Court Says Cell Companies Can Seek Sales Tax Overpayments
The decision removes a roadblock to $6 million in sales tax being refunded to cellphone customers.
April 16, 2018 at 01:28 PM
3 minute read
The Georgia Supreme Court on Monday, upending what it called an “illogical” decision by the state Department of Revenue, ruled that five AT&T subsidiaries can apply for a refund of sales tax overpayments without first sending money back to customers.
The decision removes a roadblock to $6 million in sales tax being refunded to cellphone customers. Presiding Justice Harold Melton said it was reasonable to allow the company to first find out if it can obtain the refund before paying the sums back to customers.
On the losing end of the decision is the Georgia Department of Revenue, defended by the Office of Attorney General Chris Carr. Carr declined to comment.
The winners are New Cingular Wireless, Chattanooga MSA, Georgia RSA and Northeastern Georgia RSA. Their local counsel is Bryan Vroon. Vroon referred an inquiry to AT&T spokesman Marty Richter.
” We're pleased with the ruling,” Richter said by email. “We don't stand to benefit from this lawsuit in any way. Any refunded taxes will be passed along to our Georgia customers, who initially paid the taxes.”
According to the court, the revenue department took five years to deny a request for a refund from the AT&T companies that had collected and paid sales tax for internet data services that were exempt. In the original denial, the department offered no reason, Melton said in a footnote on his first page. The AT&T subsidiaries sued. The department moved to dismiss the case for several reasons, one of which was its interpretation of a global settlement agreement to mean the companies would have to repay the tax collections to customers before applying for a refund from the state.
Melton said that position was unreasonable and made no sense.
“A simple hypothetical highlights the unfairness of the Department's interpretation,” Melton said. “Assume Dealer X collected $100 million in sales tax from customers and paid this amount to the Department erroneously. Later, Dealer X wished to seek a refund of these erroneously paid taxes. Dealer X would be required to refund $100 million to its customers just to initiate the process of seeking a refund from the Department. This would have to be done long before Dealer X knew whether the Department would approve any refund at all—an answer that the Department might not give for years.”
Even then, the hypothetical example continues, the company “would have to prepay $100 million to its customers to potentially be told by the Department that no refund was due at all. If the actual amount of the refund turned out to be less than $100 million, the Department would offer no real solution that would make Dealer X whole.”
Melton said the revenue department's position is “illogical, and creates a strong disincentive for dealers to seek refunds on behalf of customers,” which “undercuts the clear intent” of the law.
The law in question is OCGA § 48-2-35, which ensures that overpaid or illegally collected taxes are returned to taxpayers, Melton said.
The decision was unanimous but different from the usual vote. Justice Nels Peterson did not participate. Justice Britt Grant was disqualified. Both justices formerly served as solicitor general in the Office of Attorney General. Substituting for the missing justices were Atlantic Judicial Circuit Judge D. Jay Stewart and Southern Judicial Circuit Judge James Tunison. They concurred.
The case is Cingular v. Georgia Department of Revenue, No. S17G1256.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllOn the Move: Hunton Andrews Kurth Practice Leader Named Charlotte Managing Partner
6 minute readPaul Weiss’ Shanmugam Joins 11th Circuit Fight Over False Claims Act’s Constitutionality
Atlanta Attorneys Rely on Google Earth, YouTube for Evidence in $6M Faulty Guardrail Settlement
Trending Stories
- 1Recent Decisions Regarding the Telephone Consumer Protection Act
- 2The Tech Built by Law Firms in 2024
- 3Distressed M&A: Mass Torts, Bankruptcy and Furthering the Search for Consensus: Another Purdue Decision
- 4For Safer Traffic Stops, Replace Paper Documents With ‘Contactless’ Tech
- 5As Second Trump Administration Approaches, Businesses Brace for Sweeping Changes to Immigration Policy
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250