FI FTH DI VI SI ON

DI L LA RD, P. J.

, REESE and BETHEL, JJ.

N O T IC E : M otions for r e c ons i de r a tion m us t be

ph y sic a l ly r e ce iv ed i n our c le r k ’s offic e w ithin te n

da y s of the da te of de c is ion to be de e m ed tim e ly file d.

http://w w w .ga a ppe a l s .us /r ule s

Febr uar y 21, 2017



# I n th e Co u r t o f

A p p eals o f

G eo r g ia

A1 6 A2 00 3

. N EW CINGULAR W IRELESS PCS, L LC e t al

. v

. GEORGIA DEPARTM ENT OF REVENUE et al

.

D I LLA R D , Pres i d i n g J u d g e.

New Ci n g u l ar W i rel es s PCS, LLC; Ch at tan o o ga M SA LP; Geo rg i a RSA No

.

3

, LP; an d No rt h eas t ern Geo rg i a RSA Li m i t ed Part n ers h i p (“ ap p el l an t s ”) fi l ed s u i t

ag ai n s t th e Geo rg i a Dep art m en t o f R e v e n u e an d Ly n n et t e T. Ri l ey i n h er o ffi ci al

cap aci t y as co m

m is s i o n er (“ t h e Dep art m en t ”) fo l l o wi n g th e Dep art m en t ’ s refu s al to

i s su e a refu n d o f w h a t t h e ap p el l an t s co n t en d were erro n eo u s l y p ai d t ax es

. Th e

Dep art m en t m ov ed t o d is m i s s t h e ap p el l an t s ’ act i o n, an d t hi s ap p eal fo l l o w s t h e t ri al

co u rt ’ s g ran t o f t h at m o ti o n . Fo r t h e reas o n s s et fo rt h in f r a , we affi rm

.

Th e ap p el l an t s al l eg e th at fro m 2 0 0 5 u n t i l 2 0 1 0

, t h ey s o l d wi r e l e s s In t ern et

acces s serv i ces t o Geo rg i a cu s to m ers

, wh i ch were ex em p t fro m s t at e s al es t ax u n d erOCGA § 4 8 -8 -2

. 1 In No v em b er 2 0 1 0, t h e ap p el l an ts fi l ed refu n d cl ai m s w i t h t h e

Dep art m en t fo r sal es t ax t h at t h ey cl ai m ed was

, u nt i l Sep t em b er 2 0 1 0, erro n eo u s l y

ch arg ed t o Geo rg i a cu s t o m ers o n t h e p u rch as e o f wi rel es s In t ern et acces s serv i ce. Th e

Dep art m en t o ffi ci al l y refu sed t o p ay t h e req u es t ed refu n d cl ai m s o n March 19

, 2 0 1 5.

Acco rd in g ly

, o n Ap ri l 1 7, 2 0 1 5

, t h e ap p el l an t s fi l ed t h ei r co m p l ai n t t o ch al l en g e t h i s

d en ial

.

Th e Dep art m en t an s wered an d m o v ed t o d i s m i s s f o r a l ack o f su b

ject -m at t er

ju ri s d i ct i o n an d t h e fai l u re t o s t at e a cl ai m u p o n w h i c h rel i ef co ul d b e g ran t ed

.

Th ereaft er, t he D ep art m en t am en d ed i t s an swer an d at t ach ed as an ex h i b it a co p y o f

a g lo b al s et tl em en t ag reem e n t en t ered i n t o b et ween t he ap p el l an ts an d t h ei r

cu s t o m ers . Th e Dep art m en t arg u ed t h at t h e co m p l ai nt s h o u l d b e d i s m i s s ed b ecau s e

(1 ) th e ap p el l an t s d id no t rei m b u rs e t h e al l eg ed i l l eg al ly co ll ect ed s al es t ax to

cu s t o m ers befo re s eek i n g a refu n d fro m t h e Dep art m en t

, i n v i o lat i o n o f Dep art m en t

Reg ul at io n 5 6 0-1 2-1 -.2 5 ; (2 ) t h e ap p el l an t s l ack ed s tan d i n g t o fi l e s al es -t ax -refu n d

cl ai m s o n b eh al f o f cu s t o m ers fo r p eri o d s p ri o r t o M ay 5

, 2 0 0 9 ; an d (3 ) t h e act i o n was

b arred b y Geo rg i a cl as s-act i o n law. Fo l l o wi n g a h eari n g o n t h e m o t i o n t o d i s m i s s

, t h e

1 S ee OCGA § 4 8-8 -2 (3 9 ) (F) (s p eci fy i n g t hat

, fo r p u rp o s es o f s t at e s al es an d

u s e t ax , “ t el eco m

m u n icat i o n s s erv i ce” s h al l n o t i n cl u d e, i n t er a l ia

, “ In t ern et acces s

s erv i ce”).

2t ri al co u rt g ran t ed i t o n al l t h ree g ro u n ds

. W e t h en gran t ed t h e ap p el l an t s ’ ap p l i cat i o n

t o fi l e a d i s cret i o n ary

ap p eal . Th i s ap p eal fo l l o ws

.

1

. Th e ap p el l an ts arg u e t h at t h e t r i a l c o u rt erred i n g ran t i ng t h e m o t i o n to

d i s m i s s aft er co n cl u d i n g t h at t h ey m u s t fi rs t refu n d t he al l eg ed erro n eo u sl y co l l ect ed

t ax t o t h ei r cu s t o m ers b ef o r e s eek i n g a refu n d fro m t he Dep art m en t . W e d is ag ree.

