BENHAM, Justice.
Hotels.com et al. are online travel companies (OTCs) which book hotel rooms and make other travel arrangements for customers who access their services over the internet. The OTCs' business model, known as the "merchant model," is fully detailed in Expedia v. City of Columbus, 285 Ga. 684, 681 S.E.2d 122 (2009). In sum, the consumer pays the OTC a retail "room rate" and a line item for "taxes and fees" in order to reserve and later occupy one of the City's hotel rooms. The consumer pays nothing to the hotel for occupancy or taxes and only provides a credit card at check-in.
The City of Atlanta requires the payment of hotel occupancy taxes pursuant to OCGA
Under the merchant model, the OTCs calculate the hotel occupancy tax amount based on the wholesale rate the OTC negotiates with hotels for the right to broker rooms and not on the retail room rate the OTC charges the customer for the right to occupy a room. The OTC retains whatever it has collected from the consumer over the amount of the remittance to the hotel. If the hotel fails to submit an invoice or charge to the OTC in the time period designated by contract, then the OTC retains all monies collected from the customer, including any money purportedly collected for the payment of hotel occupancy taxes.
The City brought an action alleging that the retail room rate was the appropriate amount upon which to base the hotel occupancy tax and seeking injunctive relief, as well as back taxes from the OTCs. In its order granting in part and denying in part both parties' motions for summary judgment, the trial court made the following findings and conclusions:
1. The OTCs assert that the trial court erred when it determined that the "rent" for occupying a City hotel room is the room rate paid by the consumer rather than the negotiated wholesale rate between the OTC and the hotel. The interpretation of statutes and ordinances is a question of law, which we review de novo on appeal. Expedia v. City of Columbus, supra, 285 Ga. 684(4), 681 S.E.2d 122. The Enabling Statute provides for municipalities to impose an excise tax "at the applicable rate on the lodging charges actually collected." OCGA § 48-13-51(a)(1)(B)(i). Section 146-79 of the City's ordinance provides: "There is levied and assessed and there shall be paid a tax of seven percent of the rent for every occupancy of a guestroom in a hotel in the city," (emphasis supplied), and section 146-76 defines "rent" as "the consideration received for occupancy valued in money...." (Emphasis supplied.) Additionally, section 146-80 states: "Every person occupying a guestroom in a hotel in this city is liable for the tax levied in this article." (Emphasis supplied.) Under the statute and ordinance, the tax is on the consumer. The statute and ordinance do not tax any transaction between a non-occupant such as an OTC and the hotel.
2. The OTCs allege the trial court erred in issuing the injunctive relief described herein at paragraph (e), supra. We disagree. As we explained in Expedia v. City of Columbus, supra, 285 Ga. at 688(2), 681 S.E.2d 122, there is no governmental authority in the City, or in this State, that requires any OTC to collect hotel occupancy taxes. Rather the OTCs are following their business model when they collect money for the payment of hotel occupancy taxes from consumers who wish to occupy the City's hotel rooms.
Each provision of the trial court's injunction is qualified with the phrase "so long as the OTCs collect hotel occupancy taxes and/or all applicable taxes from their customers," recognizing for "so long as" the OTCs voluntarily collect taxes from consumers seeking to occupy rooms in the City's hotels, taxes must be collected and remitted based on the room rate paid by the consumer for occupancy.
In addition, the OTCs' argument concerning whether the City is or is not a third-party beneficiary of their contracts with hotels is inapposite. The City does have an interest in regard to the OTCs' transactions as third-party tax collectors. If the OTCs were to cease acting as third-party tax collectors, the injunction would be moot; however, if the OTCs continue collecting hotel occupancy taxes from consumers occupying City hotel rooms, the OTCs shall collect and remit those tax monies lawfully, i.e., based on the room rate charged to the consumers for occupancy. The trial court did not err in issuing its injunctive order.
3. The OTCs argue that the trial court erred when it voided those portions of their contracts which provided that hotel occupancy taxes would be collected and remitted based on the negotiated wholesale rate. "A contract to do an immoral or illegal thing is void. If a contract is severable, however, the part of the contract which is legal will not be invalidated by the part of the contract which is illegal." OCGA § 13-8-1. The statute gives Georgia courts authority to void contracts and/or portions thereof. In this case, pretermitting whether any portions of the OTCs' contracts with the City's hotels are void, contractual terms which call for the under remission of hotel occupancy taxes would be unenforceable. Since we have ruled that the City's ordinance requires the collection and remission of taxes based on the room rate paid by the consumer, it would be unlawful for any entities collecting hotel occupancy taxes in the City to do so in a manner that is inconsistent with this opinion.
In this case, the trial court was not called upon to decide whether the various contracts were enforceable, and so reaching a determination that the contracts were void was improper. However, because the injunction provides for the proper collection and remittance of the City's hotel occupancy taxes should the OTCs elect to continue to act as third-party tax collectors, the error is effectively moot and provides no basis for reversal.
4. The City contends that the trial court erred when it held that the City did not have a remedy for back taxes. The trial court's order found that (1) the City did not have a remedy under the Enabling Statute or its hotel occupancy tax ordinance because the OTCs were not innkeepers or hotel operators; and that (2) the City did not show it had a remedy under the claims asserted— unjust enrichment and money had and received (along with collateral issues of imposing a constructive trust and an equitable accounting.)
In order to sustain an action for money had and received, a party must show, in addition to showing that an entity has received money justly belonging to another, that it made a demand for payment and was refused. Fernandez v. WebSingularity, Inc., 299 Ga.App. 11(2), 681 S.E.2d 717 (2009). The City concedes that it did not make any demand for payment, but rather made a request for information. Pursuant to these facts, it was not error for the trial court to grant summary judgment to the OTCs on the claim for money had and received. Likewise,
Judgment affirmed.
All the Justices concur.