Georgia Dept. of Revenue v. Roof

Sovereign immunity barred the plaintiffs' action, because the suit was a tax refund action on behalf of other taxpayers alleged to be similarly situated and the General Assembly has refused to extend the waiver of sovereign immunity to such actions.

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Plaintiff William A. Roof and others filed this action against the Georgia Department of Revenue and five natural gas companies seeking i a declaration that they did not owe sales tax on certain service charges on their natural gas bills, ii the certification of a class including all Georgia consumers of natural gas, and iii a preliminary injunction requiring the gas companies to pay over the taxes already collected to the trial court. Plaintiffs did not allege any constitutional violation by the Department, but only that the service charges were exempt from taxation under OCGA § 48-8-2 8 and 48-8-3 18.1 The Department moved to dismiss on grounds of sovereign immunity. The trial court denied the motion and reserved ruling on class certification and the preliminary injunction. We reverse because sovereign immunity bars this action. The Georgia Constitution provides that “the sovereign immunity of the state and its departments and agencies can only be waived by an Act of the General Assembly which specifically provides that sovereign immunity is thereby waived and the extent of such waiver.” Emphasis supplied. 1983 Ga. Const., Art. I, Sec. II, Par. IX e.

According to the Supreme Court of Georgia, “the General Assembly has expressly refused to extend the waiver of sovereign immunity in an action for sales tax refund to a taxpayer acting in a representative capacity for fellow taxpayers.” Sawnee Elec. Membership Corp. v. Ga. Dept. of Revenue , 279 Ga. 22, 25 3 608 SE2d 611 2005. This refusal took the form of a 2003 amendment to the tax refund statute, OCGA § 48-2-35, in a new subsection b 5: “An action for a refund . . . may not be brought by the taxpayer on behalf of a class consisting of other taxpayers who are alleged to be similarly situated.” Ga. L. 2003, p. 355, § 2. Subsection b 5 was redesignated as subsection c 5 in 2005. See Ga. L. 2005, p. 159, § 5.

Georgia Dept. of Revenue v. Roof

Sovereign immunity barred the plaintiffs' action, because the suit was a tax refund action on behalf of other taxpayers alleged to be similarly situated and the General Assembly has refused to extend the waiver of sovereign immunity to such actions.

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