Brown & Co. Jewelry Inc. v. Fulton County Bd. of Assessors

Consigned merchandise owned by out-of-state residents was subject to ad valorem taxation, even though the merchandise was in the county on a temporary basis only.

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This case involves the application of Georgia ad valorem tax to an agent for consigned merchandise owned by out-of-state residents but offered for sale in Fulton County. The local jewelry store where the merchandise was offered for sale challenged the inclusion of items under consignment in its assessment. It claims that the merchandise cannot be taxed because it was only temporarily in Georgia. The Superior Court of Fulton County determined that the tax assessment properly included the consigned goods, and the jewelry store appeals. We hold that the plain statutory language authorizes assessment of the consigned goods and the fact that the store kept some of the items temporarily does not mean that the tax was applied unconstitutionally.

Brown and Company Jewelry, Inc., a Georgia corporation in business since 1974, owns and operates a business in Fulton County. Part of Brown’s inventory consists of store-owned property and part consists of consignment items belonging to companies located in other states. Brown either sells the jewelry, giving the consignor the “reference price” as indicated on the contract, or returns the jewelry to the consignor. Industry standard contracts provide that the jewelry remains the property of the consignor, who can recall it at any time. The consignment jewelry typically spends from 3 to 90 days at Brown’s store before either being sold or returned. As Frank Brown explained, displaying the consignment jewelry constituted “good window dressing for us” because it offered potential buyers other purchase options and increased the appearance of store inventory when the store-owned jewelry became depleted. For example, at the end of December 1995, the store had $1,385,038 in consigned jewelry on hand for sale. By the end of January 1996, the store still had most of the consigned jewelry and had sent back $440,268 worth.

Brown & Co. Jewelry Inc. v. Fulton County Bd. of Assessors

Consigned merchandise owned by out-of-state residents was subject to ad valorem taxation, even though the merchandise was in the county on a temporary basis only.

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