The U.S. District Court for the Northern District of Illinois has ruled that a 7% hotel tax imposed by Rosemont, Illinois, on room rental fees charged by online travel companies is a valid use tax and does not violate the Commerce Clause of the U.S. Constitution. The court found that the online travel companies were “owners” for the purposes of the local hotel tax ordinance because customers had to pay room charges to the companies before accessing their hotel rooms. The court held that the full rental fees paid by customers to online travel companies were taxable. Online travel companies charged Rosemont customers a room rental fee that included the amount the hotels charged the companies plus the companies’ markup on the hotel charges. The hotel tax ordinance intended to tax the amount that customers pay to occupy a hotel room in Rosemont. Customers of the online travel companies paid the companies’ full charges for the right to occupy hotel rooms there. The fact that online travel companies facilitated travel-related services was held to be incidental to the room rental. Illinois law states that a tax on a hotel room rental is a use tax. The court found that the hotel tax did not violate the Commerce Clause. The online travel companies had nexus in Illinois because the tax was levied to use a hotel room in Illinois, the tax was paid by the person who uses the room, and the travel companies contracted with Illinois hotels for the right to market, facilitate, and book reservations from which they profit. The tax was fairly apportioned because it is imposed on a use that can only happen in one place. Additionally, the tax doesn’t discriminate against interstate commerce since it is applied at the same rate to every hotel reservation in Rosemont. The tax is related to Illinois services because the renter has advantage of state services such as police and fire protection while staying in Illinois. (The Village of Rosemont v. Priceline.com, Inc., U.S. District Court, N.D. Illinois, No. 09 C 4438, October 14, 2011)