Th e t ri al co urt ’ s o rd er co n tem p l at es t h e q u es t i o n o f d i s m i s s a l u n d e r b o th

s o v erei g n i m

m u n i t y / su b ject -m at t er ju ri s d i ct io n an d t h e fai l u re t o s t at e a cl ai m u p o n

w h i c h rel i ef can b e g ran t ed

, b ut i t ap p ears t o u l t i m at el y co n cl u d e th at d i s m i s s al i s

p ro p er o n t he g ro u n d s o f s ov erei g n i m m u n it y

. Nev ert h el es s, we m ay affi rm t h e g ran t

o f a m o t i o n t o d i s m i s s i f i t i s ri g h t fo r an y reas o n

. 2 An d s et t i ng as i d e t h e q u es t i o n o f

wh et h er ap p el l an ts ’ act i on is al s o b arred o n t h e g ro u nd s o f s o v erei gn i m m u n i t y

, i t i s

u n d o u b t e d l y b arred by a fai l u re t o st at e a cl ai m up o n wh i ch rel i ef can b e g ran t ed

b ecau s e (1 ) “ t h e al l eg at io n s o f t h e co m p l ai n t d i scl o s e w i t h ce r t a i n t y t h at t h e

[ap p el l an t s ] wo u l d n o t b e en t i t l ed to rel i ef u n der an y s tat e o f p ro v ab l e fact s as s ert ed

2 S ee, e.g

. , B o b i ck v. Cmt

y. & S

. Ba n k

, 3 2 1 Ga. Ap p

. 8 5 5

, 86 9 -7 0 (4 ) (b ) (7 4 3

SE2 d 5 1 8 ) (2 0 1 3) (affi rm in g d i s m i ss al u n d er “ ri g ht fo r an y reas o n ” d o ct ri n e); C.C.

Lea si n g Co r

p

. v. Bd

. o f Ta x As s es s o r

s o f H a l l C n t y

., 1 4 3 Ga. Ap p

. 52 0

, 5 2 1 (2 3 9

SE2 d 2 0 4) (1 9 7 7) (s am e).

3i n s u pp o rt t h ereo f” 3 an d (2 ) t h e Dep art m en t h as es t ab l i s h ed th at t h e ap p el l an ts “ co u ld

n o t p o s s i b l y i n t ro d u ce ev i d en ce wi t h i n th e fram ewo rk o f t h e co m p l ai n t s u ffi ci en t to

warran t a g ran t of t he rel i ef s o u g h t .” 4 Th i s i s so ev en t ho u g h i n d eci d i ng a m o t i o n to

d i s m i s s

, “ al l p l ead i n g s are t o b e co n s t ru ed m os t fav o rab l y t o t h e p art y wh o fi l ed t h em

,

an d al l d o u b ts reg ard in g s u ch p l ead i n gs m u s t b e res o l v ed i n t h e fi li n g p art y ’ s fav or.” 5

In d eed

, ev en u n d er t h is fo rg i vi n g an al y t i cal fram ewo rk

, t h e ap p el l an ts ’ act i o n m u s t

b e d i s m is s ed

.

OCGA § 4 8 -2 -3 5 o f t h e Pu b l i c Rev en u e Co d e— u nd er wh i ch t h e ap p el l an t s

fi led su i t ag ai n s t t h e Dep art m en t

— p ro v i d es i n rel ev an t p art t h at

[a] t ax p ay er s hal l b e refu n d ed an y an d al l t ax es o r fees wh i ch are

d et erm i ned t o h av e b een erro n eo u s l y o r il l eg al l y as s es s ed an d co l l ect ed

fro m s u ch t ax p ay er un d er t h e l aws o f t h i s s t at e, w h et h er p ai d v o l u n tari l y

o r i n v o l u n tari l y

, an d s hal l b e refu n d ed i nt eres t [.]

. . . Refu n d s s h al l be

d rawn fro m t h e t reas u ry o n warran t s o f th e Go ver n o r i s s u ed u p o n

i t em i zed req u i s i ti o n s s h o wi n g i n each i n s t an ce t h e pers o n t o w h o m th e

3 We b b v. Ba n k o

f Am., N.A.

, 3 2 8 Ga. Ap p

. 6 2

, 63 (7 6 1 SE2 d 4 8 5 ) ( 2 0 1 4 )

(p u n ct u at i o n o m i tt ed ); a cco r d A u s ti n v. Cl a rk

, 2 9 4 Ga. 7 7 3, 77 4 -7 5 (7 5 5 SE2 d 7 9 6 )

(2 0 1 4).

4 W eb b , 3 2 8 Ga. Ap p . at 6 3 (p u n ct u at io n o m i t t ed ); a cco r d A u s t i n

, 2 9 4 Ga. at

7 7 5

.

5 Au s t i n , 2 9 4 Ga. at 7 7 5 (p u n ct u at i o n o m i t t ed ).

4refu n d i s t o b e m ad e

, t h e am o u n t o f t h e refu n d

, an d t he reas o n fo r th e

refu n d

. 6

Acco rd in g t o o u r Su prem e Co u rt

, t h i s s t at u to ry au t h o ri zat i on t o b ri n g an act i o n fo r

a t ax refu n d i n s u p eri o r co u rt ag ai n s t a g o v ern m en tal b o d y is “ an ex p res s wai v er o f

s o v erei g n im

m u n i t y

, an d t h e St at e’ s co n s en t t o be s ued m u s t b e s t ri ct l y co n s t ru ed

. ” 7

In s eek i n g t o di sm i s s t h e ap p el l an t s’ act i o n r e g a r d i n g t h e d en i al of t h ei r t ax

refu nd req u es t s

, t h e Dep art m en t arg u ed t hat

, b ecau s e “ [t ] h e d o ct ri n e of s o v erei g n

i m m u ni t y req u i res t h at t h e co n d i ti o n s an d li m i t at i o n s o f t h e s t at ut e t hat w ai v es

6 OCGA § 4 8 -2 -3 5 (a).

7 S awn ee E l ec. Memb er

s h i p Co r p

. v. G a

. Dep ’t o

f Rev.

, 2 7 9 Ga. 2 2

, 2 3 (2 ) (6 0 8

SE2 d 6 1 1) (2 0 0 5 ) (ci t at i on o m i t t ed ); s ee a ls o Ci t y o f At l a n ta v. Ba r n es

, 27 6 Ga. 4 4 9,

4 5 1 (3 ) (5 7 8 SE2 d 1 1 0 ) (2 0 0 3 ) (“ W h en a st at u t e p ro vi d es th e ri gh t to b ri n g an act i o n

fo r a t ax refu n d ag ai n st a g o vern m en t al b o d y

, t h at s t at u t e p ro v i d es an ex p res s wai v er

o f i m m un i ty an d es t ab l i s h es t h e ex t en t o f t h e wai v er (t h e am o u n t o f t h e refu n d ) .

