42 Ga. App. 812 | Ga. Ct. App. | 1931
Southwestern Eailroad Company, protesting, paid to E. C. Norman, State tax-commissioner, the sum of $180.30 demanded by the commissioner as a tax for the last quarter of the year 1929, under the act of August 29, 1929, known as the gross-receipts-tax act (Ga. L. 1929, p. 103), and the present suit was brought by the railroad company, under section 17 of this act, to recover the amount paid. The general demurrer of the tax-commissioner was overruled, and he excepted. The question for decision is whether the railroad company was doing business within
The record shows that the plaintiff was taxed as a steam railroad, under section 5, although it was not operating a railroad, having leased its property to another company, and counsel for the commissioner contend in their brief that if, on this account, the plaintiff is not subject to be taxed as a railroad as provided in section 5, it would nevertheless fall within the blanket provisions of section 7 and be liable for the lesser rate as stated in that section. The gross receipts of the company for the period in question amounted to $67,600.34, and were derived in part from rentals for its railroad and properties which it had leased to the Central of Georgia Eailway Company, and in part from dividends and interest on stocks and bonds in which the rentals from the lease had been invested from time to time. These securities amounted to $231,099.52 par value. The plaintiff was incorporated for the purpose of conducting the business of a railroad (Ga. L. 1845, p. 132-; Ga. L. 1856, p. 429); but its lease to Central of Georgia Railway Company was authorized by the State through special enactment, together with general laws. Ga. L. 1851-2, p. 119; Ga. L. 1892, p. 49, Civil Code (1910), §§ 2586, 2591; Georgia R. Co. v. Haas, 127 Ga. 187 (6, 7) (56 S. E. 313, 119 Am. St. R. 327, 9 Ann. Cas. 677). The present lease was executed in 1895, and was for the term of 101 years, renewable in like periods forever, the right to renewals to be in conformity with law and to continue through the period of the corporate existence of the lessee. The lease calls for payment of an annual rental amounting to $259,555, which is the
But the act under consideration supplies its own definition, and this is controlling. “The term ‘business’ as used in this act shall include all activities engaged in or caused to be engaged in with
While we have said that the definition contained in the act will determine the present case, it is substantially the same as that enunciated or adopted by the courts, especially the Supreme Court of the United States, and the decisions may therefore be of assistance in the solution of the question sub judice. In Flint v. Stone Tracy Co., supra, it is said that “business” is a very comprehensive term and embraces everything about which a person can be employed; “that which occupies the time, attention, and labor of men for the purpose of a livelihood or profit.” The statute refers to “activities,55 and the idea connoted by this term must not be overlooked.
The facts of the instant case, when reduced to their last analysis, are that the plaintiff company, with the consent of the State, has leased the sum of its railroad properties to another company, and is engaged only in doing those things necessary to maintain its corporate existence and to receive and distribute to its shareholders
There are other decisions to the same effect, both by the Federal Supreme Court and by other courts, but a discussion of them would unreasonably prolong this opinion. It is generally held that a corporation is not engaged in business and thus subject to a business tax where it has leased and turned over to another person or corporation the exclusive use of its property and the conduct of the only business for which its property was acquired or adapted. It may act, like a natural person, as the proprietor of property and receive income therefrom and reinvest such income without being considered as engaged in business within the meaning of the excise-tax laws. The expression “engaged in business” is one in common use. “It has the same meaning whether applied to a corporation or to a natural person. It is not apt or appropriate to describe one who has retired from business in which he had engaged and confines his activities to maintaining property let to another and used exclusively by the lessee in carrying on that business.” Jasper & Eastern R. Co. v. Walker, 238 Fed. 533, 537. See, in this eonnec
But almost the identical question here presented has been decided by our own Supreme Court in the case of Harrison v. Forsyth Hunter Co., 170 Ga. 640 (153 S. E. 758). In that case the question was whether Forsyth Hunter Company was liable for the tax assessed by the act of August 29, 1929 (Ga. L. 1929, p. 84), against “all corporations incorporated under the laws of Georgia and doing business therein.” In that case it was held that a corporation chartered by a superior court in this State for the purpose of pecuniary gain which owns but one piece of real property and which does nothing but collect and distribute among the shareholders the rent received for such property from another corporation, is not doing business within the meaning of that act. Numerous decisions were cited in support of the ruling made, including several of those referred to above in this opinion. We hold that the plaintiff corporation was not liable for the tax demanded by and paid to the commissioner, either under section 5 or under section1 7 of the gross-receipts-tax act, and thus that the superior court properly refused to dismiss the petition on general demurrer. If
Judgment affirmed.