In City of Atlanta v. Block, Inc., the Court of Appeals of Georgia affirmed that a multistate company should include its offices nationwide, not just its one office in Georgia, when calculating its occupation tax.

Facts

Block, Inc. (Block) (owner of CashApp) had multiple offices nationwide, with only one office in Georgia. Block paid business occupation taxes to Atlanta for 2016 through 2018 on its gross receipts from Georgia customers. In 2019, the city assessed an additional occupation tax on those receipts, plus penalties and interest, which Block paid under protest. Block then filed this lawsuit seeking a partial refund, claiming that the city did not properly account for its out-of-state offices in calculating the occupation tax.

Issue

Calculation of the business occupation tax is based on a company's gross receipts. The dispute centered on how those receipts should be allocated when a company operates in multiple locations, including outside Georgia.

The trial court had granted summary judgment to Block, finding that Block's occupation tax should be calculated based on its Georgia gross receipts divided by the number of Block offices nationwide, rather than divided by Block's sole Georgia office.

Legal arguments

Block's arguments

Block argued that Georgia law (OCGA Section 48-13-14) and Atlanta Code Section 30-80, required the tax to be allocated on a percentage basis, by dividing the reported Georgia gross receipts by the total number of offices, including out-of-state locations, that contributed to the Georgia revenue.

City's arguments

The city argued that only Block's Georgia office, not its out-of-state offices, can be deemed to have "contributed to" its Georgia gross receipts. Therefore, the occupation tax should be based on Block's entire amount of Georgia gross receipts (because it would only be divided by one).

Holding

The appeals court affirmed the summary judgment ruling for Block, holding that under the plain language of the statute, Block's Georgia gross receipts should be divided by all its offices (including out-of-state offices) contributing to the Georgia gross receipts. The court added that the statute's plain language does not limit the number of offices contributing to Georgia gross revenue to offices located within Georgia.

Implications

This ruling opens an opportunity for all businesses that file Atlanta business occupation taxes and have non-Georgia operations or locations to be eligible for a refund. As Atlanta has the option to appeal to the Georgia Supreme Court, taxpayers should consider filing protective refund claims.