The Georgia Supreme Court ruled Monday that Clayton County cannot receive property taxes from concessions at Hartsfield-Jackson International Airport, a decision the could cost the county millions.
The unanimous ruling said operators of shops and restaurants at the airport cannot be assessed property taxes because they are not the custodians of "real property," but are essentially lessees to the city of Atlanta, which owns the airport and can move them around or end leases at any time.
Because having lease is not the same as ownership, “It is not subject to ad valorem property tax,” the court said.
Clayton County Commission Chairman Jeff Turner said while disappointing, the county would abide by the ruling. But Clayton does not plan to refrain from seeking what it thinks as fair taxes from a facility within its borders.
“Clayton County will continue to look for ways to collect and tax revenue from the airport,” he said
The decision on Clayton's case against a duty-free shop operator that was known as Aldeasa Atlanta Joint Venture could impact other cases where Clayton has sought to tax concessionaires, and could cost the county millions in refunds for property taxes already collected.
“Hopefully this decision will now end this long-running property tax dispute between Clayton County and airport concessionaires, and Clayton County should refund the property taxes that were illegally collected from Aldeasa and other similarly-situated airport concessionaires,” said Scott Wright, a partner at Eversheds Sutherland representing Aldeasa, in a written statement.
Monday’s court ruling dates back to 2011, when the Clayton Board of Tax Assessors issued real property tax assessments to Aldeasa.
During a Georgia Floor debate in 2014 on a bill to clarify the tax code, Gainesville state Sen. Butch Miller said “millions of dollars have been collected in taxes over the years that were inappropriate, and we are seeking to correct that.”
Wright called Monday’s ruling “a complete victory for taxpayers at the Georgia Supreme Court.”
The decision also comes as a blow to Clayton, which just weeks ago was told it could no longer collect an estimated $18 million it was getting annually from jet fuel tax at Hartsfield-Jackson. Clayton had split the revenue with the county's school district for more than a decade, but earlier this month Gov. Nathan Deal axed future collections.
Deal, hoping to ensure the state doesn’t lose federal transportation funding in the future for not complying with Federal Aviation Administration regulations, announced he was ending the fuel tax collections July 1. The collections had drawn the ire of the FAA, which argued that such collections should be spent at the airport that is their source.
The state gave Clayton $27 million two weeks ago to make up for the lost revenue while the county's school system has received a pledge of financial support from Delta Air Lines, though the dollar value of that promise has not been released.
“We appreciate the governor that, but that money going to run out,” Turner said in explaining why the county will continue to seek revenue.
“Hartsfield is in our backyard, but our county benefits the least from being home to the world’s busiest airport,” he said. “We have consistently seen our ability to collect taxes from the airport stripped from us.”
Georgia Supreme Court nixes Clayton County airport concession tax
The state Supreme Court ruled on Monday that Clayton County’s Board of Assessors cannot tax concessions leases at Hartsfield Jackson International Airport because they are not real property. Here’s a timeline of the case.
2007 — Concessionaire Aldeasa Atlanta Joint Venture leases two spaces at Hartsfield-Jackson International Airport
2011-2012 — Clayton County Tax Assessor’s Office issues property taxes on the spaces
2012-2015 — Aldeasa appealed the assessments, the Clayton County Board of Equalization upheld the assessments, then Aldeasa appealed to the Clayton County Superior Court, which later ruled in its favor.
2018 — The Georgia Supreme Court upheld the lower court ruling.
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