The Maryland Court of Special Appeals has decided to let Montgomery County keep the $1.47 million in hotel taxes it collected from Lockheed Martin’s private “hotel” from 2009 to 2012.
Lockheed Martin operates the Center for Leadership Excellence, located at the company’s corporate headquarters in Bethesda, as a training center for its 100,000 employees. The employees are provided sleeping accomodations on the premises, but those accommodations are not made available to the public. The facility includes 183 guest rooms, a 250-seat amphitheater, training rooms, a restaurant and fitness center.
In 2013, the Maryland General Assembly passed legislation exempting from county hotel rental taxes accommodations that are operated solely in support of a corporate headquarters or conference facility, and that are available only to employees or other corporate guests, but not to the general public. (Apparently, only Lockheed’s facility benefit from the exemption, at least at the time.) The legislature amended out of the bill language which would have enabled a taxpayer like Lockheed Martin to claim a refund for hotel taxes it paid before the bill became law. Even with the amendment, a number of legislators voted against the bill – including a handful from Montgomery County.
Lockheed Martin originally brought its refund claim to Maryland Tax Court, which denied its refund request. But, when Martin sought judicial review in Montgomery Circuit Court, that court granted the refund. According to Bethesda Magazine, the judge:
concluded that a 2009 change to the county’s hotel tax law–to remove the phrase “public and private” from the definition of hotel–rendered the applicability of the tax to the CLE ambiguous.
The county appealed to the Court of Special Appeals – which ruled that the hotel tax had been accurately assessed, after all.
Lockheed Martin now has the opportunity to file for one last appeal to Maryland’s highest court, the Court of Appeals.