Exec. Limousine Transp., Inc. v. Curry

• Decision Date: 26 October 2021
• Docket Number: A21A0955
• Citation: 361 Ga.App. 626,865 S.E.2d 217
• Parties: EXECUTIVE LIMOUSINE TRANSPORTATION, INC. v. David CURRY, in His Official Capacity as Revenue Commissioner of the Georgia Department of Revenue.
• Court: Georgia Court of Appeals

361 Ga.App. 626

865 S.E.2d 217

EXECUTIVE LIMOUSINE TRANSPORTATION, INC.

v.David CURRY, in His Official Capacity as Revenue Commissioner of the Georgia Department of Revenue.

A21A0955

Court of Appeals of Georgia.

October 26, 2021

James Lester Hughes, Les A. Schneider, Thomas Leland Walker, Atlanta, for Appellant.

Christopher Michael Carr, Alex Fredrick Sponseller, Atlanta, John Scott Forbes, Melody L. Chapman-Caskey, for Appellee.

Rickman, Chief Judge.

This appeal presents questions of first impression concerning the meaning and application of the Georgia Limousine Carrier Act, OCGA § 40-1-150 et seq. ("the Act"), which was adopted into law in 2012. The Commissioner of the Georgia Department of Revenue ("the Department") denied Executive Limousine Transportation, Inc. ("Executive")’s application for a refund of previously remitted state and local-option sales taxes as well as a declaration that Executive would owe no such taxes in the future. The Georgia Tax Tribunal granted the Department's motion for summary judgment on the application, and the superior court affirmed the Tribunal's ruling. We granted Executive's application for discretionary review, and Executive now repeats arguments made below that the Act prohibits local governments from imposing the collection of state or local-option sales taxes on limousine companies and their customers. We disagree and therefore affirm.

The relevant facts are not in dispute. Executive, a licensed limousine carrier, contracts with its drivers and independent operators to provide "chauffeured transportation service" to its customers. Executive's drivers are required to be at least 25 years old; to have a clean driving record, two years of experience, and a for-hire car license endorsement; and to pass a medical examination and a background check. In July 2018, Executive applied to the Commissioner of the Department for (1) a refund of approximately $518,524.62 in state sales tax and $366,767.88 in local-option sales tax and (2) a ruling that it will not be required to collect any such taxes in the future. The Department denied Executive's application. In August 2018, Executive filed a petition with the Tax Tribunal arguing that limousine carriers are not subject to sales tax. The Department countered and moved for summary judgment.

In October 2019, the Tribunal held that Executive "has not overcome the presumption" that the applicable regulation, Ga. Comp. R. & Regs. 560-12-2-.84 ("the Rule"), "is valid and that Executive is subject to sales tax under the Rule's plain language." In addressing Executive's contention that state or local sales taxes constitute an excise tax, the Tribunal held that "notwithstanding the fact that ‘excise tax’ is not defined anywhere in Georgia statute[s], no authority is cited by either party that demonstrates that local sales tax is an excise tax as that term is used in Georgia law."¹

Executive then filed a petition for review in the superior court. There, Executive repeated its claim that limousine carriers should not be subject to state sales tax because their services do not constitute "sales" and, even if they are sales, Executive is exempted because it provides "professional" or "personal" services to its customers. Executive also asserted that the Department violated Executive's right to equal protection by not forcing ride-share companies like Uber to collect sales tax and that Executive is not subject to local sales tax under OCGA §§ 40-1-116 and 40-1-168. Adopting the bulk of the Tribunal's order, the superior court upheld the Tribunal's decision, concluding that under Georgia law and the applicable Rule, "for-hire car services like Executive's are subject to sales tax." The court thus denied Executive's petition, granted the Department's motion for summary judgment, and entered judgment in favor of the Department. We granted Executive's application for review of the superior court's decision.

On this appeal, Executive repeats two arguments made below: (1) local governments may not impose sales tax on limousine carriers, and (2) the "transaction" between Executive and its customers is not a retail sale subject to sales tax, but rather a "professional" or "personal" service exempt from such tax.

When reviewing an appeal from the Tax Tribunal, the superior court defers to the Tribunal's factual findings, but may reverse or modify the judgment if substantial rights of the petitioner have been prejudiced because the Tribunal's findings, inferences, conclusions, or judgments are:

(1) In violation of constitutional or statutory provisions; (2) In excess of the statutory authority of the tribunal; (3) Made upon unlawful procedure; (4) Affected by other error of law; (5) Clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or (6) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.

