The city of Atlanta may have to repay millions of dollars of taxes it improperly collected at Hartsfield-Jackson International Airport to College Park, according to a court ruling.
Atlanta has been collecting the occupational taxes for businesses at the airport that actually are in the city limits of College Park based on terms of a 1969 contract. In 2007, College Park said it was going to start collecting the taxes.
The issue went to the courts, and on Thursday the Georgia Court of Appeals agreed with College Park: The small city is entitled to repayment of taxes collected. Atlanta also has to pay its own occupational tax -- or business licensing fee -- to College Park, based on income from airport leases, according to the ruling.
But it wasn’t immediately clear how much money that could amount to.
“That could be a big number,” said Michael Bell, former chief financial officer at Atlanta and DeKalb County. “It could well be millions of dollars. It is an issue that will have long-term implications.”
Atlanta spokesman John Kennedy said he was unable to determine how much city tax income would have to go to College Park or even how much occupational tax Atlanta collects from the airport each year.
Kennedy said the city would not comment on the lawsuit or its related issues.
Back in 2007, Atlanta sued College Park to stop it from collecting the taxes. College Park contended their original 1969 contract was invalid.
The city, Kennedy said, is “disappointed” with the decision and is currently evaluating its next steps.
In this tight budgetary year, the court’s ruling could mean Atlanta would have to make cuts elsewhere. Steve Fincher, city attorney for College Park, said Atlanta would have to make payments from 2005.
College Park has not calculated the projected annual revenue. Fincher said it would be at least in the "significant six figures" and easily more because the prime revenue generators, including rental car companies, are in College Park.
The court’s ruling covers any property at the airport within College Park’s boundaries: That would include the main terminal, Concourse A and part of Concourse B.
Bell, now a professor at Georgia State University whose dissertation dealt with the airport and its jurisdictional issues, said that could account for approximately a million square feet of space leased from Atlanta.
“Atlanta is the functional equivalent of the operator of Lenox Square,” Fincher said. “They are going to have to buy a business license from us which is based on their gross receipts from those [rental] operations.
“It would be a very significant sum.”
The ruling represented the second financial airport-related victory that College Park has claimed over Atlanta recently.
Earlier, a court ruled that College Park only owed Atlanta $7 million on a contract to buy back land around the airport while Atlanta contended its smaller neighbor owed as much as $21 million, Fincher said.
College Park City Manager William Johnson said the recovered occupational taxes will provide much-needed financial relief for the city of about 20,000 people, which just passed its fiscal 2012 budget of about $114 million Wednesday.
That budget was about $5 million less than fiscal 2011, he said.
“Definitely it will be a big help for our general fund,” he said. “We just finished with our most difficult budget ever.”
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