. . .”), s u p er s ed ed by s t at ut e

, OCGA § 4 8 -2 -3 5 (b ) (5 ), a s r eco gn i z ed in S a wn ee El ec.

Memb er s h i p Co r p

. , 2 7 9 Ga. at 2 5 (3 ) n .1 ; Ga

. Emi s s i o n Tes t i ng Co

. v. Ja cks o n

, 2 5 9

Ga. Ap p

. 2 5 0

, 2 5 2 (5 7 6 SE2 d 6 4 2 ) (2 0 0 3) (“ OCGA § 48 -2 -3 5 i s a p art i al w ai v er o f

s o v erei g n i m

m u ni t y b y t h e St at e.”). See gen er a l l y G A

. C O N S T

. Art

. I, Sec. II, Par. IX

(e) (“ E x cep t as s p eci fi cal l y p ro v i d ed i n t h i s Parag rap h

, s o v erei g n i m m u n it y ex t en d s

t o t h e st at e an d al l o f i t s d ep a r t m e n t s an d ag en ci es

. Th e so v erei g n i m m u ni t y o f t h e

s t at e an d i t s d ep art m en t s an d ag en ci es can o n l y be wai v ed b y an Act o f t h e Gen eral

As s em b l y wh i ch s peci fi cal l y p ro v i d es th at s o verei gn im m u n i t y i s th ereb y wai v ed an d

t h e ex t en t o f s u ch wai v er.”).

5i m

m u ni t y b e s tri ct l y fo l l o w ed ,” 8 t h e ap p el l an t s ’ fai l u re t o co m p l y wi t h a Dep art m en t

reg u l at i o n ap pl i cab le t o d eal ers s eek i n g t ax refu n d s o n beh al f o f cu s t o m ers barred t h e

a c t i o n o n g ro u n d s of so v erei g n i m m u ni t y an d / or th e fai l u re t o s tat e a cl ai m u p o n

wh i ch rel i ef c a n b e g r a n ted

. An d as we h av e p rev io u s l y reco g n i zed

, t h e Rev en u e

Co m m i s s i o n er h as “ ex p li ci t au th o ri t y t o pro m u l gat e reg u l at i o n s fo r t he en fo rcem en t

o f t he Pu b l i c Rev en ue Co d e an d t h e co l l e c t ion of r e v e nue s th ereu n d er.” 9 Fu rt h erm o re,

we are m i n d fu l t h at wi t h reg ard t o s t at ut es an ad m i n is t rat i v e ag en cy h as t h e d u t y

t o

en fo rce or ad m in i s t er, as wel l as ru l es an d reg u l at i o n s an ag en cy h as en act ed t o fu l fi l l

i t s fu n ct i on

, t h e ag en cy ’ s i n t erp ret at i o n s o f t h es e ru l es an d reg u l at io n s are t o b e g i v en

co n si d erab l e wei g h t an d d eferen ce. 1 0

8 Ga

. Dep ’t o

f La bo r v. RTT As s o cs

. , In c.

, 2 9 9 Ga. 7 8

, 8 3 (2 ) (7 8 6 SE2 d 8 4 0 )

(2 0 1 6); a cco rd Dep ’t o

f Hu m a n Res

. v. Hu t ch i n s o n

, 21 7 G a. Ap p

. 70

, 7 1 (1 ) (4 5 6

SE2 d 6 4 2 ) (1 9 9 5); In g al l

s Ir o n W o r ks Co

. v. Bl a ckmo n

, 1 3 3 Ga. Ap p

. 1 6 4

, 1 6 5 (2 1 0

SE2 d 3 7 7) (1 9 7 4).

9 Ga

. Dep ’t o

f Rev. v. Ga

. Ch emi s t r

y Co u n ci l

, In c.

, 2 7 0 Ga. Ap p

. 6 1 5, 6 1 6 (6 0 7

SE2 d 2 0 7 ) (2 0 0 4) (p u n c t u a t i o n o m i t t ed ); see al s o OCGA § 4 8-2 -1 2 (a) (“ Th e

co m m i s s io n er s hal l h av e t h e p o wer t o m ak e an d p u b l i s h i n pri n t o r el ect ro n i cal l y

reas on ab l e ru l es an d reg u l at i o n s n o t i n co n s i s t en t w i t h th i s t i tl e o r o th er l aws o r wi th

t h e Co n s t i t u t i o n o f t h i s s t at e o r o f t h e Un i ted St at es fo r t h e en fo rcem en t o f t h i s t i t l e

an d t h e co l l ect i o n o f rev en u es u n d er t h is t i tl e.”).

1 0 S ee Ga

. Dep ’t o

f Rev. v. Owen s Co r n i ng

, 28 3 Ga. 4 8 9

, 4 9 0 (6 6 0 SE2 d 7 1 9 )

(2 0 0 8) (“ [T] he i n t erp ret at i o n o f a s t at u t e b y an ad m i n i s t rat iv e ag en cy wh i ch h as t h e

d u t y o f en fo rci n g o r ad m i n i s t eri n g i t i s to b e g i ven g reat wei g h t an d d eferen ce.”);

6Here, t h e rel ev an t reg u l at i o n p ro vi d es , i n p ert i n en t p art

, t h at

[i ] n t h e cas e of tax es i l l eg al ly o r erro n eo u s l y co l l ect ed

, t h e d

ea l er ma y

s ecu re a r ef

un d as p r o vi d

ed i n OCGA Sect i o n 4 8 -2 -3 5

, pr o vi d ed

,

h o wever

, t h e d ea l er mu s t a

f f i r ma ti vel y s h o w th at t h e t ax s o i l leg al l y o r

erro n eo us l y co l l ect ed was p ai d by h i m an d n o t pai d b y th e co n s u m er, o r

t h a t s u ch t a x wa s co l l ect ed f r o m t h e co n s umer as t a x a n d ha s s i n ce b een

r ef u nd ed t o t h e co n s u mer

. 1 1

Th e Dep art m en t a s s e r ts t h at

, p er th i s reg u l at i o n, befo re s eek i ng a refu n d o n

b eh al f o f t h ei r cu s t om ers u n der OCGA § 4 8 -2 -3 5

, t h e ap p el l an ts were req u i red to

Pr u it t Co r

p

. v. Ga

. Dep ’t o

f Co mm. Hea l t h

, 2 8 4 Ga. 1 5 8

, 1 5 9 (2 ) (6 6 4 SE2 d 2 2 3 )