OCGA § 50-13A-17 (g). We conduct a de novo review of both claimed errors of law in the superior court's appellate review and any interpretation of a statute or agency regulation. Upper Chattahoochee Riverkeeper v. Forsyth County , 318 Ga. App. 499, 502, 734 S.E.2d 242 (2012). "[T]he interpretation of a statute by an administrative agency which has the duty of enforcing or administering it is to be given great weight and deference." (Citation omitted.) Ga. Dept. of Revenue v. Owens Corning , 283 Ga. 489, 490, 660 S.E.2d 719 (2008) ; see also Pruitt Corp. v. Ga. Dept. of Community Health , 284 Ga. 158, 159, 664 S.E.2d 223 (2008). However,

[w]hile judicial deference is afforded an agency's interpretation of statutes it is charged with enforcing or administering, the agency's interpretation is not binding on the courts, which have the ultimate authority to construe statutes.

It is the role of the judicial branch to interpret the statutes enacted by the legislative branch and enforced by the executive branch, and administrative rulings will be adopted only when they conform to the meaning which the court deems should properly be given. The judicial branch makes an independent determination as to whether the interpretation of the administrative agency correctly reflects the plain language of the statute and comports with the legislative intent.

(Citations and punctuation omitted.) Handel v. Powell , 284 Ga. 550, 553, 670 S.E.2d 62 (2008).

1. Executive first argues that the superior court erred in refusing to apply the Georgia Limousine Carrier Act, OCGA § 40-1-150 et seq., and especially OCGA § 40-1-168, which bars local governments from imposing "excise" and other taxes on limousine carriers, to Executive's request for a refund of sales tax. We disagree.

Ever since the first adoption of a state sales tax in 1951, Georgia law has defined a "retail sale" broadly – under current law, for example, as "any sale, lease, or rental for any purpose other than for resale, sublease, or subrent[,]" including, except as otherwise provided, "the sale of ... transportation , ... when made to any purchaser for purposes other than resale[.]" (Emphasis supplied.) OCGA § 48-8-2 (31) and (31) (A) ;² see also Ga. L. 1951, pp. 360, 364, § 3 (c) (1) (defining "retail sale" as including "the sale of ... transportation"). The relevant portion of the tax code, concerning "sales and use taxes," also begins with the following declaration:

It is the intention of the General Assembly in enacting this article to exercise its full and complete power to tax the retail purchase, retail sale , rental, storage, use, and consumption of tangible personal property and the services described in this article except to the extent prohibited by the Constitutions of the United States and of this state and except to the extent of specific exemptions provided in this article.

(Emphasis supplied.) OCGA § 48-8-1. This expansive language in favor of taxation is in accordance with the maxim that "[t]axation is the rule, and exemption from taxation the exception." Owens Corning , supra, 283 Ga. at 490, 660 S.E.2d 719. As our Supreme Court explains:

"[E]xemptions are made, not to favor the individual owners of property, but in the advancement of the interests of the whole people. Exemption, being the exception to the general rule, is not favored; but every exemption, to be valid, must be expressed in clear and unambiguous terms, and, when found to exist, the enactment by which it is given will not be enlarged by construction, but, on the contrary, will be strictly construed."

Id., quoting Collins v. City of Dalton , 261 Ga. 584, 585-586 (4) (a), 408 S.E.2d 106 (1991). OCGA § 48-8-2 (33) (A) likewise defines "sale" broadly, as "any ... transfer of title or possession, transfer of title and possession, exchange, barter, lease, or rental, conditional or otherwise, in any manner or by any means of any kind of tangible personal property for a consideration [.]"³ (Emphasis supplied.)

In accordance with this statutory scheme, Rule 560-12-2-.84, first adopted in 1965 and amended in 1983 and 1991,⁴ declares that for-hire cars are subject to sales tax:

(1) Taxicab owners and operators. Any person owning and operating a taxicab or taxicabs shall register as a dealer and pay the tax at the time of purchase on tangible personal property used or consumed in the operations.... [S]uch person shall collect the tax on fares for the transportation of persons in accordance with the uniform bracket system and shall remit same to the State Revenue Commissioner....

(4) Taxicab "headquarters" operators. Any person operating a headquarters for taxicabs and supervising or directing taxicab drivers, or receiving and relaying calls to cab driver members, shall register as a dealer....

(6) Cars for hire. For the purpose of this regulation, cars for hire are taxable in the same way as taxicabs.

(7) ... (b) [H]eadquarters operators and lessees of taxicabs shall collect the tax on fares for transportation of persons from their drivers as required above .

...