March 29, 1995
TO: ACCOUNTING/TREASURERS MEMBERS No. 18-95
CLOSED-END FUND COMMITTEE No. 12-95
TAX MEMBERS No. 19-95
UNIT INVESTMENT TRUST MEMBERS No. 13-95
RE: GEORGIA INTANGIBLES TAX
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As you may know, last fall the Institute filed suit against the State of Georgia, challenging the
application of that state's intangibles tax to shares of mutual funds that invest in U.S. Government
Securities. The Georgia Department of Revenue has now conceded that the intangibles tax does not
apply to shares of a mutual fund or a unit investment trust to the extent the value of the shares reflects the
value of U.S. Government Securities held by the fund, if the fund or trust is organized as business a trust.
Attached is a letter from the Department of Revenue to a fund complex seeking information to assist it in
implementing the pro rata exemption.
The Department of Revenue has not issued any guidance indicating whether their change of
position has retroactive effect. The Institute's counsel in Georgia indicated that Georgia taxpayers
interested in seeking refunds of intangibles tax paid in prior years should submit a refund claim to the
Georgia Department of Revenue. There is no specific form for requesting a refund. Instead, a refund
claim should be in the form of a letter to the Department that includes legal and factual arguments
supporting the claim. The taxpayer will need to provide evidence showing the percentage of the fund or
trust's assets that was comprised of U.S. Government obligations.
The claim for a refund should be mailed to:
Ms. Shirley Gamble
Georgia Department of Revenue
P.O. Box 740386
Atlanta, GA 30374
The Institute is continuing to pursue litigation against Georgia challenging the application of the
intangibles tax to the portion of a fund's value attributable to U.S. Government obligations when the fund
is organized as a corporation.
We will keep you informed of developments.
Peter J. Cinquegrani
Assistant Counsel - Tax
Attachment