This responds to your request for an unofficial opinion regarding whether the conclusions stated in 1987 Op. Att’y Gen. U87‑3 (hereinafter “the opinion” or “the 1987 opinion”) remain valid under current law. In your request, you indicate that several municipalities within your district are attempting to collect license fees from wholesalers of alcoholic beverages that are not located within those municipalities, but that take orders for sales within those municipalities and then make deliveries within those municipalities. For reasons that follow, I conclude that local governments are not empowered to require licensing of wholesalers of alcoholic beverages that take orders for sales and make deliveries of alcoholic beverages within those local governments, but do not have locations or offices within the boundaries of those local governments.
Related to alcoholic beverages, O.C.G.A. § 3‑3‑2(a) provides that “the manufacturing, distributing, and selling by wholesale or retail of alcoholic beverages shall not be conducted in any county or incorporated municipality of this state without a permit or license from the governing authority of the county or municipality.” Therefore, at first glance, the answer to the question of whether local governments may require licenses appears to be addressed as a matter of statute. However, the conclusion is not so clear. 1987 Op. Att’y Gen. U87‑3 addressed the question of whether a county may require a wholesaler of beer to obtain a county license to sell beer if the wholesaler is “doing business” in a county, but has its principal place of business in another county. In concluding that a county where the wholesaler is doing business may require a license, the opinion analyzes a number of Georgia cases and statutes.
After discussing O.C.G.A. §§ 3‑5‑40, 3‑5‑41 and 3‑5‑43 which address distribution and licensing related to beer, 1987 Op. Att’y Gen. U87-3 sets forth a broad initial conclusion that
[t]he particular provisions of the Georgia Alcoholic Beverage Code referred to above demonstrate not only an intent to permit a wholesale license fee to be charged in the county where a wholesaler maintains a principal place of business, but also extends the license requirements to those who manufacture and distribute, as well as sell, beer in counties other than where their principal place of business is located.
The opinion then states that the relevant question to be addressed is
[w]hether wholesalers engaging in activities such as taking orders through traveling salesmen and making subsequent deliveries of beer may be said to be ‘doing business’ within the county such as would permit the imposition of the license fee now provided for in O.C.G.A. § 3‑5‑43.
The analysis in 1987 Op. Att’y Gen. U87-3 begins by discussing the Georgia Supreme Court’s decision in City of Gainesville v. Georgia Crown Distributing Co., 231 Ga. 352 (1973). In Georgia Crown, the court interpreted former Ga. Code § 92‑4105 and former Ga. Code § 58‑739.5 and concluded that a local government is not authorized to require an alcoholic beverage wholesaler that sells distilled spirits and wine to obtain a local license and pay a local license fee unless the wholesaler actually “‘does business’” in the local jurisdiction. 231 Ga. at 353. Former Ga. Code § 58‑739.5 (1950 Ga. Laws 185, 186), quoted by the court, provided:
Where a wholesale dealer is licensed to do business in one city, or county and does business in other cities and counties, no city or county other than the city or county in which the business is located shall charge a license fee against said wholesaler to exceed $100.
231 Ga. at 353. Regarding former Ga. Code § 58‑739.5, the court said:
We interpret this statute to mean that when the license fee is authorized, it may not exceed $100. But the statute still requires, for imposition of the license fee, that the wholesaler “does business” in a city or county other than where the wholesaler’s business is located.
231 Ga. at 353.
The opinion next discusses the Georgia Supreme Court’s decision in Fruit Co. v. City of Dalton, 184 Ga. 277 (1937). In Fruit Co., the Georgia Supreme Court ruled that a distributor of beer was not required to obtain a local license from the City of Dalton where the wholesaler’s business was located in the City of Rome and the wholesaler’s salesmen took orders from retailers in Dalton that the wholesaler’s personnel later delivered. 184 Ga. at 280. In doing so, the court relied on former Ga. Code § 92‑4105 (1896 Ga. Laws 36) which at the time provided that “‘[t]he authorities of any municipal corporation shall not levy or collect any tax or license from a traveling salesman engaged in taking orders for the sale of goods where no delivery of goods is made at the time of taking such orders.’” 184 Ga. at 278.
The opinion goes on to discuss the Georgia Supreme Court’s decision in DeKalb County v. Empire Distributors, Inc., 229 Ga. 497 (1972). In Empire Distributors, the court ruled that wholesalers of distilled spirits that were based in Fulton County were not required to obtain licenses in DeKalb County where salesmen working for the wholesalers took the orders from retailers in DeKalb County, returned the orders to the wholesalers, and the wholesalers then delivered the orders separately. In interpreting a local ordinance and the local constitutional amendment authorizing the ordinance, the court concluded that the wholesalers were not actually “‘doing business’” in DeKalb County and that no license was required from DeKalb County. 229 Ga. at 501.
