X
X

Find Your Specialist

X

Contact Us

Go Back

Georgia Supreme Court Ends Stand-off Between Cellphone Companies and DOR on Data Tax Refunds

Between 2005 and 2010, four AT&T subsidiary cellphone companies collected and remitted to the Georgia Department of Revenue (DOR) $6 million in sales tax on internet data services. The problem is, these services were exempt from sales tax under Georgia law, so the taxes were collected in error.

The companies filed for a refund with the DOR in 2010, and the DOR officially refused to pay the requested refund claims. The companies sued and lost before the Georgia Court of Appeals. Now, the Georgia Supreme Court has reversed that case and told the DOR to pay up.

In Cingular v. Georgia Department of Revenue, the Georgia high court reviewed the DOR’s position that it would not refund any of the collected sales taxes until the cellphone companies refunded the money to their customers. Both the trial court and the Georgia Court of Appeals held that the companies had to refund the taxes to the customers before the companies could seek a refund from the DOR.

In reversing the earlier courts, the Georgia Supreme Court found this position unreasonable and unfair. The opinion gives a hypothetical example that, under the DOR’s position, a company could have to prepay $100 million in refunds to its customers only to potentially be told later by the DOR that it was denying the refund claim.

“This is illogical and creates a strong disincentive for dealers to seek refunds on behalf of customers,” the Court said. The Court also noted that the DOR took five years to deny the companies’ refund claims. It is estimated that consumers in Georgia are owned over $6 million in refunds from the erroneously-collected tax. The decision clears the way for the wireless companies to set the refund process in motion. AT&T spokesman Marty Richter has said that any refunded taxes will be passed along to the Georgia customers who initially paid the taxes.

Related Articles

Privacy Overview

When you use or access the Site, we use cookies, device identifiers, and similar technologies such as pixels, web beacons, and local storage to collect information about how you use the Site. We process the information collected through such technologies, which may include Personal Information, to help operate certain features of the Site (e.g., to prevent online poll participants from voting more than once), to enhance your experience through personalization, and to help us better understand the features of the Site that you and other users are most interested in.

You can enable or disable our use of cookies per category.
Necessary
Always Enabled

Essential cookies enable you to navigate our Site and use certain features, such as accessing secure areas of our Site and using other features of our service that require us to keep track of certain information as you navigate from page to page. Although some of these cookies are “required” to enable certain functionality, you can disable them in the browser, but doing so will limit your ability to use the features supported by such cookies.

Functionality

Functionality cookies are cookies that support features of the Site, such as remembering your preferences.

Performance

These cookies collect information about how you use our Site, including which pages you go to most often and if they receive error messages from certain pages. These cookies are only used to improve how our Site functions and performs.

Tracking or Targeting

From time-to-time, we may engage third parties that track individuals who visit our Site. These third parties may track your use of the Site for purposes of providing us with certain marketing automation features (to help us improve our outreach to current and prospective clients) and providing you with targeted advertisements.