For over 50 years, Bloomberg Tax’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...
By Chris Marr
AT&T affiliates lost a bid for recovering sales taxes collected from Georgia customers on wireless internet access when an appeals court ruled the company failed to follow state regulations requiring it to refund customers first.
The Georgia Court of Appeals on Feb. 21 agreed with a lower state court in dismissing the tax appeal by New Cingular Wireless PCS LLC and related entities. The companies were appealing the denial of a refund request by the Georgia Department of Revenue ( New Cingular Wireless PCS, LLC v. Ga. Dep’t of Revenue , Ga. Ct. App., No. A16A2003, 2/21/17 ).
The case is part of a nationwide effort for AT&T to recover millions of dollars in erroneously collected sales taxes on wireless internet access, related to the 2010 settlement of federal litigation. A similar lawsuit in Alabama was allowed to continue over the state revenue department’s objections in September, when that state’s civil appeals court declined to dismiss the case.
AT&T is reviewing the Georgia court decision and considering its options, company spokesman Marty Richter told Bloomberg BNA in an e-mail Feb. 22.
“We don’t stand to benefit from this lawsuit in any way,” Richter said. “Any refunded tax revenue will be passed along to the Class—people who are our customers and residents of Georgia, and who initially paid the taxes.”
The Georgia DOR and its counsel from the state attorney general’s office didn’t immediately respond to requests for comment.
The Georgia appeals court deferred to the DOR’s judgment in interpreting its own regulation, which the department said requires a dealer seeking a sales tax refund to reimburse the amount to customers upfront before the request will be considered.
AT&T argued that the regulation and related state law should be read as requiring customers to be refunded at a later point. The company said it would put millions of dollars at risk if it refunded customers before it knew whether the DOR would grant its refund request, according to the appeals court decision.
Judge Stephen Louis A. Dillard, writing the opinion for the three-judge appeals court panel, pointed to AT&T’s settlement agreement from the 2010 litigation to dispute the company’s point. The agreement provided for the company to pay refunds into an escrow account for customers whenever a taxing jurisdiction requires that the company reimburse customers before granting the company’s refund request, Dillard wrote.
The agreement “contemplates a scenario in which pre-payment to the customer is required but an ultimate refund from the Department is never obtained; and in such a situation, there is no ‘windfall’ to the customer because the amount pre-paid into escrow is returned to the appellants,” the judge wrote.
Bryan A. Vroon of Atlanta and Margaret C. Wilson of Wilson Agosto LLP represented the AT&T affiliates.
To contact the reporter on this story: Chris Marr in Atlanta at cMarr@bna.com
To contact the editor responsible for this story: Ryan C. Tuck at firstname.lastname@example.org
The Georgia Court of Appeals decision is at http://src.bna.com/mpa.
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)