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”).”

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