Articles Posted in Supreme Court of Georgia

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In May 2007, the Medical Center Hospital Authority (“Hospital Authority”) filed an action against the Columbus Board of Tax Assessors and related parties (together, “the Tax Board”) in which it sought a declaration that its leasehold interest in a building located on real property owned by a private entity constituted public property exempt from ad valorem taxation under OCGA 48-5-41 (a) (1). The superior court granted summary judgment to the Hospital Authority, finding that the Hospital Authority’s leasehold interest qualified as “public property,” and was thus exempt from ad valorem property taxation. The Tax Board appealed this decision to the Court of Appeals, which affirmed the trial court’s grant of summary judgment. The Georgia Supreme Court granted certiorari to decide whether the Court of Appeals erred in determining that two prior bond validation orders conclusively determined, for purposes of OCGA 48-5-41 (a) (1) (A), that the property at issue was “public property” exempt from ad valorem taxation. The Court held that these orders did not conclusively establish that the Hospital Authority’s leasehold interest was “public property” exempt from ad valorem taxes and therefore reversed the Court of Appeals and remanded this case for further proceedings. View "Columbus Board of Tax Assessors v. Medical Center Hospital Authority" on Justia Law

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Clayton County appealed the trial court’s order denying its motion for judgment on the pleadings and granting the motion for partial summary judgment filed by the City ofCollege Park. This dispute arose over the taxation of alcoholic beverages at Hartsfield-Jackson Atlanta International Airport. Of the many businesses located within the Airport, some are located in the unincorporated sections of the County while other businesses are located in the County within the incorporated limits of the City of College Park (the “City”). In its complaint, the City contended that since the 1983 enactment of OCGA section 3-8-1 (regulation and taxation of alcoholic beverages at public airports), it has not been receiving the proper amount of alcoholic beverage taxes to which it was entitled, and that the County improperly infringed on its authority to tax by instructing vendors to remit to the County 50% of the taxes due from the sale of alcohol in those portions of the Airport located within the City limits. The City and County disagree on the interpretation of OCGA 3-8-1(e). In seeking a judgment on the pleadings, Clayton County asserted, among other things, that the City of College Park’s claims were barred by sovereign immunity. The matter of sovereign immunity was not briefed by the parties, and the trial court did not consider it. To permit a more thorough consideration of this question, the Mississippi Supreme Court remanded for the trial court to address it, with the benefit of full briefing. View "Clayton County v. City of College Park" on Justia Law

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Consolidated appeals arose out of a complaint filed by four Georgia taxpayers in which they challenged the constitutionality of Georgia’s Qualified Education Tax Credit, Ga. L. 2008, p. 1108, as amended (“HB 1133” or the “Bill”). HB 1133 set up a tax credit program that allows individuals and businesses to receive a Georgia income tax credit for donations made to approved not-for-profit student scholarship organizations (“SSOs”). The Bill created a new tax credit statute for that purpose. Generally speaking, the SSO is required to distribute the donated funds as scholarships or tuition grants for the benefit of students who meet certain eligibility requirements, and the parent or guardian of each recipient must endorse the award to the accredited private school of the parents’ choice for deposit into the school’s account. Plaintiffs alleged: (1) the Program was educational assistance program, and the scheme of the Program violated the Constitution; (2) the Program provided unconstitutional gratuities to students who receive scholarship funds under the Program by allowing tax revenue to be directed to private school students without recompense, and also that the tax credits authorized by HB 1133 resulted in unauthorized state expenditures for gratuities; (3) the Program took money from the state treasury in the form of dollar-for-dollar tax credits that would otherwise be paid to the State in taxes, and since a significant portion of the scholarships awarded by the SSOs goes to religious-based schools, the Program takes funds from the State treasury to aid religious schools in violation of the Establishment Clause; and (4) the Department of Revenue violated the statute that authorized tax credits for contributions to SSOs by granting tax credits to taxpayers who have designated that their contribution is to be awarded to the benefit of a particular individual, and by failing to revoke the status of SSOs that have represented to taxpayers that their contribution will fund a scholarship that may be directed to a particular individual. Plaintiffs sought mandamus relief to compel the Commissioner of Revenue to revoke the status of SSOs, and injunctive relief against the defendants to require them to comply with the constitutional provisions and statutory laws set forth in the complaint. In addition to mandamus relief and injunctive relief, plaintiffs sought a declaratory judgment that the Program was unconstitutional. The Georgia Supreme Court found no error in the trial court’s finding plaintiffs lacked standing to pursue their constitutional claims, or their prayer for declaratory relief with respect to those claims, either by virtue of their status as taxpayers or by operation of OCGA 9-6-24. Consequently plaintiffs failed to allege any clear legal right to mandamus relief. View "Gaddy v. Georgia Dept. of Revenue" on Justia Law

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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

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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

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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

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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