X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

In this tax case of first impression, the Commissioner of the Georgia Department of Revenue the “Commissioner” issued a $224,800 additional tax assessment against Trawick Construction Company, Inc. “Trawick” on January 13, 2004, as to the short-tax-year January 1, 1999 to October 1, 1999. On August 16, 2004, following Trawick’s appeal to the Office of State Administrative Hearings, an administrative law judge “ALJ” issued his Initial Decision finding that Trawick “demonstrated beyond a preponderance of the evidence that the Commissioner’s assessment of additional corporate Georgia income taxes on the proceeds of the Trawick stock transfer at issue was erroneous.” The Commissioner thereafter reversed the Initial Decision of the ALJ. Trawick petitioned for judicial review, and the superior court reversed, returning the case to the status quo ante, reinstating the ALJ’s decision. After we granted its application for discretionary review, the Department of Revenue the “Department” filed its appeal, contending that the superior court erred i in rejecting the Commissioner’s finding of fact that Trawick had elected tax treatment under 26 U.S.C. § 338 h 10 “Section 338 election”, such treatment relieving Trawick of federal tax liability as to the gain it realized upon the sale of its stock and characterizing the sale of its stock as a “deemed sale”1 of all its assets, ii in finding that Georgia’s statutes do not tax such gain because Trawick’s stock was sold pursuant to a Section 338 election made by Trawick’s shareholders, and iii in finding that the additional tax assessment was constitutionally barred. Finding that the gain realized by Trawick as a result of the deemed sale of its assets is taxable under Georgia law, we reverse. In broad terms, this case raises a question of law as to whether the Section 338 election at issue relieves Trawick of corporate tax liability under Georgia law as to the gain realized upon the proceeds from the deemed sale of its assets. “Erroneous applications of law to undisputed facts, as well as decisions based on erroneous theories of law, are subject to the de novo standard of review. Cit.” Trent Tube v. Hurston , 261 Ga. App. 525 583 SE2d 198 2003.

From its formation in 1960 through October 1, 1999, Trawick was a closely-held Florida corporation, and Trawick’s shareholders, directors, and officers were all members of the Trawick family. Trawick was in the telecommunications business and did business in Florida, Alabama, Arkansas, Louisiana, Mississippi, North Carolina, South Carolina, and Georgia.

 
Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.

More From ALM

With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas.
View Now
Our Team Account subscription service is for legal teams of four or more attorneys. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team.
View Now
Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. Our second option allows you to build your bundle and strategically select the content that pertains to your needs. Both options are priced the same.
View Now
May 01, 2025
Atlanta, GA

The Daily Report is honoring those attorneys and judges who have made a remarkable difference in the legal profession.


Learn More
February 24, 2025 - February 26, 2025
Las Vegas, NV

This conference aims to help insurers and litigators better manage complex claims and litigation.


Learn More
March 24, 2025
New York, NY

Recognizing innovation in the legal technology sector for working on precedent-setting, game-changing projects and initiatives.


Learn More

SALARY: $8,000.69 Biweekly$17,334.83 Monthly$208,017.95 AnnuallyOPENING DATE: 01/29/2025CLOSING DATE: 02/27/2025 11:59 PM PacificDEFINITION/...


Apply Now ›

Our client is seeking to hire a supervisory attorney for their growing Alabama team. Qualified candidates will have 8+ years of litigation...


Apply Now ›

Our client , is seeking to hire a mid-senior attorney for their growing Alabama team. Qualified candidates will have 4+ years of litigatio...


Apply Now ›