(2 0 0 8) (“ W h en an ad m i n i s t r a t i v e ag en cy d eci s i o n i s t h e s u bject o f ju d i ci al rev i ew,

ju d i ci al deferen ce i s t o b e affo rd ed t h e ag en cy ’ s i n terp ret at i o n of s t at u t es i t i s ch arg ed

wi t h en fo rci n g o r ad m i n i s t eri n g an d t h e ag en cy ’ s i n t erp ret at i o n o f ru l es an d

reg u l at i o n s i t h as en act ed t o fu l fi l l t h e fu n ct i o n g iv en i t b y t he l eg i s lat i v e b ran ch .”);

Kel l y v. Ll o yd ’s of Lo nd

on

, 2 5 5 Ga. 2 9 1

, 2 9 3 (3 3 6 SE2 d 7 7 2 ) (1 9 8 5 ) (“ It i s a

wel l -s et tl ed p ri n ci p l e of l aw t h at ev en t h o u gh an i n terp ret at i o n o f a s t at u t e b y an

ag en cy ch arg ed wi t h t he d u ty

o f en fo rci n g i t i s n o t co n cl u s i v e, i t i s en t it l ed t o g reat

wei g h t

. ” (p u n ct u at i on o m i t ted )). S ee g en er a l l

y Dav i d E. Sh i pl ey

, Th e Ch evr o n Two

S t ep i n G e o r

g i a ’s Ad mi n i s t r at i ve La w

, 4 6 Ga. L. Rev

. 8 7 1

, 8 7 7 (I) (Su m m er 2 0 1 2 )

(n o t i ng t h at recen t d eci s i o ns o f t h e Su p rem e Co u rt o f Geo rg i a “ co n fi rm t h at Geo rg i a

i s a s tro n g d eferen ce s tat e wh ere t h e co u rt s wi l l d efer t o t h e ag en cy i n t erp ret at i o n as

l o n g as i t i s n ot co n t rary t o t h e s t at u te” (p u n ct u at i on o m i t t ed )). Bu t s ee Jeffrey A.

Po jan o w s k i

, W

it h o u t Def

er en ce

, 8 1 M i s s o u ri L. Rev

.

_ _ _ (Fo rt h co m in g 2 0 1 7 )

(ex p l o ri ng wh at j u d ici al rev i ew o f ag en cy i n t erp ret at i o n s wo u l d l o o k l i k e i f t h e

Su p rem e Co u rt o f t he Un i t ed St at es ab an do n ed Ch evr o n d eferen ce i n fav o r of d e n o vo

rev i ew), a va i l ab le a t ht t p s : / / pa p e r s. ssr n .co m / s o l3 / p ap ers

. cfm ? ab s t ract _i d =2 8 0 6 4 3 5.

1 1 Ga. Co m

p. R. & Reg s . 5 6 0 -1 2 -1 -.2 5 (2 ) (em p h as i s s u p p l i ed ).

7affi rm at i v el y s ho w t hat t h e al l eg e d e r r o n eo u sl y o r i l l eg al l y co l l ect ed t ax h ad b een

refu nd ed b y t h em t o t hei r cu s to m ers

. Bu t i t i s wh o l l y u n d i s p u t ed i n t h is cas e t h at

,

ev en n o w, t h e ap p el l an t s h av e n o t refu n ded t o t h ei r cu s t o m ers

, t h e co n s u m ers

, t h e t ax

t h at t h ey al l eg e was i ll eg al ly o r erro n eo u s l y

co l l ect ed an d fo r w h i ch t h e ap p el l an t s

,

as d eal ers , s o u g h t a refu n d fro m t h e Dep art m en t

.

Nev ert h el es s

, t h e ap p el l an t s arg u e t h at t h e D ep art m en t ’ s i n t erp ret at i o n o f t h e

reg u l at i o n i s n o t s u p p o rt ed b y i t s p l ai n l an g u ag e an d i s

, i n es s en ce, u n reas o n ab l e. Th e

ap p el l an t s are co rrect t h at OCGA § 4 8 -2 -3 5 , wh i ch ex p res s l y au t h o ri zes refu n d s o f

al l eg ed l y erro neo u s l y o r i l l e g al l y p ai d s al es t ax es

, “ d o es n o t req u i re t h at a d eal er

ad v an ce i t s o wn fu n d s t o cu s t o m ers b efo re k n o wi n g i f t h e Dep art m en t wi l l gran t t h e

cl ai m ed refu nd of s al es t ax .” Bu t as p rev i o u s l y n o t ed

, t h e Rev en ue Co m m i s s i o n er h as

ex p li ci t s t a t u t o ry au t h o ri t y to “ p r o m u l g at e reg u l at i o n s fo r t h e en f o r cemen t o f t h e

Pu b l ic Rev en u e Co d e an d t h e co l lect i o n o f rev en u es t h ereu n der” 1 2 w i t h ju d i ci al

d efere n c e affo rd ed t o “ th e ag en cy ’ s i nt erp ret at i o n o f ru l es an d reg u lat i o n s i t h as

1 2 Ga

. Ch emi s t r

y Co u n ci l

, In c.

, 2 7 0 G a. Ap p

. at 6 1 6 (p u n ct u at i o n o m i t t ed )

(em p h as i s s u p p l i ed ); s ee a l

so O CGA § 4 8 -2 -1 2 (a) (“ Th e co m m i s si o n er s h al l h av e

t h e p o w er t o m ak e an d p u b l is h i n p ri n t o r el ect ro n i cal l y reas on ab le ru l es a n d

reg u l at i o n s n o t i n co ns i s t en t w i t h t h i s t i t l e o r o t h er l aws o r wi th t h e Co n s t i t u t i o n o f

t h i s st at e o r o f t h e Un it ed St at es fo r th e en fo rcem en t of t h i s t i t l e an d t h e co l l ect i o n o f

rev en u es u n der t h i s t i t l e.”).

