Blevins v. Dade County Bd. of Tax Assessors

• Decision Date: 01 November 2010
• Docket Number: No. S10A1083.,S10A1083.
• Citation: 10 FCDR 3484,702 S.E.2d 145,288 Ga. 113
• Parties: BLEVINS v. DADE COUNTY BOARD OF TAX ASSESSORS.
• Court: Georgia Supreme Court

702 S.E.2d 145

288 Ga. 113

10 FCDR 3484

BLEVINS

v.DADE COUNTY BOARD OF TAX ASSESSORS.

No. S10A1083.

Supreme Court of Georgia.

Nov. 1, 2010.

Townley & Lindsay, Christopher A. Townley, Thomas F. Lindsay, Rossville, for appellant.

Thurbert E. Baker, Attorney General, James R. Rogers, Trenton, for appellee.

NAHMIAS, Justice.

On April 25, 2002, the General Assembly passed House Bills 918 and 919, which provided for local homestead exemptions for Dade County, subject to the approval of Dade County voters. House Bill 918 established a homestead exemption from certain Dade County ad valorem taxes for county purposes in an amount equal to the amount by which a residential property's current year assessed value exceeds the base year assessed value. House Bill 919 established a similar homestead exemption from certain Dade County School District taxes for educational purposes. The base year under the bills "is the taxable year immediately preceding the taxable year in which the [homestead] exemption is first granted to the most recent owner of [the] homestead." The bills therefore generally establish acquisition value tax exemptions. The exemptions are available to homeowners only, and they apply only to a taxpayer's primary residence and not more than three contiguous acres of land immediately surrounding the residence. The exemptions do not apply to taxes assessed on "improvements to the homestead" or to land that is added to the homestead after July 1 of the base year. Dade County voters approved the homestead exemptions on November 5, 2002.

Appellant Rex Blevins owns land in Dade County but not a home that qualifies for the exemptions. He brought this action, challenging the constitutionality of the homestead exemption bills on severalgrounds. The trial court ruled against Blevins's claims, and he appealed. We now affirm.

1. Blevins contends that the tax exemptions violate the Uniformity Clause of the Georgia Constitution, which provides that "all taxation shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax." Ga. Const. of 1983, Art. VII, Sec. I, Par. III(a). In addition, Paragraph III(b) provides that, with limited exceptions not applicable here, "the classes of subjects for the taxation of property shall consist of tangible property and one or more classes of intangible personal property."

To support its position that the tax exemptions do not violate the Uniformity Clause, the Dade County Board of Tax Assessors relies on cases that hold that, "[w]here uniformity of taxation is involved, reasonableness of classification is all that is required." Chanin v. Bibb County, 234 Ga. 282, 290, 216 S.E.2d 250 (1975). Accord Lake Lanier Theatres v. Hall County, 229 Ga. 54, 55-56, 189 S.E.2d 439 (1972). These cases, however, did not involve "tangible property." See Chanin, 234 Ga. at 287-290, 216 S.E.2d 250 (excise taxes); Lake Lanier Theatres, 229 Ga. at 55-56, 189 S.E.2d 439 (business license taxes); Wright v. Hirsch, 155 Ga. 229, 235-242, 116 S.E. 795 (1923) (occupation taxes).

By contrast, the Constitution creates "tangible property" as a single class of property. See Art. VII, Sec. I, Par. III(b). "Tangible property" includes real and personal property, and "the General Assembly has no authority to establish different classes or subclasses of tangible property other than as fixed by the [Constitution]." Griggs v. Greene, 230 Ga. 257, 263-264, 197 S.E.2d 116 (1973). See also Benson-Corwin, Inc. v. Cobb County School Dist., 239 Ga. 199, 200, 236 S.E.2d 361 (1977) (holding that real and personal tangible property "constitutes a single class of property and must be assessed and taxed alike"). The types of tangible property that may be separately classified and subclassified by the General Assembly under the Uniformity Clause are listed in subsection (b) of Article VII, Section I, Paragraph III and are inapplicable in this case.

Thus, the Uniformity Clause itself does not permit the classification and subclassification of the "tangible property" involved in this case. Nevertheless, we conclude that the Dade County homestead exemptions are constitutional under one of the Tax Exemption Clauses of our Constitution. See Ga. Const. of 1983, Art. VII, Sec. II, Par. II. Tax exemptions in general are at odds with the equality of taxation sought by the Uniformity Clause. See Southwestern Bell Tel. Co. v. Combs, 270 S.W.3d 249, 263 (Tex.App.2008) (holding that "exemptions from taxation are subject to strict construction because they place a greater burden on other tax-payingbusinesses and individuals rather than placing the burden on all taxpayersequally.... As such, tax exemptions are 'the antithesis of equality and uniformity.' " (citation omitted)); Gilman v. Sheboygan, 67 U.S. 510, 517, 2 Black 510, 17 L.Ed. 305 (1863) (" 'It cannot be denied that under the power of exemption unjust enactments in respect of the power of taxation might be made. But those who framed the [Wisconsin] Constitution did not see fit to prevent such evils by depriving the Legislature of the power.' " (citation omitted)).

