The Georgia Court of Appeals sealed dozens of depositions taken in a City of Atlanta case filed against several Web-based travel sites.

As Rome and other cities are embroiled in a similar lawsuit in federal court, they are interested in the evidence and what it may reveal.

Rome’s lawsuit, filed in November 2005, claims the companies do not pay the proper amount of taxes to the cities and counties where they sell hotel room rentals.

Click here to see Rome’s original filing in the case.

During the initial Fulton County case, a protective order was issued sealing 35 depositions. When the case was dismissed, Atlanta appealed and another protective order was successfully obtained by the Web businesses, who argue that the documents contain proprietary information.

“We are going to ask that they open them up, at least those that do not need to be sealed,” said Rome attorney Bob Brinson, who is representing the city.

Under the companies’ business practices, they buy room rentals from hotels at a discounted rate and then mark them up for resale to customers, according to the lawsuit.

Customers pay the Web site operators a tax based on the full rental price, but the online travel sites remit taxes based on the discount rate paid to the local hotel — and pocket the difference, the lawsuit states.

In Rome, hotels must pay a 6 percent excise tax in addition to the standard 6 percent sales tax.

This case is currently on hold, partly because plaintiffs are having difficulty determining economic losses and must present a figure to the court.

Defense attorneys have denied that the online reservation firms owe any additional taxes. They have claimed the companies are not subject to paying the tax on room reservations they broker at the markup price because they are not, in fact, hotels.

It is not just the litigants who have expressed an interest in the closed records. The Rome News-Tribune has filed an open records request with the city of Atlanta asking to see the filings.

“I think it’s fair to say the case has caught the attention of the Georgia First Amendment Foundation, said Executive Director Hollie Manheimer.

The foundation is considering filing an amicus brief, which lets the court know it has an interest in the case. The Georgia Municipal Association filed a brief July 13.

“We will monitor the case and make a decision within the next week,” Manheimer said.

Reprinted with permission from the Rome News-Tribune, 08/17/07.