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Keywords

liabilitytrialregulation
trialmotionsummary judgmentappellantappelleemotion for summary judgment

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Law Lincoln Mercury, Inc. v. Strickland, 246 Ga. 237, 271 S.E.2d 152

Facts

Law Lincoln Mercury, Inc., an automobile dealership in Gainesville, Georgia, used six demonstrator cars for personal and business purposes from January 1, 1976, to October 31, 1978. These cars were driven by the dealership's president, salesmen, and their wives, primarily for transportation and community functions, and were kept at their homes overnight. One car was loaned to a local college as an educational demonstrator. All cars were used for more than six months, leading to the State Revenue Commission assessing sales and use tax on them in February 1979.

During the period between January 1, 1976 and October 31, 1978, six automobiles from appellant's inventory were used by the president of Law Lincoln Mercury, its salesmen and their wives as “demonstrator” cars.

Issue

Whether the dealership's personal use of demonstrator automobiles for over six months constituted a taxable event under the Sales and Use Tax Act.

Appellant first argues that the trial court erred in granting appellee's motion for summary judgment as there is a question of fact as to whether the “demonstrators” were used for purposes other than demonstration or display.

Rule

According to Code Ann. s 92-3410a (a), if a purchaser uses property for purposes other than retention, demonstration, or display while holding it for sale, the use is deemed a retail sale. Additionally, Regulation s 560-12-2.9 (5) states that if a car is used as a demonstrator for more than six months, the tax applies.

Code Ann. s 92-3410a (a) provides in pertinent part: “If a purchaser who gives a certificate makes any use of the property other than retention, demonstration, or display while holding it for sale in the regular course of business, the use shall be deemed a retail sale by the purchaser as of the time the property is first used by him.”

Analysis

The court applied the rule by determining that the dealership's use of the demonstrator cars for personal purposes exceeded the six-month threshold, thus triggering tax liability. The court noted that the dealership failed to provide evidence to rebut the presumption that the cars were not used solely for demonstration. The court emphasized that personal use, regardless of its significance, does not exempt the dealership from tax obligations.

Likewise the presumption arises in this case that appellant, having used the cars as “demonstrators” for more than six months, has not used them solely for the purposes of retention, demonstration or display. Rather than producing facts which would rebut this presumption, appellant has merely brought forth facts which are consistent with it.

Conclusion

The court affirmed the trial court's decision, concluding that the dealership was liable for sales and use tax on the demonstrator automobiles due to their personal use exceeding six months.

Therefore the trial court did not err in granting appellee's motion for summary judgment.

Who won?

State Revenue Commission prevailed because the court found that the dealership's personal use of the demonstrator cars constituted a taxable event under the Sales and Use Tax Act.

The court found that the dealership was liable for sales and use tax on the demonstrator automobiles due to their personal use exceeding six months.

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