8en act ed t o fu l fi l l t h e fu n ct i o n g i v en i t b y t he l eg i s l at i v e b ran ch

. ” 1 3 To t h at en d

, u n d er

i t s p o wer t o p ro m

u l g at e reg u lat i o n s fo r th e en fo rcem en t o f t h e Pu b l i c Rev en u e Co d e

(o f w h i ch OCGA § 4 8 -2 -3 5 i s a p a r t ), t he Dep art m en t h as en act ed a reg u l at i o n

g o v e r n i ng t h e p ro ced u re fo r d eal ers wh o seek t o o b t ai n refu n d s o n b eh al f o f t h ei r

c ustom e r s under O CGA § 4 8 -2 -3 5

. An d t h e Dep art m en t in t erp ret s t h at reg u l at i o n

, G a.

Co m p

. R. & Reg s

. 5 6 0

- 1 2

- 1 -.2 5 (2 ), as req u i ri n g d eal ers t o refu n d th e t ax to

cu s t o m ers / co n su m ers p ri o r t o req u es t i n g a refu n d fro m t h e Dep art m en t

.

In co n s i deri n g t he Dep art m en t ’ s i nt erp ret at ion of this r e gula tion, w e t u rn t o Th e

Oxf o r d En g l i s h Di ct i o n a r

y

, 1 4 wh i ch d efi n es “ s ecu re,” t h e w o rd wi t h wh i ch ap p el l an t s

t ak e i s s u e, as m ean i ng

, in t er a li a

, “ [t ] o en s u re (a p ers o n’ s ) o b t ai ni n g (s o m et h i n g )”

an d “ [t ] o g et h o l d o r p o s s es s i o n o f (s o m et h i n g des i rab l e) as t he r e s u l t o f e f f o rt o r

1 3 Pr u i t t Co r

p

. , 2 8 4 Ga. at 1 5 9 (2 ); s ee a l s o At l a n t a Jo u rn a l v. Ba bu s h

, 2 5 7 Ga.

7 9 0

, 7 9 2 (2 ) (3 6 4 SE2 d 5 6 0 ) (1 98 8 ) (“ [I] n co n s tru i n g ad m i n is trat i v e ru l es

, ‘ t h e

u l t i m at e cri t eri o n i s t he ad m i n i s t rat i v e i n t erp ret at i on

, wh i ch b eco m es o f co nt ro l l i n g

w e i g h t u nl es s i t i s p l ai n l y erro n eo u s o r i nco n s i s t en t wi t h t h e ru l e.’ ” (p u nct u a t i o n

o m it t ed )), r el

yi n g u p on Un i ted S t a t es v. La r i o n o f f

, 4 3 1 U.S. 86 4

, 8 7 2 (II) (A) (9 7 SCt

2 1 5 0

, 5 3 LE2 d 4 8 ) (1 97 7 ) (“ In co n s t ru i n g ad m i n i s t rat i v e reg ul at i o n s

, t h e u l t i m at e

cri t eri o n i s t h e ad m i ni s t rat iv e i n t erp ret at io n

, wh i ch b eco m es o f co n t ro l l i n g wei g ht

u n l es s it i s p l ai n ly erro n eo u s o r i n co n s i s t en t w i t h t h e reg u l at i o n.” (p u n ct u at i o n

o m it t ed )).

1 4 S ee Co u ch v

. Red Ro o

f In n s, In c.

, 2 9 1 Ga. 3 5 9, 3 6 1 (1 ) (7 2 9 SE2 d 3 7 8 )

(2 0 1 2) (l o o k i n g t o d i ct i on ary fo r p l ai n an d o rd in a r y m ean i n g o f wo rd ); A.A.

Pr o fes s i o n a l Ba i l v. S t a t e

, 2 6 5 Ga. Ap p . 4 2 , 4 3 (5 9 2 SE2 d 8 6 6 ) (2 0 0 4 ) (s am e).

9co n tri v an ce.” 1 5 Th u s

, t o t h e ex t en t t h at t h e effo rt req u i red fo r a d eal er t o “ secu re” a

refu nd u n d er Ga. Co m

p

. R. & Reg s . 5 6 0 -1 2 -1 -.2 5 (2 ) is i n an y way am b i g u o u s

, we

d efer t o t he Dep art m en t ’ s i n t erp ret at i o n o f t hi s reg u l at i on

, wh i ch i t en act ed i n o rd er

t o fu l fi l l t h e fu nct i o n d el eg at ed t o i t b y o ur Gen eral As s em

b l y

. 1 6

Gi v en t h e fo reg oi ng

, w e are u n p ers u ad ed b y th e ap p el l an t s ’ arg u m en t t h at t h e

Dep art m en t ’ s i n t erp ret at io n i s erro n eo u s o r u n reas o n ab le d u e t o t h e l an g uag e u s ed in

a p o rt i o n o f t h e r e g u l a t i o n t h at co ncern s refu n ds fo r t h e “ o v erp ay m en t o f s al es t ax

p ai d t o th e St at e as a res u l t o f t an g i b le p ers o n al p ro p ert y ret u rn ed b y th e p u rch as er,”

an d wh i c h p ro v i des two m et ho d s b y wh i ch a d eal er m ay b e refu n d ed fo r s u ch

o v erp ay m en t. 1 7 On e s u ch m et h o d s p eci fi es t h at wh en “ t h e p ro p ert y h as b een ret u rn ed

t o th e d eal er aft er n in et y (9 0 ) day s fo l l o wi n g t h e o ri g in al s al e, t h e d eal er m ay r eq u es t

1 5 T H E C O M P A C T O X F O R D E N G LI S H D I C T I O N A R Y 1 6 9 6 (2 d ed . 1 9 9 1).

1 6 S ee s u pr a n o t es 9 -1 0 & 1 3 ; s ee al s o Ben t l ey v. Ch a s t a i n

, 2 4 2 Ga. 34 8

, 3 5 0

-

5 1 (1 ) (2 4 9 SE2 d 3 8 ) (1 9 7 8) (“ W h et h er o p erat i n g i n t h e fed eral

, s t at e, o r lo cal s p h ere,

ag en ci es p ro vi d e a h i g h l ev el o f ex p ert i s e an d an o p p o rt u n i t y fo r s p eci al i zat i o n

u n av ai l ab l e i n t h e ju d i ci al or l eg i s l at i ve b ran ch es

. Th ey are ab l e t o u s e t h es e s k i l l s

, al o n g wi t h t h e p o l i cy m an d at e an d d i s cret i o n en t ru s t ed t o t h em b y t h e l eg i s l at u re, to

m ak e ru les an d en fo rce t h em i n fas h i o n i n g s o l ut i o n s t o v ery co m p l ex p ro b l em s .”).