After analyzing the Fruit Co., Georgia Crown, and Empire Distributors decisions as well as the relevant statutory authority, the 1987 opinion concluded “that counties may indeed require a wholesaler to hold county licenses in every county where it ‘does business.’”
Therefore, the 1987 opinion requires a finding that the wholesaler “does business” in a particular county before a license may be required. In considering the question of what it means to “do business” in a particular locality, the Empire Distributors case concludes that a wholesaler is not “doing business” in a county by simply sending salesmen into the county to take orders, filling those orders from an office in another county, and then delivering the orders from that office by other employees of the wholesaler. 229 Ga. at 501.
The language of former Ga. Code § 92‑4105 does not appear in the current Code, but its prohibition is carried forward in another provision in the current Code. The successor to former Ga. Code § 92‑4105 is O.C.G.A. § 48‑5‑354, which provides as follows:
The provisions of Article 1 of Chapter 13 of Title 48 shall govern municipal and county occupation taxes for the following: traveling salespersons engaged in taking orders for the sale of goods when no delivery of goods is made at the time of taking the order; a merchant or dealer, the situs of whose business is outside the taxing jurisdiction, who delivers goods previously ordered; and the employees of a merchant or dealer who are engaged in the delivery of the goods to customers.
Fruit Co. addresses licensing of a beer wholesaler and Georgia Crown addresses licensing of a wholesaler of beer and wine while Empire Distributors addresses licensing of a distilled spirits wholesaler. While the analysis and authorities relied upon are somewhat different, the legal conclusion of the three cases is the same and that conclusion is made clear under current law applicable to the levy of occupation taxes. Under Article 1 of Chapter 13 of Title 48, counties and municipalities are “authorized but not required to provide by local ordinance or resolution for the levy, assessment, and collection of occupation tax on those businesses and practitioners of professions and occupations with [or which have] one or more locations or offices in the . . . [county or municipality].” O.C.G.A. § 48‑13‑6(a), (b) (emphasis added). The term “location or office”
shall include any structure or vehicle where a business, profession, or occupation is conducted, but shall not include a temporary or construction work site which serves a single customer or project or a vehicle used for sales or delivery by a business or practitioner of a profession or occupation which has a location or office.
O.C.G.A. § 48‑13‑5(3) (emphasis added). Thus, O.C.G.A. § 48‑13‑5(3) expressly excludes delivery and sales vehicles of businesses from the definition of a “location or office” which is required to exist before a county or municipality is authorized to levy an occupation tax upon a business. In the absence of a location or office, sales and deliveries within a local jurisdiction, without more, do not constitute “doing business” within that jurisdiction as would trigger the requirement for a license from the jurisdiction.
Therefore, it is my unofficial opinion that the conclusions set forth in 1987 Op. Att’y Gen. U87-3 continue to be accurate under current law and that local governments are not empowered to require licensing of wholesalers of alcoholic beverages that do not have locations or offices within the boundaries of those local governments, but that take orders for sales and make deliveries of alcoholic beverages within those local governments.
This language appears to have been in the Code since soon after the repeal of prohibition. Day v. State, 53 Ga. App. 487, 488 (1936) (citing 1935 Ga. Laws 73, § 15A).
The powers of counties and municipalities are derived from the State. See 2004 Op. Att’y Gen. 04‑10. In the area of alcoholic beverages the regulatory power of local governments is substantial. See Grovenstein v. Effingham Cty., 262 Ga. 45 (1992). However, the powers of local governments only extend so far as authorized by the General Assembly. Gebrekidan v. City of Clarkston, 298 Ga. 651 (2016).
The language of former Ga. Code § 5‑739.5 now appears in large part in O.C.G.A. § 3‑5‑43.
In a 1953 opinion, the Attorney General concluded that wholesalers of alcoholic beverages that are located and licensed in one local jurisdiction may be required to obtain a license in another local jurisdiction. 1953 Op. Att’y Gen. 458. 1953 Op. Att’y Gen. 458 relies in part for this conclusion on McCullough Bros., Inc. v. City of Griffin, 181 Ga. 832 (1936). The Fruit Co. decision indicates that McCullough is not binding authority as only four justices concurred in the opinion. 184 Ga. 280. In addition, Fruit Co. indicates that McCullough conflicts with other unanimous decisions and should not be followed. Id. In light of subsequent decisions discrediting the McCullough decision relied upon in the 1953 opinion, the conclusion of 1953 Op. Att’y Gen. 458 is no longer a correct statement of the law in Georgia and should not be relied upon for guidance.
W. Wright Banks, Jr.
Deputy Attorney General
Sarah L. Crile
Assistant Attorney General