Articles Posted in Tax Law

by
At issue in this case was the meaning of the term “motor fuel taxes” as used in the Georgia Constitution, Article III, Sec. IX, Par. IV(b). A trucking industry association and three individual motor carriers challenged local sales and use taxes on motor fuels, the revenues of which were not used solely for public roads and bridges. They argued that these taxes fell within the meaning of “motor fuel taxes” under the Motor Fuel Provision and, therefore, the revenues from these taxes (or an amount equal to that revenue) had to be allocated to the maintenance and construction of public roads and bridges. The Georgia Supreme Court affirmed the dismissal of the plaintiffs’ complaint because the history and context of the Motor Fuel Provision revealed that “motor fuel taxes” were limited to per-gallon taxes on distributors of motor fuel, and did not include sales and use taxes imposed on retail sales of motor fuels. View "Georgia Motor Trucking Assn. v. Georgia Dept. of Rev." on Justia Law

by
Appellee M7VEN Supportive Housing and Development Group (“M7”) failed to pay taxes on two properties in Carroll County, and, consequently, the Tax Commissioner conducted a tax sale. The properties were purchased by Appellant DLT List, LLC (“DLT”), for a total of $110,000, and the tax sale resulted in excess funds of approximately $105,000. The Commissioner notified M7, DLT, and others of excess funds, and, M7 filed a certificate of authorization seeking to receive the excess funds. Though there were no other claims made on the funds, the Commissioner did not release the funds. Appellee Design Acquisition, LLC, as a lienholder against M7, redeemed the properties from DLT, and DLT issued quitclaim deeds of redemption to M7. Design Acquisition filed a declaratory judgment action claiming entitlement to the excess funds, and the Commissioner filed an equitable interpleader action for the purpose of distributing the excess funds. The two actions were consolidated. The trial court determined that, because M7 was the only entity to have made a claim for the excess funds or to have had a recorded interest in the properties at the time of the tax sale, the Commissioner should have timely released the excess funds to M7. DLT and Design Acquisition appealed, arguing that Design Acquisition had first priority to the excess funds as the redeeming creditor. The Court of Appeals overruled the controlling case law in this matter, applied OCGA 48-4-5 (a) to the question of excess funds and determined that Design Acquisition had no claim to the excess funds because it was not a lienholder at the time of the tax sale. The Georgia Supreme Court granted certiorari to consider whether a redeeming creditor after a tax sale has a first priority claim on excess tax-sale funds. Though the Court disagreed with the rationale employed by the Court of Appeals, the Supreme Court nevertheless affirmed its decision. View "DLT List, LLC v. M7VEN Supportive Housing & Development Group" on Justia Law

by
This was the third appeal of this case arising from the efforts of appellee Southern LNG, Inc. (“Southern”) to compel State Revenue Commissioner Lynnette Riley (“the Commissioner”) to recognize Southern as a “public utility” under OCGA 48-5-511 and to accept Southern’s ad valorem property tax returns. On remand, the trial court granted summary judgment to the Commissioner on a mandamus claim, holding that Southern had an adequate alternative remedy. In a prior appeal, the Supreme Court laid out for the parties in considerable detail the potential legal and procedural issues bearing on the question of whether the Commissioner could become a party or be bound by a judgment rendered in the tax appeals. On remand, Southern and the Commissioner filed renewed cross-motions for summary judgment. The trial court granted summary judgment in favor of Southern, holding that it had no “equally convenient, complete and beneficial” remedy other than mandamus, and denied the Commissioner’s motion for summary judgment, and directed the Commissioner “to accept [Southern’s] ad valorem property tax returns pursuant to OCGA 48-5-511(a) instanter.” The Commissioner appealed, and the Supreme Court this time reversed, finding Southern did not show the Commissioner, in refusing to accept Southern’s ad valorem tax returns, violated a “clear legal duty,” that she failed to act, or that her actions were arbitrary, capricious and unreasonable, amounting to a gross abuse of discretion, so as to entitle Southern to a writ of mandamus. View "Riley v. Southern LNG, Inc." on Justia Law

by
The owners of residential properties in Lowndes County appealed a final superior court order that declared OCGA 48-5-2(3) (B.1), which excluded low-income housing income tax credits from consideration for the purpose of assessing ad valorem tax, was unconstitutional for violating the taxation uniformity provision of the Georgia Constitution. The properties at issue were eligible to receive federal and state low-income housing income tax credits. In exchange for receiving a ten-year award of tax credits, the property owners agreed to lease their rental units to eligible low-income tenants at below-market rents set by the state Department of Community Affairs (GDCA) for thirty years or more. During the credit period, the owner may not sell, transfer, or exchange the property without first requesting GDCA’s approval of the proposed sale, transfer, or exchange. After being awarded state and federal income tax credits by the GDCA, the property owners in this case “sold” the tax credits to investors in that they allowed investors to purchase limited partnership interests. The tax credits would “flow through” the partnerships to the limited partners, who would then use the tax credits to reduce their individual income tax liabilities. The Lowdnes County Board of Tax Assessors filed for a declaration as to the constitutionality of OCGA 48-5-2 (3) (B.1), which precluded the Assessors from considering the tax credits in determining the fair market value of the real property at issue. After review of the trial court's judgment, the Supreme Court affirmed: "inasmuch as OCGA 48-5-2 (3) (B.1) exempts these income tax credits from consideration in determining the fair market value of the properties at issue, the statute grants preferential treatment for ad valorem taxation purposes and creates a subclass of tangible property other than as permitted by the State Constitution." View "Heron Lake II Apartments, L.P. v. Lowndes Cty Bd. of Tax Assessors" on Justia Law

