Georgia State and Local Tax (SALT) Alerts

State and Local Tax Insights

Vacated Attorney’s Fees | Georgia Department of Revenue Provides Guidance on Kaestner Decision

  • The Georgia Court of Appeals vacated an award of attorneys’ fees withheld by the local tax commissioner from excess funds generated from a tax sale. The fees were withheld when the commissioner asked a trial court to determine who was entitled to the excess tax-sale funds. The court of appeals held that the record lacked evidence to support the award of attorneys’ fees. Plus, there was no indication how the trial court calculated the amount awarded, and the record failed to state the requisite basis of the award. An award of attorneys’ fees under GA law can be authorized only if there’s proof of the actual costs and the reasonableness of those costs. (Dkt. No. A19A1252)
  • The Georgia Dept. of Revenue (DOR) has issued guidance regarding the taxability and filing requirements under Georgia state law in light of the U.S. Supreme Court decision in “North Carolina Department of Revenue v. Kimberley Rice Kaestner 1992 Family Trust.” The DOR states that it’ll follow the Kaestner decision, but it will be limited in scope to the facts of that case. This means that, for the state’s purposes, with respect to facts that are specifically like those in Kaestner, a nonresident trust fiduciary won’t be subject to Georgia taxation. Otherwise, the fiduciary would be subject to taxation under GA state law and have to file a return.

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