Funvestment Grp., LLC v. Crittenden, 893 S.E.2d 60 (Ga. 2023)
On appeal, Funvestment contends that the exemption in OCGA § 48-8-3 (43) clearly applies to leases of COAMs; that the term “gross revenues” includes the “leased income” a dealer or COAM owner receives from a person to whom a COAM has been leased; and that, since the enactment of this exemption in 1992, the General Assembly has consistently maintained and applied it to revenues generated from both the participation plays and leases of COAMs.
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Certainly, when a customer inserts money into a COAM for play, it generates revenue for the location owner. See OCGA § 50-27-70 (b) (8). However, when a person to whom a COAM has been leased makes a lease payment on the subject COAM, it also generates revenue for the person leasing the COAM (i.e. the dealer or COAM owner). See OCGA § 50-27-70 (b) (13).
In this case, Tiny Towne leases the subject COAMs to Funvestment, and in this context, the COAMs generate income (or revenue) for Tiny Towne when Funvestment makes the corresponding lease payments. And, as noted above, in accordance with OCGA § 48-8-30 (d) (1), Funvestment would typically be required to pay sales and use taxes to Tiny Towne for its lease of these COAMs, and Tiny Towne would then be required to remit those taxes to the DOR, unless the exemption at issue—or some other exemption—applied.
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Because the statute at issue in this case—OCGA § 48-8-3 (43)—creates an “exemption from taxation,” if there was any ambiguity in the statute, we would resolve it in favor of the State—i.e., in favor of taxability. Cherokee Brick & Tile Co., 209 Ga. at 693 (1), 75 S.E.2d 550. See also Owens Corning, 283 Ga. at 490, 660 S.E.2d 719. However, as we concluded above, the plain language of OCGA § 48-8-6 (43) is “clear and unambiguous,” and thus, we need not construe it in favor of the State but in accordance with its explicit terms. Owens Corning, 283 Ga. at 489, 660 S.E.2d 719.
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Accordingly, because the plain language of OCGA § 48-8-3 (43) applies to revenues generated by COAMs, which includes revenues generated from the lease of COAMs and revenues generated from the participation plays of COAMs, we conclude that the Court of Appeals erred in concluding that the exemption did not apply to the lease revenues generated in this case, and we reverse the judgment of the Court of Appeals.