Booking.com Seems to Persuade Hawaii Justices to Revive Tax Case

The Hawaii Supreme Court appeared open Tuesday to Booking.com BV’s right to challenge validity of a tax rule before the state assessed $19.7 million in use taxes on its services.

The company wants the justices to overturn a state appeals court opinion dismissing its allegations that a Hawaii Department of Taxation rule singling out online travel bookings violates the federal Internet Tax Freedom Act and the US Constitution. The appeals court held it lacked jurisdiction over the lawsuit because Booking’s facial challenge to the rule would interfere with the state’s collection of taxes.

The lack of pre-assessment judicial review of ...