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Did Supreme Court step into HB 399 debate?

Justices say College Park can collect occupational taxes at airport

— Victory has been achieved in an ongoing battle over a tax assessed to businesses at Hartsfield-Jackson Atlanta International Airport, but it’s not the tax some people might think of.

Clayton County officials are strategizing how they will fight proposed legislation to stop them from collecting ad valorem taxes at the airport. While they’ve been busy with that, however, the Georgia Supreme Court has ruled College Park can collect occupational taxes on many of those same businesses.

They are different taxes but they’re taxes nonetheless — and they are tied together by timing.

The court’s ruling now brings up one key question: How will it impact the House Bill 399 fight? The portion of College Park located in Clayton County is small, but it could affect the entire county if the court’s ruling plays into the legislative debate.

“We’re still trying to find out what impact it is going to have on 399 — if any — because I think we’re talking about two different issues,” said Clayton County Commission Chairman Jeff Turner. “We’re trying to form a committee of people to find out exactly what the impact is and how we move forward over the summer.”

Taxation power lies at the heart of quarrels over occupational taxes and ad valorem taxes. Specifically, both issues address the question of whether businesses at the world’s busiest airport should be financially beholden to any governments other than the city of Atlanta, which operates Hartsfield-Jackson.

Atlanta and College Park reached an agreement 44 years ago that gave Atlanta the “exclusive right” to levy occupational taxes on businesses operating in the parts of airport located in College Park.

Fast forward to 2007 and College Park decided to back out of that agreement and begin collecting the occupational taxes. Atlanta sued and a Fulton County Superior Court judge ruled the 1969 was unenforceable, but that Atlanta also constituted a “local authority” which meant state law barred College Park from collecting the taxes.

The Georgia Court of Appeals partially overruled that decision, however, and found that Atlanta did not meet the description of a local authority, the state Supreme Court upheld that decision in a ruling issued last week.

“With respect to its responsibility to pay a tax, a municipality is not necessarily exempted from paying taxes whenever it conducts activities outside of its own territorial limits that would otherwise subject it to paying a tax,” justices wrote in their decision.

College Park spokesman Gerald Walker deferred comment on the court’s ruling to Mayor Jack Longino, who was not immediately available Thursday.

Although it may be too early to fully grasp the impact of the court’s ruling on the House Bill 399 battles, there is one part of the written decision that might play a role in the debate.

The key issue in the House Bill 399 battle is whether Clayton County has the legal authority to collect ad valorem taxes from businesses leasing space at the airport.

The bill’s author, state Rep. David Knight (D-Griffin), has argued it is not fair for the county to collect those taxes since the airport is owned by a government.

However, the justices also cited in their decision a 2007 Court of Appeals case where Clayton County’s tax assessor’s board sued Atlanta over ad valorem taxes.

In that case, the lower court ruled that “when Atlanta acts in its capacity as a lessor at the airport for the purpose of obtaining revenue, it is acting in a proprietary capacity and not carrying out a governmental function,” according to the Supreme Court’s decision.

The justices later added that at least in the case of occupational taxes, “ ‘Municipalities’ that engage in revenue-generating business within the corporate limits of another municipality are not specifically listed as entities that would be exempt from paying occupation taxes” under state law.

They also noted that while there is some ambiguity in state law, municipalities are not defined as local authorities.