Hyatt Calls $296 Million Loyalty Program Not Income (Correct)

Payments to Hyatt Hotels Corp. by franchisees who own its hotels to fund its customer rewards program should not be treated as income, the company told the Seventh Circuit.

Hyatt is contesting the US Tax Court’s determination that the $296.5 million in payments the franchisees made for its Gold Passport Program should be included in the corporate chain’s income for 2009 to 2011.

In its opening brief before the US Court of Appeals for the Seventh Circuit, the hotel chain said it should be able to offset those payments by the estimated future costs it will incur when customers to ...