An Open Letter Regarding the Occupation Tax for Attorneys
Dear Colleagues:
Many of you may have already heard about the “attorney tax case” which was litigated as a class action for six years and decided by the Georgia Supreme Court last fall. Basically, the imposition of the general occupational tax on attorneys was challenged in 2000 as a precondition to the practice of law. In 2006 after six years of litigation, the Supreme Court upheld the challenge which will result in the City’s issuing refunds of the taxes to lawyers for the period of 1996-2004. The tax was never held to be illegal, but the manner of its collection was found problematic. The City revised the tax ordinance in 2004 to correct the deficiencies and continues to collect the tax from lawyers today.
In the course of the litigation, there was no opportunity for lawyers to opt out of the class prior to the ruling – although some requested to be excluded. The court has now allowed the City the opportunity to seek waivers of the refund from lawyers and law firms, and I am asking you to consider such a waiver to allow your previous tax payments to continue to be used by the City for services and programs. Other professions have paid their occupational tax, and I’m hopeful that our profession will show continued support for the City despite the ruling and required refunds.
The expected refund liability for the City appeared to be $4 million until 2005. Following the Supreme Court’s ruling, and reversal of the Court of Appeals’ ruling, the refund liability now exceeds $18 million – inclusive of tax years of 1996-2004.
As you are aware Mayor Franklin’s administration has faced serious challenges restoring the financial health and fiscal accountability of our City, and her administration inherited the litigation and problematic taxing provision. While it could be debated whether the case could have been resolved more quickly and with better results for the City, it was not. Consequently, the City is seeking assistance with the total financial burden by asking your consideration of a wavier of your refunds. The refund obligation will come due at a crucial time as Mayor Franklin has outlined plans to continue to improve the City’s financial health and the services and benefits of the City, including additional investments in public safety, solid waste management, parks maintenance, technology, public works, economic development and community engagement, and planning.
To demonstrate support for the City and understanding that attorneys should bear the same tax responsibilities as other professionals enjoying the benefits and services of our City, the Atlanta Bar Association passed a resolution urging attorneys to forego their refunds. A copy of the resolution is on the Atlanta Bar Association website (www.atlantabar.org). Law firms paying the tax for their attorneys may have waived the refund on behalf of their attorneys. The City is has processed refund checks to individual lawyers beginning in July. If you paid the tax during the applicable period (1996-2004) and neither you (nor your firm) waive the refund, a check will be mailed to you – net of the attorney fees and expenses the City paid. You may complete the Occupational Tax claim form, if you choose to have your refund applied as a credit toward your future Occupational taxes.
If you have questions about the refund process, some of those questions may be answered in the following informational link (FAQ).
I appreciate your consideration of this request and your continued support for our City. Questions can be emailed to lawdepartment@atlantaga.gov.
Sincerely,
Elizabeth B. Chandler
City Attorney