Cotton States Mut. Ins. Co. v. DeKalb County

• Decision Date: 29 June 1983
• Docket Number: 39639 and 39628,Nos. 39586,s. 39586
• Citation: 251 Ga. 309,304 S.E.2d 386
• Court: Georgia Supreme Court
• Parties: COTTON STATES MUTUAL INSURANCE COMPANY et al. v. DeKALB COUNTY et al. COTTON STATES MUTUAL INSURANCE COMPANY et al. v. DeKALB COUNTY et al. GOVERNMENT EMPLOYEES INSURANCE COMPANY v. DeKALB COUNTY et al.

Page 386

304 S.E.2d 386

251 Ga. 309

COTTON STATES MUTUAL INSURANCE COMPANY et al. v. DeKALB COUNTY et al.

COTTON STATES MUTUAL INSURANCE COMPANY et al. v. DeKALB COUNTY et al.

GOVERNMENT EMPLOYEES INSURANCE COMPANY v. DeKALB COUNTY et al.

Nos. 39586, 39639 and 39628.

Supreme Court of Georgia.

June 29, 1983.

Rehearing Denied July 22, 1983.

Durwood T. Pye, Tom Pye, L. Lee Dailey, Atlanta, for Cotton States Mut. Ins. Co. et al.

George P. Dillard, Gail C. Flake, Dillard & Wolfe, P.C., Decatur, Michael J. Bowers, Atty. Gen., for DeKalb County, Ga., et al.

John A. Blackmon, Bruce H. Beerman, Smith, Cohen, Ringel, Kohler & Martin, Atlanta, for Government Employees Ins. Co.

Dillard & Wolfe, George P. Dillard, Gail C. Flake, for appellees.

Eugene Hardwick Polleys, Jr., Walter Edwin Summer, L. Clifford Adams, Jr., Joseph C. Parker, James M. Elliott, Jr., James B. Blackburn, amici curiae.

SMITH, Justice.

These cases, consolidated for appeal, present the question of the validity of a 1973 DeKalb County ordinance levying an annual license tax on casualty insurance companies doing business in unincorporated DeKalb County. In 1981 DeKalb County officials assessed back taxes for the years 1974 through 1981 against each appellant. Appellants exhausted their administrative appeals, then filed suit in DeKalb Superior Court seeking to have the taxing ordinance declared invalid and its enforcement enjoined. Government Employees Insurance Company (GEICO) and Cotton States appeal from separate decisions upholding the tax.

The ordinance, entitled "General License Fees and Occupational Taxes," requires certain insurance underwriting companies ¹ doing business in unincorporated DeKalb County to pay a "charge in an amount equal to three per cent (3%) of the gross direct premiums received during the preceding license year from policies of fire, casualty, surety, property, marine, transportation, liability, industrial, steam boiler, windstorm, livestock, title fidelity, credit, workman's compensation, excess, surplus, automobile, material damage and other insurance issued upon property and business located within the unincorporated portion of the county." DeKalb County Code § 7-1011. The ordinance also requires each insurance company maintaining an office or place of business, other than a sales office, in unincorporated DeKalb County to pay a $225 tax for the first place of business and a $100 tax for each additional county office.

1. Appellants concede that DeKalb County possesses authority to impose a license fee for regulatory purposes, but they contend that the county has no constitutional or statutory authority to assess a revenue producing business license tax on casualty insurance companies doing business in DeKalb County. At the outset, then, we must decide whether the ordinance in question is primarily regulatory or revenue producing in nature. "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." Richmond County Business Assn. v. Richmond County, 224 Ga. 854, 856, 165 S.E.2d 293 (1968). There is little doubt as to the primary intent, or for that matter the practical effect, of the county's gross premium tax on insurance companies. The ordinance (which according to one DeKalb official raised over $1,680,000 in county revenues in fiscal year 1981), is directly tied to the affected companies' ability to pay, and does not even purport to regulate the insurance industry in DeKalb County. Its sole purpose appears to be the production of county revenues. It is a tax, not a license. See DeKalb County v. Atlanta Gas Light Co., 228 Ga. 512, 186 S.E.2d 732 (1972); DeKalb County v. Brown Builders Co., Inc., 227 Ga. 777, 778, 183 S.E.2d 367 (1971); Pharr Road Investment Co. v. Atlanta, 224 Ga. 752, 754, 164 S.E.2d 803 (1968).

