Supreme Court Deadlocked on Breckenridge Tax Case

Stalemate leaves intact the Court of Appeals ruling in Breckenridge v. Egencia, which held that online travel companies aren’t subject to the town’s ‘accommodation tax’

A mountain town that buildings are made out of logs and the street is paved with bricks
Breckenridge won’t be able to collect back taxes from Expedia and other online travel companies following a 3-3 tie at the Colorado Supreme Court. / Terry Ott

It took less than three weeks for the Colorado Supreme Court to know it wasn’t going to reach a decision in Breckenridge’s tax case against online travel companies.


Breckenridge sought to compel a group of OTCs including Expedia and Hotels.com to collect and remit its “accommodation tax” for hotel rooms the companies booked in the ski town. The companies argued the town’s tax ordinance doesn’t apply to them because they aren’t technically “renters or lessors” of the lodgings under the law.

After hearing oral arguments May 9, the Supreme Court announced Tuesday that it came to a 3-3 stalemate in the Town of Breckenridge v. Egencia et al. 

As a result, the court left in place the Court of Appeals decision finding that OTCs weren’t subject to Breckenridge’s tax law, affirming the district court’s summary judgment order against the town.

Justices Brian Boatright, Richard Gabriel and William Hood voted to affirm the Court of Appeals decision in favor of the OTCs. Chief Justice Nathan Coats and justices Monica Márquez and Carlos Samour supported a reversal for Breckenridge. Justice Melissa Hart didn’t participate.

In a statement to Law Week, the Town of Breckenridge said it was “disappointed in the close (3-3) decision.”

“The courts recently sided with Denver in a similar court case, and the Town of Breckenridge’s ordinance language differs only slightly from Denver’s,” the statement continued. “We are considering altering our ordinance in light of this decision.”

Sean Connelly, arguing counsel for the OTCs at the Supreme Court, declined to comment on the case’s outcome.

Appellate attorney Blain Myhre said the lack of a decision in Breckenridge only confirms that this kind of tax impasse between local governments and OTCs isn’t going away anytime soon.

“These cases are going to keep coming up because there are going to be municipalities that want to collect taxes from OTCs for lodging that takes place within city limits,” Myhre said. Representing the American Society of Travel Advisors, Myhre authored an amicus brief in Breckenridge v. Egencia in support of the OTCs, but he did not speak to Law Week on ASTA’s behalf.

Breckenridge requires anyone “who furnishes” a hotel or other accommodation “for lease or rental” to collect a 3.4% accommodation tax on what the consumer pays for it. 

The district court found that OTCs weren’t covered under this language, however, and the Court of Appeals affirmed in January 2018.

In April 2017, the Colorado Supreme Court reached a different conclusion in a similar case involving Denver’s “lodger’s tax.” The 4-3 majority in Denver v. Expedia, Inc. held that Denver’s ordinance required OTCs to collect and remit the lodger’s tax on the purchase price of any lodging they sold, including the markup amount they charged on top of the contracted price with the hotel. During oral argument in the Breckenridge case, the justices noted that the language of Breckenridge’s tax ordinance is different from Denver’s.

“The Denver case gives [municipalities] hope that they will win … but this decision shows that the OTCs have arguments as well,” Myhre said.

Notably, Boatright and Hood favored Denver’s position in the 2017 case but came down against Breckenridge in Tuesday’s result.

With the Supreme Court silent on Breckenridge’s dispute, it remains unknown what the justices’ reasoning would have been, and it adds no case law on a nationwide trend of litigation.

“I hate these types of affirmances, but that’s always the risk when you have an even number of justices deciding a case,” Myhre said. “It’s exceedingly disappointing. It’s even more disappointing if you were seeking a reversal and now you’ve lost without an explanation.”

—Doug Chartier

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