Have Holcomb, Will Travel

In 2008, 17 Florida counties banded together to sue four online travel companies—Expedia, Orbitz, Travelocity and Priceline—over the booking fees they charge to facilitate hotel reservations. The counties wanted to start collecting Florida’s so-called “bed tax” on these fees; the online companies said the tax should apply only to the room rate.

Tax attorney Mark Holcomb, who represented the companies, was struck by something he’d never seen before in a tax case. “By and large, we were going up against plaintiff’s personal injury lawyers who were hired by the counties,” Holcomb says. “That was unique in my experience.”

This, Holcomb believes, resulted in a more aggressive, emotionally charged approach.

It was the kind of challenge he relishes. Some people might get a little uneasy hearing the words “taxes” and “creativity” together, but for Holcomb, 56, that’s exactly what appealed to him 32 years ago when he chose to focus on state and local tax law. 

Born in Coral Gables, Holcomb moved to Tallahassee to attend Florida State University College of Law, and stayed there after graduating in 1985. He found himself attracted to state and local tax law: “It brought great clients to work with; it was suited to my skills—it requires attention to detail and analytical skills—but mostly it seemed to be a more creative aspect of tax law, which I enjoyed.” 

Whereas federal tax spells everything out in codes and regulations, he explains, “state laws require filling in a lot of gray areas.” 

He has represented clients across the spectrum: corporate income and franchise, sales and use, communication services, insurance premium, ad valorem. You name it. In 1998, he represented Newsweek against the Florida Department of Revenue. The news magazine was seeking a sales tax refund. Newspapers were exempt; magazines were not. Newsweek lost in the lower courts but prevailed at the U.S. Supreme Court. “It was so clear to the court,” Holcomb says, “that they summarily reversed the decision and remanded it back to the state court to grant us relief.”

The online travel company case, Alachua County, et al. vs. Expedia, Inc., et al., pitted the quartet of online travel companies against Florida counties with differing notions about how aggressively to pursue the travel booking agencies over refusing to pay taxes on their booking fees—which, according to a 2010 estimate by The Center on Budget and Policy Priorities, a Washington, D.C., think tank, were costing Florida $31 million to $45 million per year in potential tax revenue. 

“Some of the counties took more aggressive positions than others,” he says. “Some counties just sought a declaratory judgment from the court as to whether or not these taxes were owed. But others wanted to assess not only tax penalties and interest, but also make claims for civil theft.”  

Holcomb demurs that generally, in tax litigation, “there’s no high drama that occurs in these cases.” But when Judge Jim Shelfer began announcing his decision from the Leon County Circuit Court bench, Holcomb felt his heart drop.

“The judge starts explaining all the reasons why the county should win and the OTCs should lose. Then, suddenly, he stops and invokes Johnnie Cochran. He says, ‘But if it don’t fit, you must acquit, I guess,’ and that if the tax doesn’t clearly apply to the OTCs, then they have to win.” Adds Holcomb, “It was such a stunning reversal from the direction we thought he was going in, it took all the lawyers there aback.” 

In 2015, the case made its way to the Florida Supreme Court, where Holcomb’s team prevailed.  That ruling, Holcomb notes, has ramifications for other businesses in the so-called “sharing” economy, like Airbnb. 

“I think it sets precedent,” he says.

5 Things Holcomb Doesn’t Find Taxing

> Hanging out with his three grown children

> Antiquing with his wife, First District Court of Appeal Judge Susan Kelsey

> Driving in his 1946 Chevy pickup

> Hiking and kayaking 

> Traveling—mostly to national parks out West (and yes, he does sometimes book online)