60 Ga. App. 482 | Ga. Ct. App. | 1939
Lead Opinion
The facts, the questions of law, and the decisions of the questions have been stated in former reports of this case. State Revenue Commission v. Edgar Bros. Co., 185 Ga. 216 (194 S. E. 505); 55 Ga. App. 505 (190 S. E. 623). It is unnecessary to state them fully and in detail again. The case arose by the levy of an execution on property of the defendant in error, for an amount alleged to be due by it to the State of Georgia as in
The amendment alleged that in the notice of deficiency sent by the revenue commission to Edgar Brothers Company, the income which was claimed to be subject to apportionment was $225,-010.41, the same as the net income shown by the taxpayer’s return to the Federal Government, except $1712.75 which represented net income allocated to Georgia and was supposed to be rents from property located in Georgia. The amendment further alleged that said net business income included interest on various securities owned by the taxpayer and deposited in its vaults in New Jersey, such income being in no way connected with its business in Georgia, and being beyond the jurisdiction of the State, and “the attempt to tax said income would deprive the taxpayer of its property without due process of law and deny to it the equal protection of the law guaranteed to it by the fourteenth amendment of the constitution of the United States, as well as by paragraphs 2 and 3 of section 1 of article 1 of the constitution of this State.” The amendment further alleged, that included in the item of $1712.75 net income allocated to Georgia by the State Revenue Commission is $240 rent on property belonging to the taxpayer located in New
The plaintiff objected to the allowance of the amendment, because “the matters alleged therein did not, either when taken alone or in connection with the original affidavit of illegality, set out any defense or disclose any reason why the fi. fa. levied was proceeding illegally,” and because “the facts therein alleged were insufficient to disclose a legal defense to the claim for taxes as included in the execution levied, and were insufficient to show that said fi. fa. was proceeding illegally.” The objection was overruled, and exception was taken. This amendment may be viewed in a twofold aspect, either as an attack on the constitutionality of the income-tax act of 1929, or as an offer to show certain mistakes by the revenue commission in its computation of the amount due, because of including several items of income which were not taxable. The first view can not now be entertained. The bill of exceptions in this case was originally transmitted to the Supreme Court, the plaintiff in error alleging that there was involved the question whether “a statute of the State of Georgia has been applied or is sought to be enforced by the State taxing authorities in a manner contrary to the provisions of the constitution of the State of Georgia and of the constitution of the United States, and accordingly
The Supreme Court held that the act of 1929 imposed an income tax on foreign corporations doing business in Georgia, based upon their entire net income “but apportioned to that part of such income as is attributable to business done in this State.” 185 Ga. 216 (194 S. E. 505). This ruling evidently excludes income Avhich is not attributable to business done in Georgia. The evidence showed that in the original computation on which the fi. fa. was based there were included three items of income, rent from property located in New Jersey, $240, interest on securities located in New Jersey, $2562.78, and profits from a clay mine located in New Jersey, $13,665.69. These items are not “attributable to business done in this State,” and should have been deducted from the entire net income of the corporation as shown in its Federal income-tax return, leaving the balance to be apportioned. It is true that the fi. fa. Avas for $1084.43, and a calculation on the same basis of apportionment with the objectionable items excluded showed the tax to be $1050.58. Counsel for defendant in error contend that the court is without power to assess the property (in this case the income) in an illegality proceeding on a tax fi. fa. This contention is directly at variance with the decision in State v. Southwestern Railroad, 70 Ga. 12 (5), where it was held that the jury could reassess the property. In the present case the judge Avas acting also as jury, and had the porver to determine the amount of the income which was taxable and the amount of tax due.
The remaining question relates to the method of apportionment
At the end of the Supreme Court’s opinion this statement occurs: “Whether the method used by the commission was unreasonable was a question not determined either by the trial court or the Court of Appeals, and the assignments of error to this court do not raise such a question, even if it could be raised. That question must be determined upon a re-examination of the ease under the decision herein rendered.” 185 Ga. 216, 233, 234 (194 S. E. 505). From this it seems that the only question left to be determined by the trial court on the new trial was whether the method used by the revenue commission was unreasonable. The Supreme Court held that on the failure of the taxpayer to make a return showing the proportionate part of income attributable to business in this State, the revenue commission is authorized, under the act of 1929, to make such apportionment from the best information obtainable. It is in evidence that Mr. Mitchell, acting for the revenue commission, went to the company’s office in New York City and obtained a lot of information from the company. Acting on this information the revenue commission apportioned the income in accordance with the formula prescribed in the act of 1931 (Ga. L. Ex. Sess., 1931, pp. 24, 36, § 15(c)), and an execution was issued
Two other exceptions are without merit. The affidavit of Mr. Stewart, showing items of income not attributable to business done in Georgia, was admissible in support of the amendment. The income-tax return made to the Federal government by the defendant in error was admissible in evidence. It was the basis from which the State tax was computed. The bill of exceptions alleges that the court made no specific ruling on the objections to these pieces of evidence. The court will be considered as having admitted them. Numerous income-tax cases decided by foreign courts have been cited in the briefs of counsel for both parties. These decisions do not require discussion, in view of the rulings by the Supreme Court which have become the law of this ease. The
Judgment reversed.
Concurrence Opinion
concurring specially. I am of the opinion that the amendment to the affidavit of illegality should have been disallowed for the reason that it failed to allege facts sufficient to show that the formula applied was arbitrary and unreasonable.