The Georgia Constitution, however, expressly authorizes statewide tax exemptions that are inconsistent with uniformity and equality in taxation of tangible property. Article VII, Section II, Paragraph II(a)(1) permits the General Assembly to provide for a broad range of exemptions of property from ad valorem taxation if the "exemption is approved by two-thirds of the members elected to each branch of the General Assembly and by a majority of the qualified electors of the state voting in a referendum thereon." Pursuant to this authority, the General Assembly has approved, for example, homestead exemptions for each resident of the State who owns and occupies a home as a residence, OCGA § 48-5-44; additional homestead exemptions for each person who is 65 years of age or older, OCGA § 48-5-47, and for disabled veterans, OCGA § 48-5-48; and exemptions for qualified farm products, OCGA § 48-5-41.1. The General Assembly has also provided a homestead exemption for individuals 62 or older with annual incomes not exceeding $30,000 that is calculated in the same fashion as the exemptions in this case. See OCGA § 48-5-47.1(a)(3) and (b) (authorizing an exemption equal to the amount by which a property's current year assessed value exceeds the value for the taxable year immediately preceding the taxable year in which the exemption was first granted to the resident, with the exemption applying only to five acres of land immediately surrounding the residence and not applying to improvements to the property or to land added to the property after the base year).

In contrast to the number of statewide tax exemptions the General Assembly, along with the citizens, may approve, Article VII, Section II, Paragraph II(a)(2) of the Constitution permits only one exemption—for a homestead—to be enacted by local law, and it must be approved by the General Assembly and "by a majority of the qualified electors residing within the limits of the taxing jurisdiction voting in a referendum thereon." Over the years, the General Assembly has approved and local voters have ratified many local homestead exemptions like those in this case. See, e.g., Ga. L. 2006, p. 4636 (DeKalb County); Ga. L. 2002, p. 5858 (Walton County).

This Court must construe the Georgia Constitution to make its parts harmonize and to give sensible meaning to each of them. See Blum v. Schrader, 281 Ga. 238, 241, 637 S.E.2d 396 (2006);Fulton County v. Perdue, 280 Ga. 807, 810, 631 S.E.2d 362 (2006). Construing the Uniformity Clause and the Tax Exemption Clauses of the Constitution in this way, we conclude that the legislature and the voters of this State have the constitutional authority to exempt certain tangible property from taxation even though it creates some nonuniformity of taxation. Any other construction would defeat the constitutional grant of authority to authorize homestead exemptions. See Chicagoland Chamber of Commerce v. Pappas, 378 Ill.App.3d 334, 317 Ill.Dec. 113, 880 N.E.2d 1105, 1125-1132 (2007) (holding that a homestead exemption similar to those provided in Dade County did not violate Illinois's Uniformity Clause); Simmons v. Idaho State Tax Comm., 111 Idaho 343, 723 P.2d 887, 890-892 (1986) (holding that a homestead exemption exempting the lesser of the first $50,000 or 50% of the value of an owner-occupied residence did not violate Idaho's Uniformity Clause).

In Simmons, the owners of income-producing property argued that the homestead exemption had the same effect as a tax scheme that initially assessed owner-occupied residences at a lower rate than income-producing property and that Idaho courts had held that such schemes violated Idaho's Uniformity Clause. See id. at 890. But the Idaho Supreme Court held that, "[w]hile the effect of initial assessment of owner-occupied residentialproperty at rates differing from income producing property may differ little in substance from an initial uniform assessment of both properties, followed by a partial exemption of the residential property, the state constitution contemplates such a distinction." Id.

The Georgia Constitution contemplates the same distinction. We note that the hurdles to creating a local homestead tax exemption—a decision of the General Assembly to place the matter before the affected voters and then voter approval of the proposed exemption—provide much greater protection for citizens than a system that would permit every local tax authority to make its own unilateral decision, with no input from the taxpayers, to impose different assessment rates on different types of tangible property. Thus, Benson-Corwin, on which Blevins relies, is inapplicable. There, Benson-Corwin's property was annexed into the City of Marietta from the unincorporated area of Cobb County, and the assessed value of its property was increased. See 239 Ga. at 199, 236 S.E.2d 361. Benson-Corwin...