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Adrian Housing Corp. v. Collins, 253 Ga. 263, 319 S.E.2d 852

Facts

Adrian Housing Corporation, incorporated in 1962, fabricates modular homes and formed Gillis Home Sales, Inc. in 1979 to handle sales and delivery operations. Gillis operated as an independent contractor, selling homes on behalf of Adrian, which retained the risk of loss and reimbursed Gillis for expenses. The Revenue Commissioner audited Adrian's sales and determined that the transactions between Adrian and Gillis constituted sales of tangible personal property, leading to an assessment of additional sales taxes owed by Adrian.

Adrian was incorporated in 1962 and began fabricating modular homes and relocatable classrooms, a business in which it continues today.

Issue

Whether the transaction between Adrian Housing Corporation and Gillis Home Sales, Inc. constituted a sale of tangible personal property subject to sales tax under the Sales Tax Act.

Whether the transaction between Adrian Housing Corporation and Gillis Home Sales, Inc. constituted a sale of tangible personal property subject to sales tax under the Sales Tax Act.

Rule

Under OCGA § 48–8–2(8), a 'sale' is defined as any transfer of title or possession of tangible personal property for consideration, and under OCGA § 48–8–2(11), 'tangible personal property' is property that is perceptible to the senses.

Under OCGA § 48–8–2(8), 'Sale' means any transfer of title or possession, transfer of title and possession, exchange, barter, lease, or rental, conditional or otherwise, in any manner or by any means of any kind of tangible personal property for a consideration ….

Analysis

The court determined that the transaction between Adrian and Gillis involved a transfer of possession and title when Gillis' delivery crews accepted the modular homes at Adrian's plant. Despite Adrian's argument that the homes became realty upon delivery and installation, the court focused on the nature of the property at the time of transfer, concluding that the modular homes were tangible personal property subject to sales tax.

It follows, therefore, that the trial court did not err in granting summary judgment to the Commissioner and denying summary judgment to Adrian.

Conclusion

The Supreme Court affirmed the trial court's judgment, holding that Adrian Housing Corporation was liable for sales tax on the full sales price of the modular homes sold to Gillis Home Sales, Inc.

Judgment affirmed.

Who won?

Marcus E. Collins, Sr., Revenue Commissioner prevailed in the case, as the court upheld the assessment of sales tax against Adrian Housing Corporation based on the classification of the transactions as sales of tangible personal property.

Clarke and Smith, JJ., dissented.

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