Block., Inc., the owner of Square and CashApp, filed an action against the City of Atlanta et al. for refund of occupational taxes, which Block contends were collected in error. The Court of Appeals held that the City miscalculated the occupational taxes attributed to the City. The alternative calculation required division among all offices — those in Georgia and out of state. Additionally, the Court concluded that the taxpayer’s action was not one for declaratory judgment under Paragraph V, which would have required action exclusively against the City.
City of Atlanta v. Block, Inc. of Delaware, A25A0120, 2025 WL 1691937 (Ga. Ct. App. June 17, 2025)
- Paragraph V’s Exclusivity Requirement
The City first contends that the trial court should have dismissed Block’s lawsuit for lack of jurisdiction on sovereign immunity grounds because Block was seeking declaratory relief and failed to satisfy the “exclusivity” requirement of Ga. Const. of 1983, Art. I, Sec. II, Para. V (b) (2), which provides that only a municipality may be sued in this context. We find no error.
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The City first contends that the trial court should have dismissed Block’s lawsuit for lack of jurisdiction on sovereign immunity grounds because Block was seeking declaratory relief and failed to satisfy the “exclusivity” requirement of Ga. Const. of 1983, Art. I, Sec. II, Para. V (b) (2), which provides that only a municipality may be sued in this context. We find no error.
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Further, Block’s action focused on clawing back taxes it had already paid rather than seeking a resolution of uncertainty or prospective relief related to its future conduct, which are hallmarks of a declaratory action. . . . This was not a declaratory action.
- Calculation of Occupational Tax
The City next argues that the trial court erred in granting summary judgment to Block by finding that OCGA § 48-13-14 (a) (2) required the City to divide Block’s Georgia gross receipts reported to local Georgia governments by all Block locations nationwide that contributed to generating those Georgia gross receipts, rather than attributing all of the Georgia gross receipts to Block’s single Georgia location. We find no error.
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We conclude that the text of OCGA § 48-13-14, while not necessarily straightforward, is nonetheless unambiguous. Block argues that OCGA § 48-13-14 (a)’s introductory language, which provides, “[i]n levying occupation tax upon a business or practitioner with a location or office situated in more than one jurisdiction, including businesses or practitioners with one or more locations or offices in Georgia and one or more locations outside the state[,]” specifically contemplates the division of Georgia gross receipts among contributing out-of-state offices. (Emphasis supplied.) We agree.
OCGA § 48-13-14 (a) (2) clearly provides that a business with both Georgia and out-of-state offices, which may be subject to taxation by out-of-state jurisdictions, is not exempt from Georgia taxation — while also providing that the division of Georgia gross receipts as reported to local governments is accomplished only by using as the divisor the number of the business’s offices contributing to the generation of those receipts.7 Specifically, OCGA § 48-13-14 (a) (2) directs that businesses “shall divide the gross receipts reported to all local governments in this state by the number of locations or offices of the business or practitioner which contributed to the gross receipts reported to any local government in this state,” with those receipts being allocated via an equal percentage between each contributing office. (Emphasis supplied.) The statute’s plain language in no way limits the number of offices contributing to Georgia gross revenue to offices located within the State of Georgia.
