Georgia Appeals Court Upholds Sales Tax on Limousine Carrier
The Georgia Court of Appeals has held that a licensed limousine carrier is subject to the state and local option sales tax.
The court ruled October 26 in Executive Limousine Transportation Inc. v. Curry that the transactions between a licensed limousine carrier and its customer are retail sales subject to the sales tax and that imposing the local sales tax on the company is not prohibited by state limousine carrier legislation.
In July 2018, Executive Limousine Transportation applied for a state and local sales tax refund totaling roughly $900,000 and a prospective ruling that it was not required to collect sales taxes. The Georgia Department of Revenue denied the application and the Georgia Tax Tribunal agreed with the DOR, finding that the company was subject to the sales tax under the plain language of the applicable regulation, Rule 560-12-2-.84. The tribunal noted that “excise tax” is not defined in Georgia statutes and that neither party cited any authority supporting the assertion that the local sales tax is an excise tax as used in the state law, as Executive Limousine had argued.
Appealing to the Fulton County Superior Court, Executive Limousine claimed that its transactions were a professional or personal service rather than retail sales and therefore were exempt from the sales tax. The company also claimed that the Georgia Limousine Carrier Act prohibited imposing local sales taxes on limousine companies and their customers. Further, it argued that the DOR violated the company's right to equal protection by not requiring ride-share companies to collect sales tax.
The superior court upheld the tribunal’s decision, concluding that Executive Limousine, as a for-hire car service, was subject to the state and local sales tax.
The court of appeals agreed, finding that Georgia law defines the term “retail sale” broadly and that “the sale of transportation by hired car has been subject to sales tax ever since that tax’s introduction into Georgia law,” noting that Rule 560-12-2-.84 was first adopted in 1965 and amended in 1983 and 1991.
Stating that the Limousine Carrier Act prohibits localities from imposing excise, license, or occupation taxes but noting that the term “sales tax” is not used in the act, the court added that it must respect the General Assembly’s choice of omission.
The court said that “Georgia law commonly distinguishes between ‘excise’ and ‘sales’ taxes as those imposed earlier and later in the stream of commerce — that is, at the wholesale and retail levels” and noted that the license and occupation taxes that are also barred by the act are imposed before or in addition to the taxes imposed at the ultimate sale to the consumer.
In a dissent, Presiding Judge Christopher J. McFadden argued that the tax tribunal lacked jurisdiction to hear any matter arising under the Limousine Carrier Act and that the case should be remanded for the tribunal to dismiss that claim or transfer the entire matter to the superior court.
Though he acknowledged that neither party raised the jurisdictional issue, McFadden said the long-standing rule in Georgia is that “an administrative body’s lack of subject-matter jurisdiction cannot be waived.”
The taxpayer in Executive Limousine Transportation Inc. v. Curry (A21A0955) is represented by attorneys with Wimberly, Lawson, Steckel, Schneider & Stine PC.