2. It is settled that counties possess only those powers which the state has expressly or impliedly granted to them. DeKalb Co. v. Atlanta Gas Light Co., supra, 228 Ga. at 513, 186 S.E.2d 732. "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 ... 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." DeKalb Co. v. Brown Builders, supra, 227 Ga. at 778, 183 S.E.2d 367. As authority for its 3% gross premiums tax, DeKalb County cites a local constitutional amendment, 1958 Ga.Laws 582, and implementing statute, 1959 Ga.Laws 2658. These acts are no strangers to this court. Since their enactment, we have on at least five occasions been asked to review DeKalb County taxing attempts which were purportedly authorized by this constitutional amendment and implementing act. See DeKalb Co. v. Georgia Power Co., 249 Ga. 704, 292 S.E.2d 709 (1982) (right-of-way permit); DeKalb Co. v. Allstate Beer, Inc., 229 Ga. 483, 192 S.E.2d 342 (1972) (wholesalers' audit fee); Chicago Title Co. v. Nash, 228 Ga. 719, 187 S.E.2d 662 (1972) (insurance company license tax); DeKalb Co. v. Atlanta Gas Light Co., supra, (public utilities right-of-way fee); DeKalb Co. v. Brown, supra (building permit fee). Each time this court, for a variety of reasons, has declared the particular DeKalb taxing ordinance to be void. ²

Appellants raise various constitutional challenges to the ordinance, local constitutional amendment, and enabling act. In addition to these arguments, in Case No. 39628 GEICO contends that it was not "doing business" in unincorporated DeKalb so as to be subject to the license tax. We need not address these claims or the remaining enumerations because we conclude that the ordinance is void as an attempt to regulate the insurance industry in an area which has been preempted by the state.

Section 7-1011 of the DeKalb County Code was enacted in 1973 under the authority of the 1959 enabling act. In 1960 the General Assembly enacted the Georgia Insurance Code, which levies a statewide gross premium tax of 2 1/4% on all casualty insurance companies doing business in Georgia, OCGA § 33-8-4 (Code Ann. §§ 56-1303, 56-1312), as well as a flat $300 yearly license fee on all insurance companies, OCGA § 33-8-3 (Code Ann. § 56-1309). Appellants contend that the 1960 enactment repealed by implication DeKalb County's statutory authority to impose a gross premium tax on casualty insurance companies. We agree.

The law applicable to repeal by implication was well stated in Nash v. National Preferred Life Ins. Co., 222 Ga. 14, 21, 148 S.E.2d 402 (1966): "While repeal by implication is not favored, a statute will be held to have repealed a prior statute where the latter is clearly inconsistent and contrary to the most recently enacted law or where the later enactment appears to cover the entire subject matter and give expression to the whole law on the subject." A special or local act may be repealed by a subsequent general law "where the provisions of the general act manifest that it was the intention of the legislature to enact a general law on the subject-matter which should be exhaustive and a substitute for every prior general, local, and special law relating to the subject-matter [covered by the general act]." Hammond v. State, 10 Ga.App. 143, 72 S.E. 937 (1911): The 1960 act, of which present OCGA § 33-8-4 (Code Ann. §§ 56-1303, 56-1312) is an integral part, is such a general act. Its introduction states that the Act is intended to "revise, classify, consolidate, and supersede the present laws relating to insurance ..." 1960 Ga.Laws 289. The Insurance Code extensively and exhaustively regulates, at the state level, all aspects of the insurance...