An online travel company (OTC) was not liable for Philadelphia hotel tax on the difference between the room rates it contracted with hotels and the room rates (including fees) it charged its customers because the OTC is not considered an “operator.” The contracts between the OTC and hotels refer to the OTC’s right to facilitate reservations, not to rent rooms. Many of the contracts specifically state that nothing therein constitutes a sale or rental of rooms from the hotel to the OTC. The contracts also state that that hotel is simply making rooms available for booking, the hotel is the lessor, and that the hotel sets all rules and policies for a room rental. The hotels control access to the rooms. The taxable transaction occurs when a customer checks in at the hotel, not when the reservation is booked. The tax ordinance states that a “transaction” is the activity when consideration is paid to the operator. While the OTC charges customers when they book, it is the hotel that ultimately receives consideration for the room. The OTC is a conduit for the payment. The OTC cannot be construed as an operator because an operator receives consideration for, maintains custody of, and engages in transactions for rooms. As such, the OTC is not liable for Philadelphia hotel tax on the transactions. (Philadelphia v. Philadelphia Tax Review Board, Pennsylvania Commonwealth Court, No. 216 C.D. 2011, February 2, 2012)