Financial, Legal and Tax

The Battle... New Software will track if you pay lodging tax

Eye Street Solutions LLC ("Eye Street")  and HomeAway are battling it out in court!!! http://www.ca4.uscourts.gov/Opinions/Published/121143.P.pdf "Rather than book hotel rooms, many travelers now rent private residences for accommodation during their vacations. Appellee HomeAway, Inc. owns and operates a number of websites that facilitate such rentals. The websites, including HomeAway.com and VRBO.com, post rental advertisements by homeowners, whom prospective renters can then contact directly to make reservations."

"Many localities have found that these vacation rentals deprive them of significant lodging tax revenue. Whereas hotels almost always pay the taxes that localities assess on room rentals, private homeowners frequently fail to do so, whether out of ignorance of the law or purposeful evasion.

To combat such delinquency, some localities have turned to companies like appellant Eye Street Solutions LLC ("Eye Street"), which has developed computer software designed to identify homeowners who neglect to pay taxes when they rent out their homes.

Eye Street claims the software as a trade secret, and the parties dispute exactly how it works, but in general, it uses various data to identify the owners of properties advertised on websites like HomeAway’s and then determines whether the owners have paid the requisite local rental taxes. Eye Street has licensed its software to appellant VRCompliance LLC, which, in turn, uses the software to conduct tax-compliance investigations on behalf of localities, including those belonging to the Colorado Association of Ski Towns ("CAST")."