondent’s website. That money includes all service fees and applicable taxes. The price paid is often times a discounted price to what an end user would pay if they went straight through the local hotel. However, the price the end user pays also reflects a percentage of money that the Respondent makes on each transaction. The local hotel takes care of paying the rooms and meals tax for the room rental to the New Hampshire Department of Revenue. On appeal, the State argued that this arrangement violates New Hampshire law since the Respondent does not pay any taxes on the money that it retains as profit and/or service fees associated with the room reservation.

In affirming the trial court’s decision, the Court analyzed the applicable New Hampshire Statutes as they relate to the room and meals tax and concluded that the Respondent is not an operator under the statute, and is, therefore, not under an obligation to pay any portion of taxes to the Department of Revenue. The Court rejected the arguments that by accepting money from the end user, the Respondent has somehow become an operator of a hotel for purposes of paying room and meals tax. The Court further rejected the State’s argument that the principle of administrative gloss applies to the case.

The Court further concluded that the bundling of the service and tax money did not violate the New Hampshire Consumer Protection Act. The Court specifically cited the fact that the Respondent advertises the fact that they collect all service fees and taxes related to the reservation. The Court concluded that they had not fraudulently misled any consumer, since the consumer agrees to the arrangement prior to concluding the reservation. The Court, therefore, affirmed the trial court’s order finding judgment for the Respondent.


Gordon J. MacDonald, Attorney General, Philip B. Bradley, Assistant Attorney General, K. Allen Brooks, Senior Assistant Attorney General all on the brief, John W. Crongeyer, of Crongeyer Law Firm, P.C. on the brief and orally, and Paul I. Hotchkiss and Alexandria E. Seay, of Bird Law Group on the brief for the State. Christopher J. Sullivan, Michael S. Lewis, and Richard W. Head of Rath Young and Pignatelli, PC all on the brief, Jennifer J. McGaghey on the brief, and Anne Marie Seibel on the brief and orally, all of Bradley Arant Boult Cummings, LLP, Brian Staner and Scott R. Wiehle on the brief, of Kelly Hart & Hallman, LLP, and Jeffrey A. Rossman, of Freeborn & Peters, LLP, on the brief for the Defendants.