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Inc. v. Town of Gay

Court of Appeals of Georgia, Second Division

June 15, 2018

COTTON PICKIN' FAIRS, INC. et al.
v.
TOWN OF GAY.

          MILLER, P. J., ANDREWS and BROWN, JJ.

          Miller, Presiding Judge.

         In this appeal, we consider whether OCGA § 48-13-6 (b) authorized the Town of Gay ("The Town") to levy an occupation tax on the exhibitors participating in the Cotton Pickin' Fair ("The Fair"), which is held in the Town. Cotton Pickin' Fairs, Inc. and The 1911 Society, Ltd. appeal from the trial court's order, which determined that their challenge to the occupation tax failed. We conclude that the Town was not authorized to levy an occupation tax on the exhibitors under OCGA § 48-13-6 (b) because the exhibitors do not have a "location or office" in the Town for purposes of the Fair, and were thus exempted from taxation. See OCGA §§ 48-13-5 (3), 48-13-6 (b). We therefore reverse.

Summary judgment is appropriate when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. We review a trial court's summary judgment ruling de novo, construing the evidence and all reasonable inferences favorably to the nonmovant.

(Citations and footnotes omitted.) Barclay v. Stephenson, 337 Ga.App. 365 (787 S.E.2d 322) (2016).[1]

         So viewed, the record shows that the Town is an incorporated municipality. Cotton Pickin' Fairs, Inc. is a for-profit corporation that sponsors the Fair, which is a two-day event held in May and October of each year. The property on which the Fair is held belongs to Ellen Gay McEwen ("Ellen"), who leases the land to Cotton Pickin' Fairs annually.[2] In preparation for each Fair, Ellen selects approximately 350 exhibitors from hundreds of applicants from around the country.

         In August 2006, the Town enacted a new occupation tax ordinance, providing, relevantly:

(a) An occupation tax is hereby levied annually upon all businesses and practitioners of professions and occupations with one or more locations or offices within the corporate limits of the town . . . in the amount of $30.00 for each business location or office with the town.

(Emphasis supplied.) The ordinance contained exemptions for several types of entities, including nonprofit organizations.

         Shortly after the enactment of this ordinance, John McEwen - Ellen's husband and the secretary-treasurer of Cotton Pickin' Fairs - formed The 1911 Society, Ltd., a domestic nonprofit corporation. The 1911 Society was organized in an attempt to meet the requirements of an agricultural fair sponsor under OCGA § 2-2-8. After the exhibitors for each Fair are selected, Cotton Pickin' Fairs assigns all exhibitor contracts to The 1911 Society.

         Prior to the Town's enactment of its 2006 ordinance, each exhibitor paid the Town a $30 occupation tax and a $5 application fee. After the enactment of the ordinance, The 1911 Society, through its attorney, informed the exhibitors that they were "operating under a contract with a tax-exempt agricultural fair, "[3] and the Town was therefore not authorized to levy an occupation tax against the exhibitors for their participation in the Fair. It is undisputed that Cotton Pickin' Fairs has consistently paid its occupation taxes since 2006.

         In July 2015, the Town filed a complaint against Cotton Pickin' Fairs and The 1911 Society, seeking a declaratory judgment regarding The 1911 Society's purported status as a tax-exempt agricultural fair sponsor; an injunction barring the Fair from being held in the Town until all Fair-related taxes and fees are paid; and monetary damages for the appellants' alleged interference with the Town's collection of occupation taxes from the exhibitors.[4] Cotton Pickin' Fairs and The 1911 Society moved to dismiss the complaint, arguing, inter alia, that under OCGA § 48-13-6 (b), the Town's authority to impose an occupation tax did not extend to the exhibitors because the exhibitors did not have a "location or office" in the Town for purposes of the Fair. Cotton Pickin' Fairs also counterclaimed for a declaratory judgment and sought an injunction barring the Town from attempting to collect taxes from the exhibitors on the same grounds.

         The trial court converted the motions to dismiss into motions for summary judgment, having deemed it necessary to consider evidence beyond the pleadings. See OCGA § 9-11-12 (b). Based on a review of the evidence, the trial court found, inter alia, that the appellants lacked standing to argue that the exhibitors did not have a location or office in the Town. Nevertheless, the trial court also addressed the issue on the merits, rejecting the appellants' contention that a "temporary work site" exception under OCGA § 48-13-5 (3) barred the Town from collecting a business license fee or occupation tax from the exhibitors. This appeal followed.

         1. In interrelated enumerations of error, the appellants contend that the trial court erred in ruling that the "temporary work site" exception in OCGA § 48-13-5 (3) did ...


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