Colgate-Palmolive-Peet Co. v. Davis

• Decision Date: 08 October 1943
• Citation: 27 S.E.2d 326,196 Ga. 681
• Parties: COLGATE-PALMOLIVE-PEET CO. v. DAVIS, Tax Assessor et al.
• Court: Georgia Supreme Court

27 S.E.2d 326

196 Ga. 681

COLGATE-PALMOLIVE-PEET CO. v. DAVIS, Tax Assessor et al.

Supreme Court of Georgia

October 8, 1943

Syllabus by the Court.

When a nonresident corporation engaged in business in this State becomes the owner of accounts receivable arising out of the business conducted in this State, such credits or accounts receivable have a tax situs in the county wherein such business is conducted, notwithstanding the orders taken for merchandise sold in this State are filled, the shipments thereof made, the credit of the customers passed upon, and the books of account kept, at a point without the State of Georgia.

On November 27, 1942, Colgate-Palmolive-Peet Company, a Delaware corporation with its principal office at Jersey City, New Jersey, filed its equitable petition against the board of tax assessors, the tax receiver, and the tax collector of Fulton County, alleging, that the board of tax assessors over the plaintiff's protest had added to the plaintiff's tax return for the years 1941 and 1942 an assessment of $30,000 each, to cover 'notes and accounts receivable,' alleged to be located in Fulton County; that on January 1 of the years in question it had no notes in Georgia or elsewhere arising from any sales made in Georgia; and that while it had accounts receivable arising from sales of merchandise to customers residing in Georgia and elsewhere, on orders solicited by salesmen operating out of plaintiff's Atlanta sales office, the accounts receivable had no tax situs in Georgia. The plaintiff prayed for injunction against collection of this tax. The defendants filed a joint answer to the petition, alleging that the accounts receivable were and are taxable in Fulton County, and were properly assessed. On the hearing the court refused to grant an injunction, and the plaintiff excepted.

The evidence and admissions disclosed the following facts Colgate-Palmolive-Peet Company, a nonresident corporation maintained in Atlanta, Fulton County, Georgia, a sales office in charge of a 'divisional sales manager.' Salesmen working out of this office solicited orders for merchandise on behalf of the plaintiff, as to both wholesale and retail trade in and out of Fulton County. The salesmen were required to send all orders to the Atlanta district sales office, and they were in turn forwarded to the Jeffersonville, Indiana office to be approved and filled. No copies of the orders were retained by the Atlanta sales office. The salesmen's daily reports kept at the Atlanta office showed the customer's name, address, and amount of merchandise purchased, but the prices were not shown. The customer made payments directly to the Jeffersonville office. When a customer was in arrears, the salesman in whose territory the customer was located was notified, and he advised the customer that no further order would be accepted until the old account was paid; and it was the duty of the salesman to collect, if possible, the account in arrears. Customers in Fulton County consisted of about seven wholesale dealers, about three national chains, and six or seven hundred retail dealers. The policy of the company was to call on all retail outlets handling soap. When customers paid salesmen their delinquent accounts, the salesmen sent the money directly to the Jeffersonville office. The soap products sold by the plaintiff were wrapped with a coupon redeemable by the customer in merchandise of various kinds. A store was maintained in Atlanta where these coupons could be exchanged by the customer for merchandise, a stock of which was kept on hand in the store. The company-owned premium store maintained in Atlanta was the only one in the southeastern territory. Mail-order redemptions were sent to Jersey City, New Jersey. These coupon premiums were offered as an inducement for customers to buy the plaintiff's products, and the salesmen were kept informed as to them. The plaintiff maintained an emergency warehouse in Atlanta, and the stock kept on storage in this warehouse was confined to 'industrial items, items not sold to dealers for resale, such as hotel soap.' The customer, if there was delay in filling his order, could procure a small emergency supply from this public warehouse, which warehouse was supplied by the Jeffersonville office with an approved list of such emergency accounts. The customers whose names appeared on this list could be supplied with emergency supplies without further authority from Jeffersonville. The Atlanta 'sales promotional office' was responsible for hiring, training, and supervising the operation of salesmen and merchandising the products of the company. A bank account was established in Atlanta, for convenience in collecting checks from this territory. No one in Atlanta had authority to draw checks on this account. Salaries were paid by checks drawn at Jeffersonville on Jeffersonville bank accounts; expenses were paid by checks drawn against the Atlanta bank account by the Jeffersonville office. All books of account were kept and all accounting done at the Jeffersonville office. All credits were passed on by the Jeffersonville office, the salesmen furnishing that office with all information available when a new customer was obtained. When a customer's order amounted to a car-load, the merchandise was shipped by rail directly to the customer. Orders less than car-load lots were packed and marked as to each customer at Jeffersonville. A car-load of these separately packed and marked packages was then shipped to one of five points in Georgia, Atlanta, Macon, Augusta, Savannah, and Columbus. All bills of lading were sent to Crackerland Express Inc., in Atlanta, a Georgia corporation. Upon arrival of the car that corporation unloaded it, and with trucks delivered the merchandise to customers at various points in Georgia. The various packages separately packed, and separately billed and marked when loaded at Jeffersonville, were then delivered by Crackerland Express to the customers as called for by the bills of lading received from the Jeffersonville office of Colgate-Palmolive-Peet Company. Signed delivery sheets were returned by Crackerland Express to Jeffersonville. If there were c.o.d. shipments, Crackerland Express collected the...