Hawaii Justices Take Up Booking.com’s Discriminatory Tax Case

Booking.com BV convinced the Hawaii Supreme Court to review whether the state’s $19.7 million tax bill on its online reservation services violates a federal law protecting electronic commerce.

The company asked the justices to overturn a state appeals court opinion dismissing its allegations that a Hawaii Department of Taxation rule violates the federal Internet Tax Freedom Act and the US Constitution’s commerce and supremacy clauses.

Congress passed ITFA to protect online commerce when the internet was in its infancy, but hasn’t amended the law since electronic businesses began dominating their analog counterparts. The scope of the law’s protections is also ...