Georgia State and Local Tax Alerts – November 2019

• The Georgia Court of Appeals has dismissed an action for unjust enrichment filed by a property owner against defendant firms that purchased tax executions for delinquent ad valorem taxes on the owner’s property. The court stated that the defendants were entitled to collect interest amounts based on the higher initial tax assessments. The fact that the assessments were later reduced didn’t entitle the property owner to a refund of interest and penalties based on the lower assessment value of the property. The owner failed to pay the delinquent taxes while pursuing appeal of the assessment and awaiting a reduction of the assessed value, so the tax executions remained valid. (Dkt. No. A19A1297)
• The Georgia Court of Appeals has ruled that a bank that was a security holder of a deed executed by the original property owner wasn’t precluded under Georgia state law from seeking excess tax sales proceeds through an interpleader action. The bank was the grantee of the security deed through the original owner and has an ownership interest in the property. Although the deed was unrecorded, it’s nevertheless a valid lien on the property. Thus, the bank has an interest in the property allowing it to seek the excess funds. The statute doesn’t prohibit parties with unrecorded security interests from seeking excess funds. (Dkt. No. A19A1347)
• The Georgia Dept. of Revenue has ruled that shipping containers sold to a Georgia Agricultural Tax Exemption (GATE) card holder are exempt from tax if the containers are used for packaging or shipping agricultural products. There’s no regulatory limitation on the size, dimensions or physical makeup of containers that can qualify for the exemption. Accordingly, a shipping container used in an agricultural operation as portable storage could qualify for exemption under the GATE program. A dealer’s acceptance of a GATE card taken in good faith from the purchaser is sufficient documentation to establish the exemption. (Georgia Letter Ruling No. LR SUT-2018-13)
• The Georgia Dept. of Revenue has ruled that the sales of tickets to a ballet performance at the taxpayer’s theater are exempt from sales and use tax because the taxpayer is a tax-exempt organization. The organization’s primary mission is to provide performing arts education and ballet training, which meets that statutory requirement for the exemption of advancing education in the arts in Georgia and providing programming that enriches the state’s residents. (Georgia Letter Ruling No. LR SUT-2018-14)
• Georgia has amended a regulation related to the Railroad Track Maintenance Tax Credit. Effective Dec. 2, 2019, the reg provides that, to claim the railroad track maintenance tax credit, a taxpayer must submit Form IT-RTM, and any additional information the commissioner may request, along with the taxpayer’s Georgia income tax return each year the tax credit is claimed. A software program’s Form IT-RTM that’s electronically filed with a Georgia income tax return in the manner specified by the Georgia Dept. of Revenue satisfies this requirement. Previously, the credit could only be claimed by electronically submitting Form IT-RTM through the Georgia Tax Center.
• The Georgia Dept. of Revenue (GDOR) has ruled that charges for its energy-saving platform aren’t subject to sales and use tax. The platform generates net energy savings for its customers, which is a tax-exempt service. And even though the service also includes the transfer of tangible personal property for which no separate charge is made, that service is merely ancillary to the tax-exempt service. The GDOR deemed the customer to be purchasing a service from a taxpayer, and in the process the taxpayer uses and installs certain equipment as a necessary component relating to such efficiency savings services that it provides. (GA Letter Ruling No. LR SUT-2019-01)
• In a letter ruling, the Georgia Dept. of Revenue has ruled that the sales of tickets to certain seminars aren’t in the nature of taxable retail sales and are exempt from sales and use tax. The seminars were aimed at helping small business owners improve their sales skills and business practices. Unlike customers purchasing tickets to entertainment events, those who attend the seminars have the expectation of advancing and developing their business skills. The seminars were in the nature of job training or continuing education conferences, which do not fall within the definition of taxable retail sales. (Georgia Letter Ruling No. LR SUT-2018-15)
• The collection of jet fuel sales taxes has been suspended indefinitely. The Georgia Dept. of Revenue has issued a letter ruling that the collection of Georgia sales and use tax on sales of jet fuel is suspended indefinitely until the General Assembly passes a law ending the suspension. Accordingly, providers of U.S. domestic and international air transportation for passengers and cargo aren’t required to pay state sales and use tax for retail purchases of jet fuel both within and outside of Georgia, for use in their aircraft. (Georgia Letter Ruling No. LR SUT-2019-02)

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