1 7 Ga. Co m

p. R. & Reg s . 5 6 0 -1 2 -1 -.2 5 (1 ).

10a cred i t m em o ran d u m fo r u s e ag ai n s t s u b s eq u en t t ax es .” 1 8 An d u p o n ap p ro val o f s u ch

“ req u es t ,” t h e d eal er “ wi ll b e fu rn i s h ed wi t h a cred i t m em o ran d u m a u t h o ri zi n g a

d ed uct i o n o n t h e ap p ro p ri at e l i ne o f t h e Sal es an d Us e Tax Rep o rt .” 1 9 Bu t t h e u s e o f

“ req u es t ” i n t h i s p o rt i o n o f t he reg ul at i o n

, w h i ch d eal s wi t h an en t i rel y d i fferen t s et

o f ci rcu m s t an ces

, d o es n o t ren d er u n reas o n ab l e an i nt erp ret at io n t h at t h e p ro ces s by

wh i ch a d eal er m ay

“ secu re” a refu n d o n b eh al f o f i t s cu s t om ers fo r “ t ax es i l l eg al l y

o r erro n eo u s l y co l l ect ed ” req ui res rep ay m en t t o cu s t o m ers p ri or to m ak i n g a r eq u es t

1 8 Ga. Co m

p. R. & Reg s . 5 6 0 -1 2 -1 -.2 5 (1 ) (b ) (em p h as i s s u p p l i ed ).

1 9 Id

.

11fo r s u ch a refu nd

, 2 0 es p eci al l y i n l i gh t o f t h e b ro ad d efi n i ti o n o f “ s ecu re,” d i s cu s s ed

s u p r a

. 2 1

Fu rt herm o re, an d as an as i d e, we n ot e th a t t h e ap p el l an t s ’ o wn set t l em en t

ag reem en t wi th t h ei r cu s t o m ers u n d ercu t s t hei r as s ert i on t h at a n i n t erp ret at i o n

req u i ri n g r e p a ym en t t o co n su m ers p ri o r t o s eek i n g a refu n d i s u n reas o n ab l e o r

2 0 S ee Ga

. Oi lmen ’s As s ’n v. Dep t ’ o f Rev.

, 2 6 1 G a. Ap p

. 3 9 3, 3 9 8 -9 9 (2 ) (5 8 2

SE2 d 5 4 9 ) (2 0 03 ) (“ Becau se o f ag en ci es ’ p r e s u m ed ex p ert i s e i n deal i n g wi th

co m p l ex i s s u es

, we d efer t o t he [t h e Dep a r t m e n t ] o n th e i s s ue o f reas o nab l en es s

u n l es s t h ere i s ev i d en ce t he reg u l at i o n i s arb it rary a n d cap ri ci o us .”), ci t ed wi th

a p p r ova l b y Hi l l v. Owen s

, 2 9 2 Ga. 3 8 0, 3 85 (2 ) (b ) (7 3 8 SE2 d 5 6 ) (2 0 13 ); cf . New

Ci n gu l a r W

i rel es s PCS

, LLC v. Di r ect o r

, Di v. of Ta xa t i o n

, 2 8 N.J

. Tax 1

, 16 (III) (A)

(2 0 1 4) (i nt erp ret i n g N .J .S.A. 5 4 : 3 2B-2 0 (a) as “ co n t ai n [i n g ] a rep ay m en t p ro v i s i o n

t h at m u s t b e fu l fi l l ed befo re an ‘ act u al ’ refu n d

— t h e p ay m en t o f m o n ey fro m t h e St at e

t r e a s u ry

— can b e m ad e t o a p ers o n req u i red t o co l l ect th e t ax an d n ot b efo r e t h e

v al i d i t y o f t h e refu n d cl ai m can b e co ns i d ered ” (em p h as i s su p pl i ed )); i d. at 1 6 -1 7 (III)

(A) (fu rt her n ot in g t hat “ [ t ]h e Di rect o r h as n o t p ro m u l g at ed reg u l at i o n s un d er t h e

s t at u te” an d

, as a res u l t

, “ tax p ay ers an d th e co u rt s h av e n o wri t t en g u i d an ce, ad o p t ed

t h ro u g h t he Ad m i n i st rat i v e Pro ced u re Act

, d et ai l i n g t h e cri t eri a t h at th e D i rect o r wi l l

u s e t o d et erm i n e w h et h er t he rep ay m en t o b l i g at i o n i n N .J .S.A. 5 4 : 3 2 B-2 0 (a) h as

b een s at i s fi ed ”); N.J .S.A. 5 4 : 3 2 B-2 0 (a) (“ In t h e m an ner p ro v i d ed i n th i s s ect i o n t h e

d i rect o r s h al l refu n d o r cred i t an y t ax

, p en al t y o r i n t eres t erro n e o u s l y, il l eg al l y o r

u n co ns t it u t i o n al l y co l lect ed o r p ai d i f ap p l icat i o n to th e d irect o r fo r su ch refu n d s h al l

b e m ad e wi t h i n fo u r y ears fro m t h e p ay m en t t h ereo f. . . . Su ch ap pl i cat io n m ay al s o

b e m ad e by a p ers o n req u i red t o co l l ect t h e t ax

, wh o h as co l l ect ed an d p ai d o v er s u ch

t ax t o th e d i rect or,

. . . bu t n o act u al refu n d o f m o n ey s s h al l b e m ad e t o s u ch p ers o n

u n t i l t h e p ers o n s h al l fi rs t es t ab l i s h t o t h e sat i sfact i o n o f t h e d i r e c t o r, u n d er s u ch

reg u l at i o n s as th e d i rect o r m ay p res cri b e, t h at th e p ers o n h as rep ai d to t h e cu s t o m er

t h e am o un t fo r wh i ch t h e ap p l i cat i o n fo r refu nd i s m ad e. . . .”).

