Second shoe drops in hotel tax lawsuit
by Diane Wagner, staff writer
Jul 10, 2012 | 2378 views | 0 0 comments | 6 6 recommendations | email to a friend | print
Online travel companies are not going to have to pay more back taxes to Georgia cities and counties, the Rome City Commission heard Monday.

City Attorney Andy Davis told the board a ruling issued by U.S. District Court Judge Harold L. Murphy maintains the cutoff date at May 16, 2011. The decision was based on language in an Atlanta case decided by the Georgia Supreme Court.

“We’re studying it to see if there are grounds for appeal, but we do have (the original) settlement and that will go forward,” Davis said.

Rome, Cartersville and Hart County filed suit in 2005, claiming online travel companies such as Hotels.com and Expedia should be paying hotel-motel tax on the retail rate they charge their customers instead of the wholesale rate they pay for the rooms.

Murphy granted class action status in 2011 to all local governments in the state that levy hotel-motel taxes. In March 2012 he ruled the companies owe tax on the retail rate from May 16, 2011, onward.

The governments — represented by Rome law firm Brinson, Askew, Berry, Richardson, Siegler and Davis — continued to seek back taxes for rooms rented since the lawsuit was first filed. Murphy rejected that claim in a 150-page ruling issued Monday.

Davis said cities and counties are still submitting documentation, so it remains unclear exactly how much money is involved in the settlement.

Also on Monday, David Doss of Samson Developers told Commissioners his company is trying to bring a Hilton Garden Inn to the city-owned West Third Street property between Barron Stadium and the Oostanaula River.

“Our target date to submit to them is this Friday,” Doss said during a discussion of the project at the board’s pre-meeting caucus.

Doss’ original proposal was for a Marriott Courtyard, but he said Marriott felt their Fairfield Inn model was a better fit for Rome. That would not have met the city’s demands for a full-service hotel with 105 to 120 rooms.

The board signed off Monday on a binding memorandum of understanding that gives Samson 120 days to close the deal and pay $400,000 for 2.2 acres of the property.

City Manager John Bennett said the agreement with Samson automatically ends if the deadline is not met, or if the company does not start construction within 180 days of the purchase.

“We give them their money back, less expenses, and we start over,” he said.

Doss cautioned that the project hinges on available financing, but said owner-operator Duke Hospitality has a proven track record and is in talks with two interested banks.

If the deal goes forward, Samson would get an 18-month option on the remaining 2.2 acres for $1.4 million. Phase II would be condominiums and retail space.
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