Head v. Rich

¶1 dissenting. I am of the opinion that the General Assembly is without authority to exempt the stockholders of a corporation, organized originally in this State, from taxation, unless it does so for the purpose of relieving such stockholders from the burden of double taxation and unless such exemption actually has this effect. Code, §§ 2-5002, 2-5003, 2-5005. Unless such an attempted exemption has the above purpose and effect, it would be discriminatory against the stockholders of foreign corporations residing in the State. It follows that any act of the General Assembly exempting from taxation stockholders of corporations organized originally in Georgia must be construed to mean that it applies to stockholders in corporations which pay such taxes to the State of Georgia as would make it double taxation to tax the stockholders on their stock in addition to such taxes on the corporation; and that is the meaning of the ruling in Georgia Railroad &c. Co. v. Wright, 125 Ga. 589 (supra). If an exemption statute is construed to mean that the stockholders of a corporation organized originally in Georgia are exempt from taxation on the stock in such corporation simply because it pays what taxes it owes the State, regardless of whether the amount of taxes it pays amounts to double *297 taxation of the stockholder, I think it is unconstitutional as applied to a stockholder of a corporation which does not pay such taxes on its property to the State as to make the taxation of the stock double taxation. The General Assembly can not exempt the stockholders of domesticated corporations if it can not exempt the stockholders of corporations originally organized in Georgia of the same class and kind and if it meant that the same exemption should apply to stockholders of domesticated corporations it could mean no more than the like exemption granted to the local corporations. It may be that under my interpretation of the exemption statutes, Rich’s Inc.’s stockholders are entitled to the exemption but the record does not show what taxes the corporation paid. It simply shows that it paid all taxes due the State. While this is the language of the act, if it is to be constitutional it must be given the construction that the taxes referred to are such taxes as will make the taxation of the stock double taxation. This court can not take judicial notice of the fact that Rich’s Inc. paid such taxes. The effect of the majority opinion in this case will be to exempt the stockholders of every domesticated corporation and every corporation organized originally in Georgia, regardless of how little property each owns in Georgia and of how insignificant a sum each pays in taxes to Georgia, simply because each pays to Georgia the taxes required by law. Under the holding of the majority a stockholder of a Georgia corporation, or a domesticated corporation, would be exempt in a case where the corporation owned a hundred dollars worth of taxable property in Georgia and fifty million dollars worth outside of Georgia, if it paid to Georgia the taxes the law requires it to pay on the one hundred dollars worth in the State. I do not think that such an exemption is constitutional, and therefore I must dissent from the ruling which gives to such exemption statute what I consider- an unconstitutional construction. If such a construction must be made, its constitutionality should be inquired into by the proper forum.