2 1 S ee s u p r a n o t e 1 5 & acco m

p an y i ng t ex t

.

12erro neo u s

. Ap p el l an ts arg u e t h at i f rep ay m en t t o c u s t o m ers was req u i red b efo re

s eek i n g a refu n d fro m th e Dep art m e n t

, s h o u l d t he Dep art m en t refu s e t o p ay

,

ap p el l an t s “ wo u l d h av e lo st m i ll i o n s i n i t s own fu n d s

– an d t h e cu s t o m ers wo u l d h av e

recei v ed refu n d s t h at t h e D ep art m en t d et erm in ed were n o t d ue.” Th e v ery t erm s o f

t h e s et tl em en t ag reem en t , h o wev er, u n d erm i n e t h is arg u m en t :

To t h e ex t en t t h at an y [t ] ax i n g [j] u ri s d i ct i o n req u ires t h at

, p ri o r t o

t h e [t ] ax i n g [j] uri s d i ct i o n ’ s gran t an d/ o r pay m en t o f a cl ai m ed refu nd o f

I n t ern et T ax es

, [Ap pel l an t s ] refu nd t h o se am ou n ts to th e affe c t e d

cu s t om ers in t he Set tl em en t Cl as s

, th e Set t l i n g Par t i e s ag ree t h at s u ch

p ay m en t s h al l b e m ad e b y [ap p el l an t s ] i n es cro w t o a f u n d (t h e “ PreRefu n d Es cro w Fu n d ”) . . . .

Th e ag reem en t g o es o n t o p ro v i d e th at “ [s ] u ch p ay m en ts sh al l be m ad e

co n temp o r an eo us l

y wi t h t h e f

i li n g o f t h e r ef un d cl a i m

, i f s u ch req u i rem en t i s k n o wn

at s uch ti m e, o r wi th i n 1 5 d ay s aft er recei v i n g n ot i ce o f s u ch req u i rem en t b y t h e

[t ] ax i n g [j] u ri s d i ct i o n .” 2 2 Fu rt h er, u n d er t h i s s ect i o n o f t h e ag reem en t

, al l s et t l i n g

cl as s m em

b ers ag ree t h at

fo r p u rp o ses o f s at i sfy i n g t h e req u i rem en t o f an y [t ] ax i n g [j] u ri s d ict i o n

,

t h at [ap p el l an t s ] refu n d t ax es t o t h e affect ed cu s t o m ers pri o r t o g ran t i n g

o r p ay i ng a refu n d cl ai m

, t h e pay m en t b y [ap p el l a n t s ] o f an am o u n t

2 2 (Em p has is s u pp l i ed ).

13rep res en t i n g In t ern et Tax es p ai d b y th at [cl as s m e m b e r] in t o t h e PreRefu n d Es cro w Fu n d wi ll b e co n s i d ered t h e p ay m en t b y [ap p el lan t s ] o f

s u ch t ax es t o s uch [cl as s m em b er]

.

Fi n al l y

, t he ag reem en t s p eci fi es t h at “ [a] m o u n t s p ai d t o t he Pre-Refu n d Es cro w Fu n d

s h al l be h el d i n a m

u tu al l y ag reeab l e acco un t m ai n t ai n ed b y a part y u n rel at ed t o t h e

S e t t l i n g Part i es

, u n ti l t h e o ccu rren ce o f” o n e o f t wo s o -cal l ed “ Pre-Refu n d Es cro w

Rel eas e Ev en t s .”

Th e fi rs t “ Pre-Refu n d Es cro w Rel eas e E v en t ” d eal s wi t h s cen a r i o s i n wh i ch

refu nd pay m en t s are m ad e by t h e t ax i n g ju ri s d ict i o n

. Th e ag reem en t p ro v i d es t h at i f

t h e t ax i n g ju ri s d i ct i o n “ pay s m o n i es t o [ap p el l an t s ] or pro v i des t ax cred i t s i n fu l l o r

p art i al sat i sfact i on o f t h e refu n d cl ai m s wi t h t h e [t ] ax in g [j] uri s d i ct i o n ,” ap p el l an t s

b eco m e s u b

ject t o ad d i ti o nal p ro v i s i o n s o f t h e s et t l em en t a g r eem en t

. O n e o f t h o s e

a d d i t i o n al p ro v i s i o n s sp eci fi es t h at i f a t ax i n g ju ri s d i ct io n g ran t s a refu n d t o t h e

ap p el l an t s

, t h e ap p el lan t s “ s h al l as s i g n al l o f [t h ei r] ri g ht s

, t it l e an d i n t e r e s t i n t h e

refu nd rel at ed t o t h e m em b ers o f t h e Set t l e m e n t Cl as s

, s u b ject t o an y cl ai m s o r

co n di t i o n s t h at m ay b e i m p o s ed o n s u ch refu nd b y t h e [t ] ax i ng [j] u ri s d i ct io n ,” an d t h e

refu nd ed m o n i es wi l l b e p ai d di rect l y t o es cro w acco u n t s es t ab li s hed el s ewh ere i n t h e

s et t l em en t ag reem en t

. Th e o t h er p ro v i s i o n sp eci fi es t h at i f t h e ap p el l an t s recei v e a t ax

14cred i t fro m a t ax i n g ju ri s d i ct i o n, t h ey m u s t “ rem i t m o n i es i n t h e am o u nt of t h e cred i t

as t h ey rel at e t o m em

bers ” o f t h e s et t l em en t cl as s t o t h e es cro w acco un t s es t ab l i s h ed

el s ewh ere i n t he ag reem en t

.

