State Revenue Comm'n v. Nat'l Biscuit Co. *, 9982.
| Court | Supreme Court of Georgia |
| Writing for the Court | BELL, Justice |
| Citation | 175 S.E. 368,179 Ga. 90 |
| Parties | STATE REVENUE COMMISSION et al. v. NATIONAL BISCUIT CO. * NATIONAL BISCUIT CO. v. STATE REVENUE COMMISSION et al. |
| Docket Number | No. 9982.,9982. |
| Decision Date | 16 June 1934 |
175 S.E. 368
STATE REVENUE COMMISSION et al.
v.
NATIONAL BISCUIT CO. *
NATIONAL BISCUIT CO.
v.
STATE REVENUE COMMISSION et al.
No. 9982.
Supreme Court of Georgia.
June 16, 1934.
Rehearing Denied July 12, 1934.
1. In the administration of the Income Tax Act of August 22, 1929 (Laws 1929, p. 92) the state income taxes as imposed by the act itself should be deducted in ascertaining net taxable income. Such construction of the act is not "impracticable and mathematically impossible to enforce or administer."
2. The act permitted the deduction of state taxes, but not federal; and this was so plainly and manifestly true that a taxpayer could not be relieved of liability by any interpretation, rule, or conduct by a tax commissioner to the contrary.
3. The state revenue commission has the power to issue writs of fieri facias against delinquent taxpayers legally owing taxes to the state under the Georgia income tax law of 1929. The commission also has power to make an additional assessment against a taxpayer who made an erroneous or insufficient return under that statute.
4. The state revenue commission has not the power to claim and collect 1 per cent. per month as interest or penalty for taxes unpaid and claimed under the state income tax law of 1929, against a taxpayer who has not failed to make a return, but has only made an erroneous return, omitting the taxes upon which the interest or penalty is claimed. Nor are the provisions of the Income Tax Act of 1931 (Laws 1931 [Ex. Sess.] p. 24) as to penalties legally applicable to income taxes due under the prior law, where no part of the delinquent taxes was returnable or due under the later act, but all of such taxes were returnable and due under the act of 1929.
GILBERT, J., dissenting.
Certified Questions from Court of Appeals.
Suit between the State Revenue Commission and others and the National Biscuit Company. To review the judgment, both sides
[175 S.E. 369]bring error to the Court of Appeals, which certifies questions.
Questions answered.
The Court of Appeals certified the following questions:
"1. In the administration of the Georgia income-tax law approved August 22, 1929 (Ga. Laws 1929, p. 92), could the State Revenue Commission properly construe the provisions of said act so as to allow deductions for payments to the State of State income taxes as imposed by the act itself, or would such a construction be unreasonable and erroneous as being impracticable and mathematically impossible to enforce or administer?
"2. Under the Georgia income-tax law approved August 22, 1929 (Ga. L. 1929, p. 92), could the State Revenue Commission, in March, 1932, lawfully assess and recover under a tax execution against a taxpayer, deficiency taxes under that act upon amounts shown by the returns of such taxpayer corporation to the State tax-commissioner, for the 1929 and 1930 taxable calendar years, to be the amounts of its Federal income taxes accrued, returned, and paid to the United States for and during the periods of time covered by such State returns, irrespective of whether or not any claim had been made in its Federal returns during such periods for its State income taxes, under the then effective United States Revenue Act approved May 29, 1928 (USCA title 26, § 2001 et seq.), and referred to in the said State law, and which amounts of Federal income taxes the taxpayer in said returns in calculating its net income had deducted from the amounts of its gross income without deducting in such returns its State income taxes during such periods, where, under the administration of such State income-tax law of 1929 by the State Revenue Commission and the State tax-commissioner, they uniformly construed such State law as permitting and permitted this and other taxpayers, in their State returns and payments of income taxes to the State, to deduct from gross income Federal income taxes, but not State income taxes, for the corresponding taxable periods under those laws from the time of enactment of such State law until such reassessment against said taxpayer in March, 1932; and where the State tax commissioner iIssued written instructions and blank forms to this and other taxpayers for the making of their State income-tax returns for 1929 and 1930, as follows: 'Federal Income Taxes deductible.--Taxpayers may claim as a deduction and enter as Item 18 the amount of any income tax which would be payable to the Federal government, for the same period as this return, had no claim been made in the Federal return for State income tax, ' and provided space in such blanks for the deduction of Federal but not State income-taxes: and where said taxpayer in good faith relied upon such construction of the law by said State official by following such instructions and blanks, and returned and paid accordingly its income taxes to the State by deducting from its gross income stated in such returns its Federal but not its State income taxes?
