Court Opinion

ID: 9572688
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:43:41.319833+00
Date Added: 2024-06-11T12:33:48.895967
License: Public Domain

Heao, Presiding Justice,
dissenting. The dissents of Mr. Ohief Justice Duckworth and Mr. Justice Candler, in which I have heretofore concurred, demonstrate that the decision of the Court of Appeals is erroneous and should be reversed. I desire to add only one additional reason why, in my opinion, the decision of the Court of Appeals should be reversed.
Properly construed and applied, the rate of taxation was, or should have been, the same under Code Ann. § 92-3002 (o) (Ga. L. 1937, pp. 109, 112) and Code § 92-3120 (d) (the sections for consideration in this case), prior to' the “capital gains” provision of our State Income Tax Law enacted in 1952 (Ga. L. 1952, pp. 405, 430). If, based on the capital gains provision of the Federal law, or for any other reason, the State Revenue Commissioner accepted returns wherein taxes on income were reported and paid under a capital gains provision, prior to the 1952 act, the acceptance of such returns did not, and could not, establish an administrative policy, since such returns were wholly unauthorized by law. The State’s right to collect taxes under existing laws can not be defeated by the act of a public officer contrary to law. Code § 89-903. The State may be *832estopped from asserting her rights only by legislative act. State of Georgia v. Paxon & Cannon, 119 Ga. 730 (46 S. E. 872).
By amendment (Code Ann. § 92-3002 (o) ), the General Assembly in 1937 (Ga. L. 1937, p. 109) removed “earnings” as a proper item to be included in the distribution of its assets upon the dissolution of a corporation. The act of 1937 had no immediate effect as to the tax liability of any taxpayer under the then existing income tax laws. Under the capital gains provision of the 1952 act, such earnings can not be classed as capital gains. The majority opinion permits earnings that should be distributed to shareholders to be withheld and accumulated until the dissolution of the corporation, and then to be taxed under the capital gains provision of the 1952 act, thus permitting the officers of the corporation, and not the law, to determine the rate of taxation on earnings.
Since the question involved in the present case is one of exemption from full taxation, the applicable rule of law is that exemptions from taxation should be strictly construed against the taxpayer and in favor of the taxing authority. Mayor &c. of Macon v. Central Railroad &c. Co., 50 Ga. 620; Brenau Association v. Harbison, 120 Ga. 929, 933 (48 S. E. 363); City of Columbus v. Muscogee Mfg. Co., 165 Ga. 259 (140 S. E. 860); Cherokee Brick &c. Co. v. Redwine, 209 Ga. 691 (75 S. E. 2d 550); Oxford v. J. D. Jewell, Inc., 215 Ga. 616 (112 S. E. 2d 601). The majority opinion violates this long-established rule hereinabove set out, and for this additional reason I must dissent from the majority opinion. I am authorized to say that Mr. Chief Justice Duckworth and Mr. Justice Candler concur in this dissent.