Th e s eco n d “ Pre-Refu n d Es cro w Rel eas e Ev en t ” deal s wi t h s cen ari o s i n wh i ch

t h e t ax i n g ju ri s d i ct i o n d

en i es a refu n d

. Th i s p ort i o n o f t h e ag reem en t ap p li es wh en

a fi n al d et erm i n at io n h as b een i s s u ed

, fo r wh i ch fu rt h er ap p eal i s ei t h er

n o t av ai l ab l e o r n o t p u rs u ed

, b y e i t h er t h e [t ] ax i n g [j] u ri s d ict i o n i n

q u es t i o n d en y i n g al l o r an y p o rt i o n o f th e refu n d cl ai m s fo r In t ern et

T a x e s fi l ed wi t h t h at [t ] ax i n g [j] u ri s d ict i o n or b y a co u rt o f co m p et e n t

ju ri s di ct i o n i n an act i o n i n i t i at ed t o co m p el t h e [t ] ax i ng [j] u ri s d i ct i on t o

act o n t h e refu n d cl ai m

, wh ich act i o n res u l t s i n no refu nd or cred i t b ei n g

recei v ed b y

[ap p el l an t s ]

.

Th e p arag rap h t h at fo l l o ws t h e d es cri pt i o n o f t h es e t wo “ Pre-Refu n d Es cro w

Rel eas e Ev en t s” p ro v i d es

, i n rel ev an t p art

, t h at u p on occu rren ce o f su ch an ev en t

, “ al l

am ou n t s p rev i o us l y p ai d b y [ap p el l an t s ] t o t h e Pre-Refu nd Es cro w Fu nd

, an d an y

i n t eres t earn ed t h ereo n

, t h at are at t ri b u t ab le t o th e refu n d c l a i m s fi l ed wi t h t h e

p art i cu l ar [t ] ax i n g [j] u ri s d i ct i o n at i ss u e s h a l l b e p a i d t o [ a p p el la nt s ]

. ” 2 3 Th u s

, i f a

refu nd i s g iv en b y

t h e t ax i n g ju ri s d i ct i o n i n s o m e fo rm , m o n ey i s t h en p ai d d i rect l y

2 3 (Em p has is s u pp l i ed ).

15t o cl as s m em b ers vi a s ep arat e es cro w acco u n t s

, an d ap p el lan t s recei ve b ack fro m t h e

Pre-Refu n d Es cro w Acco u n t w h at w as p re-p ai d in t o i t t o s at i s f y t h e “ p re-p ay ”

r e q u i rem en t s o f t h e t ax i n g j u ri s d i ct io n

. An d i f n o refu n d i s g iv en b y th e t ax i n g

ju ri s d i ct i o n

, t h e ap p el lan t s s ti l l recei ve b ack fro m t h e Pre-Refu n d Es cro w Acco u nt

t h e am o u nt t h at t he y pr e

- pa id

. Acco rd i n gl y

, t h e ap p el l an t s ’ o wn s et t l em en t ag reem en t

co n tem p l at es a s cen ari o i n wh i ch p re-p ay m en t to t he cu s t o m er i s req u ired b u t an

u l t i m at e refu n d fro m t h e Dep art m en t i s n ev er o b t ai n ed ; an d i n su ch a s i t u at i o n

, t h ere

i s n o “ wi n d fal l” t o t he cu s t o m er b ecau s e t h e am o un t pre-p ai d i n t o es cro w i s ret u rn ed

t o t he ap p el l an t s

.

In s um

, b e c a u se th e ap p el l an t s a d mi t t h at t h ey hav e n o t rep ai d t h e al l eg ed

erro neo u s l y co l l ect ed tax t o t hei r cu s t o m ers

, as ev en th ei r o wn s et t l em en t ag reem en t

co n tem p l at es , t h e t ri al co u rt pro p erl y d i s m i s s ed th e act i o n w h en s u ch a p rep ay m en t

was req u ired b y

t h e Dep art m en t reg ul at i on s p ri o r t o req ues t i n g a refu n d

. 2 4

2 4 S ee A u s t i n

, 2 9 4 Ga. at 7 7 4 -7 5 (“ A m o t i o n t o d i s m i s s f o r fai lu re t o s t at e a

cl ai m u p o n wh ich rel i ef m ay b e g r a n t ed s h o u l d no t b e s u s t ai n ed un l es s (1 ) t h e

al l eg at i o n s o f t h e co m

p l ai n t d i s cl o s e wi t h cert ai n t y t h at t h e c l ai m an t w o u ld n o t b e

en t i t l ed t o rel i ef un d er an y s t at e o f p ro v ab l e fact s as s ert ed i n su p po rt t h ereo f; an d (2 )

t h e m ov an t es t ab l i s h es t h at t h e cl ai m an t co u l d n ot p o ss i b ly i n t ro d u ce ev i den ce wi t h in

t h e fram ewo rk o f t h e co m pl ai n t s u ffi ci en t t o warran t a g ran t o f t h e rel i ef s o u g h t[.] ”

(p u n ct u at i o n o m i t t ed )); W eb b , 3 2 8 Ga. Ap p . at 6 3 (s am e).

162

. T he ap p el l an t s al so arg u e t h at t h e t ri al co u rt erred i n g ran t in g t h e m o t i o n to

d i s m i s s aft er co n cl u d i n g t hat (1 ) t h ey l ack ed s tan d i ng t o s eek a refu n d fo r t ax es

co l l ect ed p ri o r t o M ay 5

, 2 0 09

, an d (2 ) t h e ap p el l an t s ’ act io n fo r a refu n d is a cl as s

act i on b arred b y Geo rg i a law. Bu t becau s e t h e m o t i on was p ro p erl y d i s m i s s ed fo r a

f a i l u r e t o s t at e a cl ai m u p o n wh i ch rel i ef co u l d b e g ran t ed d u e t o t h e ap p el l an t s ’

ad m i t t ed fai lu re t o refu nd t h e t ax t o cu st o m ers p ri o r t o s eek i n g a refu n d fro m t h e

Dep art m en t , we n eed n o t ad d res s t h es e ad d i t i o n al en u m erat i on s o f erro r. 2 5

Acco rd i ng l y

, fo r al l o f t h e fo reg o i n g reas o n s

, we affi rm t h e t ri al co u rt ’ s g ran t

o f t h e Dep art m en t’ s m o t i o n t o d i s m i s s

.

Ju d g men t a f f i r m ed . Rees e a nd

Bet h el , JJ., co n cu r

.

2 5 See, e.g

. , Bo b i ck

, 3 21 Ga. Ap p. at 86 9 -7 0 (4 ) (b ) (affi rm i n g d i s m i s s al u n d er

“ ri g h t fo r an y

reas o n ” d o ct ri n e).

17