RICHMOND &c. ASSN. v. Richmond County

• Citation: 165 S.E.2d 293,224 Ga. 854
• Decision Date: 05 December 1968
• Docket Number: 24932.
• Parties: RICHMOND COUNTY BUSINESS ASSOCIATION, INC. et al. v. RICHMOND COUNTY et al.
• Court: Supreme Court of Georgia

224 Ga. 854

165 S.E.2d 293

RICHMOND COUNTY BUSINESS ASSOCIATION, INC. et al. v. RICHMOND COUNTY et al.

24932.

Supreme Court of Georgia.

Argued November 13, 1968.

Decided December 5, 1968.

Lanier, Powell, Cooper & Cooper, Wilmer D. Lanier, Harris, Chance & McCracken, Henry T. Chance, for appellants.

Franklin H. Pierce, for appellees.

Arthur K. Bolton, Attorney General, William L. Harper, H. Perry Michael, Assistant Attorneys General, amicus curiae.

GRICE, Justice.

This appeal involves attacks upon an ordinance of Richmond County purporting to fix "an annual and specific occupation tax and licenses for businesses and professions operating" in that county outside the corporate limits of any city or town. The attacks were made in a complaint filed in the Superior Court of the county by Richmond County Business Association, Inc., and owners of businesses located in the county. Named as defendants were Richmond County and the individuals comprising its Board of Commissioners of Roads and Revenues.

The plaintiffs' complaint alleged, in substance, that the individual plaintiffs are engaged in businesses subject to payment of taxes and licenses under such purported ordinance of the county, claimed to have been adopted on July 12, 1968, affecting businesses and professions in unincorporated areas of the county. The attacks which they lodged against the ordinance included those relating to place of adoption; adoption by nonentity governing body; provision for misdemeanor punishment; violation of the equal protection and due process clauses of the State and Federal Constitutions because of exclusion of businesses within incorporated areas; absence of provision for notice, hearing and appeal; imprisonment for debt; unintelligible wording; notice of passage not by signature of governing body; preferential treatment of savings and loan associations; and lack of constitutional or statutory authority to impose an occupation tax. They also assert that the Home Rule Amendment to the Constitution, cited by the defendants as authority for the ordinance, did not become a part of the Constitution due to the insufficient wording of the ballot submitting it to the people for ratification. The complaint alleged that the plaintiffs are in need of relief against property levies and criminal prosecution from attempted collections under said ordinance, and against illegal expenditures of public funds in enforcing such ordinance. The prayers included injunction against attempts to enforce the ordinance, declaration that it is null and void, and general relief.

The defendants in their answer denied the material allegations of the complaint, and asserted that the ordinance is valid. Also, they sought to set up an amendment to the ordinance deleting misdemeanor punishment and providing for hearing and appeal from determination of the amount claimed to be due. The plaintiffs moved to strike these matters, and amended their complaint to challenge the validity of the amendment to the ordinance.

An interlocutory hearing was held in which the essential evidence was not in dispute. Upon its conclusion, the trial court entered judgment dissolving the restraining order previously granted and denying the prayer for temporary injunction.

The appeal is from this judgment and also from the failure to rule on the plaintiffs' motion to strike portions of the defendants' answer, above referred to.

As we view the case, the decisive issue is that as to the county's authority to enact this ordinance.

1. The ordinance, as we appraise it, manifestly attempts to impose a tax, not a mere license fee.

Its caption states that it fixes "an annual and specific occupation tax and licenses for businesses and professions operating" in the unincorporated areas of the county.

The body of the ordinance provides for six separate classes listing several hundred businesses and professions. It sets forth a formula for determining a "license fee" which employs two factors, the number of employees and also the gross revenue of the business. Both of these factors are applied in ascending graduations so that, as they increase, the license fee increases also (except as to named professions whose fees are limited by statute). The "license fee" is defined as "The fixed occupation tax imposed by ordinance for a license to engage in business..."

Nowhere in the ordinance are there any provisions that regulate the conduct of the businesses and professions.

The distinction between a tax and a license is not one of names but of substance. A tax is primarily intended to produce revenue, while a license is primarily intended for regulation under the police power. Morton v. Mayor &c. of Macon, 111 Ga. 162, 163 (36 SE 627, 50 LRA 485); Peginis v. City of Atlanta, 132 Ga. 302, 303 (63 SE 857, 35 LRA (NS) 716); Publix-Lucas Theatres v. City of Brunswick, 206 Ga. 206, 212 (56 SE2d 254); 33 AmJur 325, 326, Licenses, § 2; 53 CJS 477, Licenses, § 10 (b).

The ordinance in question, insofar as whether it imposes a tax or license fee, is essentially similar to, and in many respects is identical with, the one involved in Pharr Road Investment Co. v. City of Atlanta, 224 Ga. 752, which we held imposed a tax instead of a license fee. That holding is controlling here.

2. In determining whether Richmond County has authority to impose a tax such as the one involved here, we must be mindful of the principle that "A county can only exercise the power of taxation as conferred upon it either directly by the Constitution or by the General Assembly when authorized by the Constitution. Citations. If there is any doubt as to the power of the county to tax in a particular instance, it must be resolved in the negative." Commissioners of Chatham County v. Savannah Elec. &c. Co., 215 Ga. 636, 637 (112 SE2d 655). See also, Mayor &c. of Savannah v. Hartridge, 8 Ga. 23.

From the examination made of the citations submitted by counsel and from our own research, we have concluded that Richmond County has no authority to impose the tax involved here.

(a) For this authority the county relies upon the Home...