by
In 2009, John Sherman, a resident and taxpayer of Fulton County, filed suit, on behalf of himself and all others similarly situated, against the Fulton County Board of Assessors (“FCBOA”), along with its Chief Appraiser and each of its members in their official capacities, to challenge the FCBOA’s method of valuing leasehold estates arising from a sale-leaseback bond transaction involving the Development Authority of Fulton County (“DAFC”). Sherman claimed that this so-called “50% ramp-up” methodology results in the valuation of the developers’ leasehold estates at less than fair market value, in violation of defendants’ statutory and constitutional duties to ensure that ad valorem taxes are assessed uniformly and at fair market value. In October 2009, the trial court granted the defendants’ motion to dismiss/motion for judgment on the pleadings, and, on appeal, the Georgia Supreme Court reversed, holding that the case was not subject to dismissal because, while there was no dispute as to the valuation methodology employed, there was no way to conclusively determine at that stage of the proceedings that such methodology actually resulted in a fair valuation of the leasehold estate. After remand, SJN Properties, LLC was added as a plaintiff in the action. The plaintiffs filed an amended and restated class action petition, again seeking declaratory, injunctive, and mandamus relief with respect to the valuation methodology, and adding a claim seeking declaratory, injunctive, and mandamus relief with respect to a subset of DAFC-owned properties involved in these bond transactions, which, according to the plaintiffs, have improperly been treated as tax-exempt. Thereafter, the parties filed cross-motions for summary judgment, and the trial court granted the defendants’ motions. Though the Supreme Court found the trial court erred i striking two of SJN's affidavits, it nonetheless affirmed the grant of summary judgment in favor of defendants. View "SJN PROPERTIES, LLC. v. FULTON COUNTY BOARD OF ASSESSORS et al" on Justia Law

Posted in: Tax Law

by
The issue this appeal presented for the Supreme Court's review centered on a superior court's validation of roughly $200 million in municipal bonds (the "2014 NSP Bonds") that were to be issued by the Atlanta Development Authority d/b/a Invest Atlanta ("Invest Atlanta"). Invest Atlanta and the Geo. L. Smith II Georgia World Congress Center Authority (collectively, the "New Stadium Entities") proposed to have the 2014 NSP Bonds issued for the purpose of funding a portion of the cost of developing, constructing, and operating a new stadium facility in downtown Atlanta for the Atlanta Falcons professional football team. Additional funding for the NSP would have been provided by the Atlanta Falcons Stadium Company, LLC ("StadCo"), a company associated with the Atlanta Falcons Football Club, LLC, as well as through the sale of personal seat licenses. On February 4, 2014, the State filed a Petition for Bond Validation in the superior court to authorize the issuance of the 2014 NSP Bonds. Several individuals moved to intervene in the proceedings to file objections to the bond validation, and the trial court allowed them to do so. Among other things, the intervenors contended that OCGA 48-13-51 (a) (5) (B) was an unconstitutional special law. The trial court ultimately entered a Validation Order and Final Judgment validating the 2014 NSP Bonds and overruling all objections. One of the intervenors appealed that ruling. However, finding no reversible error in the trial court's judgment, the Supreme Court affirmed. View "Cottrell v. Atlanta Dev. Authority" on Justia Law

by
Plaintiffs James Hansen and 30 other DeKalb County residents sought to obtain certain information from the DeKalb County Board of Tax Assessors in connection with their 2012 property tax assessments. The trial court denied Plaintiffs’ request for a mandamus nisi, and they appealed. Plaintiffs filed their requests for information each seeking information regarding the appraisal and assessment of his or her property for the 2012 tax year. The trial court found that plaintiffs' claims were not cognizable under the Georgia Open Records Act or in mandamus. The Supreme Court found no error in that decision, and affirmed. View "Hansen v. Dekalb Cty. Bd. of Tax Assessors" on Justia Law

by
Landowners appealed the Superior Court of Monroe County's denial and dismissal of their petition for a writ of mandamus and related adverse rulings involving their real property tax appeals. Finding no reversible error, the Supreme Court affirmed the Superior Court. View "Newton Timber Co., L.L.L.P. v. Monroe County Bd. of Tax Assessors" on Justia Law

by
On remand, the trial court granted summary judgment to the Georgia Revenue Commissioner on Southern LNG, Inc.'s request for the writ of mandamus, on the ground that Southern had an adequate alternative remedy in the form of tax appeals brought under OCGA 48-5-311. The court said that Southern could raise, and had raised, its statutory claim that it was a public utility required to return its property to the Commissioner rather than to Chatham County in appeals of the county’s tax assessments to the county board of equalization and then to the Chatham County Superior Court. Upon second review of this case, the Supreme Court concluded the trial court's analysis was incomplete: "the Chatham County tax appeals, as currently constituted, appear not to provide Southern with an adequate alternative to mandamus. . . . The parties have not briefed [their] issues here or below; the trial court did not address them; and this Court should not try to resolve them in the first instance." Accordingly, the Court vacated the trial court's grant of summary judgment to the Commissioner and remanded the case for further proceedings. View "Southern LNG, Inc. v. MacGinnitie" on Justia Law

by
The issue on appeal before the Supreme Court was whether the appellate court in "Georgia Dept. of Revenue v. Moore," (730 SE2d 671 (2012)) correctly determined that, once the Georgia Department of Revenue settles a refund action with one responsible party against whom unpaid sales taxes were assessed, the Department was thereafter precluded by the voluntary payment doctrine from attempting collection of any amount still owing from a second responsible party. The Supreme Court found that the Court of Appeals' reasoning in that case was incorrect, and therefore the Court remanded the case for further consideration. View "Georgia Dept. of Revenue v. Moore" on Justia Law