"3. Has the State Revenue Commission the legal power to issue writs of fieri facias against delinquent taxpayers legally owing taxes to the State under the Georgia income-tax law approved August 22, 1929 (Ga. Laws 1929, p. 92)?
"4. Has the State Revenue Commission the legal power to make an additional assessment against a taxpayer who makes an erroneous or insufficient return of taxes returnable under the State income-tax law approved August 22, 1929 (Ga. Laws 1929, p. 92), after the taxpayer has previously filed such a return; or is the power to make such assessments under said law limited to cases where a taxpayer has failed, neglected, or refused to make a tax return?
"5. Has the State Revenue Commission the legal power to claim and collect one per cent. per month as interest or penalty for taxes unpaid and claimed under the State income-tax law approved August 22, 1929 (Ga. Laws 1929, p. 92), against a taxpayer who has not tailed to make a return, but has only made an erroneous return omitting the taxes upon which the interest or penalty is claimed?
"6. Is the interest or penalty on unpaid delinquent taxes provided by the State income-tax law of 1931, approved March 31, 1931 (Ga. Laws 1931, Ex. Sess., p. 24), legally applicable to income-taxes due or returnable under the State income-tax law approved August 22, 1929, where no part of the delinquent taxes claimed was returnable or due under said act of 1931, but all of such taxes were returnable and due under said act of 1929? "
Lawrence S. Camp, former Atty. Gen., and W. K. Meadow and Frank A. Holden, former Asst. Attys. Gen., M. U. Yeomans, Atty. Gen., and B. D. Murphy, and Jno. T. Goree, Asst. Attys. Gen., for plaintiff in error State Revenue Commission and others.
Jones, Johnston, Russell & Sparks, of Macon, Colquitt, Parker, Troutman & Arkwright. Robt. S. Sams, and Marion Smith, all of At-
[175 S.E. 370]lanta (Hull, Barrett & Willingham, of Augusta, Geo. C. Palmer, of Columbus, and Alston, Alston, Foster & Moise, of Atlanta, for parties at interest, not parties to record), for defendant in error National Biscuit Co.
BELL, Justice.
1. The first question propounded by the Court of Appeals is answered as follows: (1) In the administration of the Income Tax Act of August 22, 1929 (Ga. Laws 1929, p. 92), the state revenue commission should construe the provisions of the act so as to allow deductions for payments of the state income taxes as imposed by the act itself. (2) Such a construction would not be "unreasonable and erroneous as being impracticable or mathematically impossible to enforce or administer." The act contains, among others, the following provisions:
"An Act to provide for levying and collecting a tax on net incomes in this State, to provide how returns shall be made, how the tax shall be paid, and to fix penalties for violation hereof; and for other purposes. * * *
"Section 1. On the net income of every person, firm, or corporation residing or doing business in this State, except insurance companies which pay to the State a tax upon premium income, after making such deductions as are allowed by the laws of the United States in the system by them adopted for determining net incomes and such increases and deductions as are hereinafter provided for in determining a proper taxable income, there shall be levied and collected by the State of Georgia an income tax similar to that of the United States, but at the rate and according to the scale hereinafter set forth; the same to be returned, calculated, ascertained, and paid according to the system and rules hereinafter set forth.
"Sec. 2. Whenever any such person, firm, or corporation residing or doing business in this State makes an income-tax return to the United States, or is legally bound so to do, such person being hereinafter briefly referred to, for convenience, as a taxpayer, it shall be his duty to make at the same time a like return to the State of Georgia and file the same with the State Tax Commissioner for the purpose of a State tax on income. Such duplicate return shall furnish the same information as is contained in his return to the United States, shall be made on a blank form to be furnished by the Tax Commissioner, and shall ascertain the taxable net income in the same way as in the return to the United States; but before ascertaining the net in come taxable by the State, the following changes shall be made:
"1. To the amount ascertained under the laws of the United States as the net income taxable by the United States, there shall be added in said return the gross amount of any salary received by the taxpayer during the tax year, or accrued to him during said period as a public official or employee of the State, or of any county, municipal corporation, or other political division thereof, and the net amount of any fees, perquisites, or other emolument from said sources or any of them, paid to him during the same period for official compensation, except in the cases of the Governor of the State...
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