Blackmon v. Cobb County-Marietta Water Authority

Eberhardt, Presiding Judge.

The taxpayer did not, during the periods involved, enjoy an exemption from the payment of the sales and use taxes.¹

Section 2 (a) of the Sales and Use Tax Act (Code Ann. § 92-3402a) imposes the tax upon "every purchaser of tangible personal property at retail” and when the tax has not been paid to the seller by the purchaser, the purchaser is liable for the payment of the tax as a use tax. Section 3(a) of the Act (Code Ann. § 92-3403a) defines a retail sale to be "A sale to a consumer or to any person for any purpose other than for resale in the form of tangible personal property, or services taxable-under this Chapter ...” A person is defined by this section to include "any individual, firm, co-partnership, cooperative, nonprofit membership corporation, joint adventure, association, corporation, estate, trust, business trust, receiver, syndicate or other group or combination acting as a unit, body politic or political subdivision, whether public or private, or quasi-public, and the plural as well as the singular number.” (Emphasis supplied.)

There is an exemption under Code Ann. § 92-3403a (C) (2) (d) of "sales to the Federal Government, the State of Georgia, or any county or municipality of said State.”

Thus, unless an exemption can be found in some other provision of the tax Act or in the Act creating the Authority, sales to it are taxable, for it is neither a county nor a municipality.

There is ample authority that sales to an Authority are taxable. City of Marietta Hospital Authority v. Redwine, 87 Ga. App. 629 (74 SE2d 670); Oxford v. Housing Authority of the City of Barnesville, 104 Ga. App. 797 (123 SE2d 175); Carroll City-County Hospital Authority v. Oxford, 104 Ga. App. 213 (121 SE2d 387); Undercofler v. Hospital Authority of Forsyth County, 221 Ga. 501 (145 SE2d 487).

Nor is appellee exempt from the tax under the provisions of § 3 (C) (2) (t) of the Act (Ga. L. 1966, pp. 211, 212; Code Ann.§ 92-3403a (C) (2) (t), which exempts "Transactions wherein tangible personal property is furnished by the Federal Government or by a county or municipality of this State to any person, firm or corporation which contracts to perform services for any such governmental entity for the installation, repair or extension of any public water, gas or sewage system of such entity, notwithstanding the provisions of § 92-3448a or any other provisions of this Chapter . . .”

It does not appear that any of the personal property in the transaction on which the tax has been assessed was furnished by the Federal Government or by any county or municipality to contractors for use in installing, repairing or extending appellee’s system.

It is well settled that an exemption or a claim of exemption must be construed strictly against the taxpayer and in favor of the taxing authority. Oxford v. J. D. Jewell, Inc., 215 Ga. 616, 619 (112 SE2d 601).

No statute or provision of any statute has been directed to our attention under which we can find that appellee is entitled to the exemption claimed.

Appellee relies upon Section 8 of the Act creating the Cobb County-Marietta Water Authority (Ga. L. 1951, pp. 497, 504) as a basis for the claimed exemption. That section provides: "Such bonds [of the Authority] and the income thereof shall be exempt from all taxation within the State.” That exemption obviously has reference to a tax on intangibles as to the bonds and income tax as to the interest thereon. It neither can nor does have reference to sales of tangible personal property to the Authority. A tax on sales is not a tax on property. City of Atlanta v. Ga. Milk Producers Confederation, 187 Ga. 117, 118 (200 SE 712).

We can find no other provision in the Act creating the Authority which purports to grant any tax exemption on any account or in any respect.

’ Was the assessment such a disparate treatment of this Authority as to render it unconstitutional under the Fourteenth Amendment to the Constitution of the United States, or of Art. I, Sec. I, Par. II of the Constitution of Georgia (Code Ann. § 2-102, equal protection), or of Art. VII, Sec. I, Par. Ill of the Constitution of Georgia (Code Ann. § 2-5403, requiring uniformity of taxation against the same class of subjects)? We think not.

Appellee contends that since the Clayton County Water Authority and the Bibb County Water & Sewage Authority are not assessed sales taxes on their purchases of personal property, the assessment against it runs afoul of these constitutional provisions.

If there is a disparity, it results not from any action of the Revenue Commissioner in making this assessment, but in the provisions of the Acts creating the Clayton County and the Bibb County Authorities, in each of which the Authority is made a division or a part of the governmental arm of the county. Moreover, uniformity in taxation does not mean universality. Nash v. Nat. Preferred Life Ins. Co., 222 Ga. 14, 19 (148 SE2d 402). And if the tax is applicable to all similar Authorities, it cannot be held to be an unconstitutional discrimination where the Commissioner has, because of a misconstruction of the law, failed to assess one other than the taxpayer presently involved. "A taxpayer cannot protect himself against a legal and proper demand for his own taxes, by alleging that another taxpayer has been assessed for taxation in a way to render his taxes less than they ought to be under a proper administration of the law.” Ga. Midland &c. R. Co. v. State, 89 Ga. 597 (2) (15 SE 301). As the court pointed out in that case even if the allegations were shown to be true, "this would show nothing more than that the law has been misconstrued or misapplied as touching [the other taxpayer].” The same is true here. If the Commissioner has misconstrued or misapplied the Acts creating the Clayton County and the Bibb County Authorities, and on that basis has failed to assess taxes on their purchases of personal property, that is not a good defense to an assessment of taxes which are legally owed by the Cobb County-Marietta Authority.

If the Cobb County-Marietta Water Authority can be said to be an arm of the county and city it is not in position to urge the denial of equal protection (Ellington Co. v. City of Macon, 177 Ga. 541 (1b) (170 SE 813)), since in that event it is a creature of the State which does not enjoy the privileges and immunities afforded to its citizens. Williams v. Baltimore, 289 U. S. 36 (53 SC 431, 77 LE 1015). It must look to the provisions of the Act creating it and to such general laws as may apply, for all of its rights, privileges and immunities.

We do not doubt that the General Assembly might, in its wisdom, have afforded an exemption that would apply to appellee if it had chosen to do so. See Culbreath v. Southwest Ga. Regional Housing Authority, 199 Ga. 183 (3) (33 SE2d 684). Indeed, it has been done as to hospital Authorities by Ga. L. 1964, pp. 499, 599 (Code Ann. § 88-1803) and it has been held that this does not violate the requirement of uniformity. Undercofler v. Hospital Authority of Forsyth County, 221 Ga. 501, supra. But for the periods here involved no exemption had been extended to appellee.

The trial court erred in sustaining appellee’s motion for summary judgment and in denying that of appellant.

Judgment reversed with direction that the appellant’s motion for summary judgment be granted.

Bell, C. J., Hall, P. J., Pannell, Deen, Quillian, and Clark, JJ., concur. Evans, J., dissents. Stolz, J., not participating.

1 An amendment to the Act creating the Authority adopted by the General Assembly at the 1972 session, Act No. 1181 (H. B. No. 2002, Ga. L. 1972, p. 3208), by which it is granted an immunity from payment of sales and use taxes is not retroactive and cannot affect its liability for the periods here involved.