55 Ga. App. 505 | Ga. Ct. App. | 1937
On August 28, 1935, the State Revenue Commission issued an execution against Edgar Brothers Company for income taxes alleged to be due to the State for the year ending December 31, 1929. The defendant in fi. fa. filed an affidavit of illegality averring, in part, that the claim and reassessment was barred by the statute of limitations; and that it was not subject to income tax, under the act of 1929, on business done in Georgia. The State Revenue Commission filed a traverse of the affidavit of illegality. The case was submitted to the judge without the intervention of a jury. The court held: (1) That “the assessment and execution issued thereon by the plaintiff against the defendant is barred by the statute of limitations;” and (2) that under the “act of the legislature of 1929, the plaintiff is not authorized to assess the income tax against the defendant, for the reason that the facts in this case show that the income derived from the operation of the defendant’s plant, as described in the pleadings, depended on the sale of the manufactured products after they arrived in other States;” and that the act of 1929 did not contain sufficient provisions for reaching incomes derived from such source. On this judgment the plaintiff in fi. fa. assigns error.
The act of 1931, p. 50, sec. 35, provides that the commissioner may determine if “there is a deficiency in respect of the tax imposed by this act [of 1931] or any prior aclj” and sec. 35 (f) on p. 51 provides, that, “as used in this act, the word 'deficiency’ means the amount by which the tax imposed by this act or any prior act exceeds the amount shown as the tax by the taxpayer upon his return, or if no amount is shown as the tax by the taxpayer upon his return, or if no return is made by the taxpayer, the amount determined by the commissioner to be the correct amount of the tax.” (Italics ours.) Since the 1931 act, in dealing with the deficiency, provides for the collection of amounts due under “any prior act,” and the act of 1929 was the only prior act dealing with an income tax, and since the 1929 act failed to provide a time for issuing executions on account of deficiencies, it is clear that deficiencies under the prior act of 1929 are intended to be
The record fails to disclose when the assessment for the 1929 income taxes in the instant case was made; but the tax fi. fa., dated August 28, 1935, states that the “amounts have been assessed.” It might be presumed that the assessment was made ten days before the date of the execution, as section 39 of the act of 1931 (p. 53) provides that “if any tax imposed by this act or any prior acL is not paid within ten daj^s after notice and demand from the commissioner, the commissioner shall issue a fi. fa.” (Italics ours.) However, we consider it unnecessary to call for a diminution of the record, as there is no contention that the assessment of 1929 taxes was made during the three-year limitation period, the contention of the revenue commission being that the three-year statute of limitation period does not apply to taxes which accrued under the 1929 act, and counsel for the commission conceding in their brief that the assessment was made “more than five years after the time for filing the return.” Since the 1929 act (with the exception of the assessment and collection of taxes accrued thereunder before the effective date of the 1931 act) was expressly repealed by the act of 1931, thus leaving the 1931 act as the only State income-tax law in force, and the repealing of the 1929 act and passage of the 1931 act showing that the former act was defective, incomplete or for some reason unsatisfactory to the legislature; and since the 1929 act failed to provide for any period of limitation, and the 1931 act-corrected this defect and provided a period of limitation, and also provided for the assessment and collection of a '“deficiency” in the tax imposed by “any prior act,” and defined the word “deficiency” as meaning the amount by -which the tax imposed by this act “or any prior act” exceeds the amount shown as the tax by the taxpayer upon his return; and this provision of the act of 1931 being remedial, and the execution of the plaintiff in fi. fa. issued August 28, 1935, -being issued after the three-year period of limitation prescribed in the act of 1931, the execution is barred by the statute of limitations.
A subdivision of section 3 of the income-tax act of 1929 (p. 95) provides that “In any case where a non-resident corporation having an office and doixxg business in this State makes its income-tax return in some other State, such corporation shall make an original return to the tax commissioner of Georgia, confined to its business done in this Slate, upon like principles as are in this section above provided.” (Italics ours.) When a corporation mines clay in this State, but has its home office in another State, receives all orders for its product in another State, collects and pays all bills in another State, sells its product to customers ixx other States, sells to no customer in Georgia, and has no officer in Georgia, is this “business done in this State” within the meaning of the act? The phrase “confined to its busixxess done in this State,” as used in the act of 1929, means intrastate business, and not interstate business. A statute of the State of Missouri required express companies to make a statement covering their receipts including all such sums earned or charged for “business done within this State;” and the Supreme Court of the United States, in holding that this statute was intended to include only intrastate receipts, said: “This positive and oft-repeated limitation to business- done within the State, that is, business begun and exxded within the State [was] evidently intexxded io exclude, and the language employed certainly does exclude, the idea that the tax is to be imposed upon the interstate business of the company. 'Business done wiihi/n this SlateJ can not be made to
The foregoing decisions clearly show that a statute fixing a tax on “business done within the State,” or which is “confined to business done in this State,” can not be extended to cover “interstate or foreign” business. The tax on the business of the commissary, which was done “solely within the State,” was paid by the defendant company. See also, in this connection, State v. Rocky Mountain Bell Tel. Co., 27 Mont. 394 (71 Pac. 311); Converse v. Northern Pac. Ry. Co., 2 Fed. (2d) 959; Ratterman
The State Revenue Commission can not collect an income tax from the defendant company on the theory that the company is carrying on a unitary business: (1) because the act of 1929 provides for the collection of an income tax from foreign corporations on intrastate business only (Converse v. Northern Pac. By. Co., supra); and (2) because the act of 1929 provides no rule of apportionment to show what percentage of the entire income of the defendant company should be allotted to Georgia on the basis of the unit rule. The power delegated to the tax-commissioner “to make all necessary regulations for carrying out the provisions of this act” does not and could not legally give him the power to create provisions not embodied in the act. He can not create subject-rmtter of taxation. “It is a settled rule that public officers have only such powers as are granted them; that they take nothing by implication; and that the law granting their powers is to be strictly construed.” Baggerly v. Bainbridge State Bank, 160 Ga. 556, 561 (128 S. E. 766). The 1916 statute of Virginia was much broader than the 1929 statute of Georgia, and covered “all income including that from business in or out of this State;” and yet the Court of Appeals of Virginia, in Commonwealth v. Lorillard Co., 129 Va. 74 (105 S. E. 683), held that the tax authorities could not devise a method of allocation where there was no statutory authority for such allocation. In that case the court said: “'The assessment being so important, the statutory provisions respecting its preparation and contents ought to be observed with particularity. They are prescribed in order to se
Judgment affirmed.