The Georgia Code authorizes a four percent state sales and use tax and a one percent joint county and municipal sales and use tax ("local option tax") upon certain transactions. 1
The taxpayer in this case, C. W. Matthews Contracting Company ("Matthews"), purchased certain equipment in Cobb County and paid the state sales and use tax there. Later, Matthews used the equipment in other Georgia counties. The issue before us is whether OCGA 48-8-82
prohibits the State Revenue Commissioner from assessing a local option tax on Matthews's use of the equipment in other counties, where the use created no state tax obligation. Relying on that Code section's provision that a transaction "not subject to" the state tax may not be subject to the local option tax, Matthews argues that the assessment is not authorized. Construing 48-8-82
together with the other statutes on the same subject matter, however, we conclude that the legislature did not intend to prohibit the local option tax under these circumstances.
defines the counties' and municipalities' authority to impose the local option tax:
Except as to rate, the joint tax shall correspond to the tax imposed and administered by Article 1 of this chapter. No item or transaction which is not subject to taxation by Article 1 of this chapter shall be subject to the tax levied pursuant to this article, except that the joint tax provided in this article shall be applicable to sales of motor fuels as that term is defined by Code Section 48-9-2
The trial court relied on the highlighted language in concluding that 48-8-82
bars local option taxes where the taxed transaction creates no state sales and use tax obligation. The trial court reasoned that because Matthews actually incurred no state sales and use tax by using the equipment in other counties, having paid the state tax when it purchased the equipment in Cobb County, there was nothing with which a local option tax could "correspond" under 48-8-82
. The Court of Appeals reversed, 2
holding that the legislative intent of 48-8-82
was to restrict the local tax to the same types of items and transactions defined as subject to the state tax, and not to limit the imposition of local tax to those instances in which the state tax must actually be paid. 3
We agree with the Court of Appeals.
1. The Court of Appeals' interpretation of 48-8-82
is mandated when that Code section is read and considered together with the related statutes in the remainder of Chapter 8 of Title 48. 4
Nowhere does Article 2 of Chapter 8, the local option tax article, itself define the type of item or transaction upon which the local tax may be imposed, or set forth when a qualified item or transaction may be taxed. The legislature clearly relied on Article 1 of Chapter 8, the state sales and use tax article, to fill these gaps by stating in 48-8-82
that a local option tax must "correspond" to the state sales and use tax, and by providing in 48-8-87
that a local option tax is to be administered and collected "in the same manner and subject to the same applicable provisions, procedures, and penalties provided in Article 1." 5
Consistently, by stating that a taxing authority may not impose a local option tax upon "any item or transaction not subject to taxation under Article 1," 6
the legislature simply incorporated into Article 2 the many exemptions to the state tax expressed in Article 1. 7
The statement in 48-8-82
that the local option tax applies to sales of motor fuels, an item Article 1 expressly exempts, 8
also evidences this intent.
Further, the trial court directly contradicted OCGA 48-8-90
. Under the trial court's interpretation, only the county where the taxpayer purchased the subject property could ever impose a local option tax, because the state would assess the one-time state sales and use tax in that county alone. Section 48-8-90
, however, clearly contemplates that more than one local taxing jurisdiction may impose a local option tax by permitting a taxpayer to credit the amount of local option tax paid in one jurisdiction against the subsequent imposition of a local option tax on that same property by another jurisdiction. 9
2. Matthews also contends that the Court of Appeals erred in holding that the tax in this case is not barred by OCGA 48-8-93
which exempts retail sales under certain conditions from the local option tax. This contention has no merit, as nothing in 48-8-93
affects the authority to impose the local option tax on other taxable transactions, such as use, which is the transaction at issue in this appeal. 11
3. Matthews further argues that the Court of Appeals decision conflicts with C. W. Matthews Contracting Co. v. Collins 12
and Collins v. Lunda Constr. Co., 13
wherein the Court of Appeals ordered refunds under OCGA 50-17-29
(e) of local sales and use taxes collected in connection with highway construction performed by the taxpayer for the State Department of Transportation. In this case, however, Matthews does not contend that the assessment was based on work performed for the state, and 50-17-29
(e) does not apply.
Bruce L. Bromberg, Walter E. Sumner, Susan M. Pruett, James F. Grubiak, amici curiae.