Your Weekly Constitutional

Law offices don’t have to pay business occupational taxes. Who knew? Apparently there’s a rule, created by lawyers (naturally) that declares a business occupation tax a “regulation,” and since only the Supreme Court of Georgia can regulate attorneys in their practice of law, quid erat retainer, no business tax on law offices.

The city of Dunwoody is attempting to levy a tax on law offices. Their “business occupation tax” appears to be nothing more than an attempt to create a revenue source for the city -not that there’s anything wrong with that per se, cities need revenue and business licenses, occupational taxes and red-light cameras are among the many ways they collect it.

But the Constitutional question seems to come down to whether or not this “business occupation tax” is a “regulation of the practice of law.” We know that penalties for not buying health insurance (as mandated by Obamacare) are taxes, because the US Supreme Court told us so last year.  But are local taxes also “regulations?” Unless Dunwoody has singled out law offices for the $400 fee, or trying to direct attorneys to practice one kind of law rather than another, it doesn’t appear so. But that’s a common-sense, plain-language take on the matter. You can watch real lawyers argue for and against after the jump, and decide for yourselves.

H/T to John Heneghan for pointing the issue out.







  1. Here’s how Cobb does it – “Individuals engaged in any of the following professions have the option of paying an occupation tax on gross receipts of the business or pay an annual professional occupation tax of $400 per professional.” Note that Attorney is listed in the list of occupations. I’m not sure what the ramifications are for not paying the tax.

      • I don’t know. Having sat here and watched the “Against” video during my lunch break (haven’t gotten to the “For” yet) it sounds to me like he just needs to pay it. He doesn’t seem so upset about being required to pay the fee as he is upset that they could report him to the bar. He admits that not paying federal income taxes is a crime, because he’s violating a law. Is a municipal ordinance the same thing as a law? If so, by not paying the fee / tax / whatever, isn’t he violating the law there as well? And it seems to follow reason that an attorney breaking a law would warrant reporting them to the state bar, no? I’m not a lawyer and don’t play one on TV, but it sounds to me like he needs to pay up.

        As well, if lawyers doesn’t have to pay, why should any other profession / occupation have to pay? Why should my farm pay an occupation tax? After all, we’re already kind of sort of regulated by the Department of Agriculture in a couple of different respects. Should I really have to pony up another fee / tax to my local county as well? 🙂

        • Well, you have to pay a tax because you’re not a part of the judicial branch of government, which is the concept at work here, I think. You can’t have executive/legislative branches “regulating” the judicial branch, which is derived from the practice of law -that’s my guess as to what the thinking was when they passed this part of the constitution, anyway.

          • See, I wouldn’t say lawyers are part of the judicial branch. Judges are, but lawyers are simply those who help people navigate the judicial system (IMHO).

  2. Corvid says:

    So the city actually included language in the ordinance to encourage a bar complaint against attorneys who don’t pay a disputed tax.


    Someone in Dunwoody sure knows how to kick a lawyer where it hurts!

    Why not just raise the amount of a business license for law offices? It would have been easier and cheaper than going to the Supreme Court.

  3. In an email to me, Jay Ernst (an actual attorney) says this: “This is actually settled case law, attorneys do not have to pay the tax, The GA Supreme Court in a case dealing with the City of Atlanta (I think the first city to think, hey, professionals should pay some more money) states that the regulation of the practice of law is completely under the Supreme Court and no other entity can try to regulate it (the GA Bar is under the Supreme Court itself). But there are many attorneys who really don’t know this and when they get a bill just pay it. But if for those attorneys who do not, there is no way for the cities/counties to enforce them.

    Your question on Cobb county is that again, the county can not enforce the law so probably as long as the county does not bring an action to get the attorneys to pay, what is there to fight?”

    • Interesting. I would question the “occupational tax” being considered “regulation”.

      Regulation: “A principle, rule, or law designed to control or govern conduct.”

      I wouldn’t say the counties / municipalities are trying to govern conduct. It’s a rather binary situation… If you want to practice law in our county / municipality, you pay the occupation tax. They’re not trying to govern the actions of lawyers, client / lawyer confidentiality, etc.

      So with all of that in mind, doctors are licensed by the medical board or something like that in Georgia, right? Could they refuse to pay the occupational tax as well, since they’re “regulated” by that medical board?

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