City of Atlanta v. Victoria Corp.

Stolz, Judge. The City of Atlanta had summons issued requiring Victoria Corp. and B-X Corp. to appear in the Municipal Court of the City of Atlanta for allegedly doing business in Atlanta without having first registered for a business license. Both corporations were found guilty, fined $200, and directed to comply with the business license ordinance. The Superior Court of Fulton County, through Judge Charles A. Wofford, sustained a petition for certiorari by both corporations and held that the business license tax as applied to this factual situation was "upon the mere ownership of land, and that it is therefore unlawful.” The City of Atlanta appeals. Prior to the trial in the Municipal Court of the City of Atlanta, the parties entered into a stipulation of facts; the pertinent parts of which read, "Any person shall be deemed to be engaged in business and thus subject to the requirements of this ordinance when real property owned by such person is offered for rent or rented, when such person performs any act of selling any goods or services or solicits business or offers goods or services for sale for payments primarily in attempt to make a profit include in sales or services of the character as made by a wholesaler or retailer or involved in any of the functions performed as manufacturer; all of the foregoing either as a [sic] owner, operator, or agent in any business, trade, profession, or occupation within the city. [Code of Ordinances of the City of Atlanta, Georgia] Chapter 17, Appendix 1, Section 2. Definitions. Paragraph O, Engaged in Business.” The parties also stipulated the municipal ordinance which was being applied to the defendant corporations. The record further reveals that both corporations are closely held family corporations, which were organized by Thomas B. West for the benefit of his children. Mr. West does not own any stock in either corporation, but does serve as President of B-X Corp. Mr. West is an attorney at law and maintains a law office in the City of Atlanta. Within this office, Mrs. Thelma Y. Wood is employed by [34] "Thomas B. West, Attorney at Law, Client Money Account.” Mrs. Wood is also the Secretary-Treasurer of both corporations. The moneys collected by both corporations are deposited to the "Thomas B. West, Attorney at Law, Clients’ Money Account.” Mrs. Wood, as an employee of "Thomas B. West, Attorney at Law, Clients’ Money Account,” is paid a 10% commission on the moneys collected for her services. Mrs. Wood keeps both corporations’ books in her home (outside the city), but brings them into the city to work on them in Mr. West’s law office. We cannot accept the appellees’ view that the two corporations are not doing business within the city because corporate moneys are collected by the attorney for his clients. The record shows that the moneys due are collected by the corporate treasurer (Mrs. Wood), an employee of "Thomas B. West, Attorney at Law, Clients’ Money Account,” who is paid exclusively a commission on the moneys collected and deposited to that account. There is no evidence in the record that Mrs. Wood at any time was an employee of Thomas B. West, attorney at law. "A tax on a business or occupation because measured by the number of pieces of property used in said business or occupation, although the pieces of property are subject to ad valorem taxation, is not a tax on property within the meaning of that term as used in the const., art. 7, sec. 2, par. 1 (Code § 2-5001), declaring that taxation shall be ad valorem upon all property, but is merely a tax on the business or occupation. Goodwin v. Savannah, 53 Ga. 410; Davis v. Macon, 64 Ga. 128 (37 Am. R. 60); Sawtell v. Atlanta, 138 Ga. 687 (75 SE 982); Price v. Richardson, 159 Ga. 299 (125 SE 449). It follows that a tax on sales, which may constitute a part or all of the business of the party taxed, is not a tax on property within the meaning of the constitution, merely because the tax is measured by the accounts receivable resulting from sales.” City of Atlanta v. Georgia Milk Producers Confederation, 187 Ga. 117, 118 (1) (200 SE 712). "By the same reasoning we hold that a business tax measured by gross revenue is not a tax on income. See also Atlanta Nat. Bldg. &c. Assn. v. Steward, 109 Ga. 80 (35 SE 73) and Mutual Reserve Fund Life Assn. v. City Council of Augusta, 109 Ga. 73 (35 SE 71), where it [35] was held that a tax measured by the gross receipts of a business is an occupation or business tax.” Pharr Road Investment Co. v. City of Atlanta, 224 Ga. 752, 755 (2) (164 SE2d 803). Argued February 25, 1975 Decided June 6, 1975. Henry L. Bowden, Ralph C. Jenkins, John E. Dougherty, for appellant. Durwood T. Pye, Tom Pye, for appellee. This case is controlled by the principles of law stated in the two cases cited above. The municipal ordinance is valid and the Supreme Court has so held in the Pharr Road case, supra. A corporation, like an individual should not be permitted to do indirectly what it cannot legally do directly. The judgment of the Superior Court of Fulton County is reversed. Judgment reversed. Bell, C. J., Pannell, P. J., Clark, Quillian and Webb, JJ., concur. Deen, P. J., Evans and Marshall, JJ., dissent.