Warestores, Inc. v. Nash

186 S.E.2d 806, 125 Ga. App. 210, 1971 Ga. App. LEXIS 783

• Court: Court of Appeals of Georgia
• Decided: November 30, 1971
• Docket: 46365
• Status: Published

Opinions

Bell, Chief Judge.

This is a suit brought by appellants, Warestores, Inc., and the trustees of two employee pension trusts, to recover a tax on intangible personal property on the ground that taxes had been erroneously and illegally assessed and collected.

It is undisputed that appellant Warestores, Inc., issued long term promissory notes to the appellants, trustees of the respective employee pension trusts. Both of these trusts are exempt from Federal income tax under § 501 (a) (formerly § 165 (a)) of the Internal Revenue Code of 1954. The notes were secured by real property located in DeKalb and Cobb Counties. The appellant Warestores paid under protest the tax imposed on the long term notes held by the trustees by Section 4 of the Intangible Property Tax Act of December 22, 1953 (Ga. L. 1953, Nov. Sess., pp. 379, 383; Code Ann. § 92-164). Warestores filed a claim for refund with the State Revenue Commissioner under Ga. L. 1956, p. 720 (Code Ann. §92-178.2), which was denied.

We need not reach the question which is posed in the second enumeration concerning whether appellants have standing to sue, because assuming arguendo that they do, they (the appellants) are not entitled to any exemption from the tax imposed. They claim that they are exempt from the payment of this tax by virtue of the Act, approved March 3, 1953 (Ga. L. 1953, pp. 453, 454; Code Ann. § 92-123) which grants an exemption from including in the annual intangible property tax return and payment of the tax on all intangible personal property belonging to any trust exempt from Federal income taxes under § 165 (a) of the Internal Revenue Code. As previously noted, the statutory authority for the assessment of the tax in issue here is found in the Intangible Property Tax Act of 1953, a statute which was enacted after the provisions of law cited supra by which the appellants claim they were granted an exemption. The exemption from taxation must be strictly construed, and the exemption will not be held to be conferred unless the terms under which it is granted clearly and distinctly show that it was the intention of the legislature. Cherokee Brick &c. Co. v. Redwine, 209 Ga. 691, 693 (75 SE2d 550). Subsection 1 (a) of the Intangible Property Tax Act of 1953 imposes an annual tax on all personal property "classified for taxation as intangible property” by the Act to classify property for taxation, approved December 27, 1937, as amended (Ga. L. 1937-38, Ex. Sess., p. 156). Subsection 1 (b) exempts intangible personal property owned by pension trusts exempt from Federal income tax under Section 165 (a) of the Federal Internal Revenue Code from this annual tax imposed by subsection 1 (a). The tax in issue here is not the annual tax on intangibles under subsection 1 (a) but is a one time assessment under Section 4 on long term notes secured by real estate which is made at the time of recordation of the security instrument which secures the note. The exemption granted in the Act of March 3, 1953, supra, is an exemption from the annual taxation of intangibles, the very same exemption granted by subsection 1 (b) of the Intangible Property Tax Act. The March 3, 1953 Act concerns the filing of annual intangible returns and exempts intangibles owned by pension trusts exempt from Federal income taxation from both returning the property and the payment of the annual tax on intangibles. Thus both Acts are consistent with one another and there can be no implied repeal of the earlier Act. Read together they show a clear intention of the legislature not to exempt long term notes secured by real estate from the tax imposed at time of recordation of the security instrument.

Argued June 28, 1971 Decided November 30, 1971 Rehearing denied December 17, 1971 King & Spalding, Jack H. Watson, Jr., Herschel M. Bloom, for appellants. George P. Dillard, Herbert O. Edwards, Robert E. Mozley, Arthur K. Bolton, Attorney General, Harold N. Hill, Jr., Executive Assistant Attorney General, Richard L. Chambers, Assistant Attorney General, Edwards, Bentley, Awtrey & Parker, A. Sidney Parker, for appellees.

Section 18 of the Intangible Property Tax Act states: "Notwithstanding any other provision of this Act to the contrary, it is the intention of the General Assembly of Georgia that long term notes secured by real estate shall be taxed.”

Judgment affirmed.

Deen, J., concurs. Pannell, J., concurs in the judgment only.