Taxpayer Triumph: Georgia Court’s Decision on the Atlanta Business Tax Allocation

By: Jess Johannesen, SALT Director

At a glance  

• The main takeaway: A Georgia court ruled that the City of Atlanta incorrectly calculated business occupation taxes for businesses that have locations both inside and outside the state.
• Assess the impact: Businesses with multiple offices, both inside and outside of Georgia, should review their tax calculations to ensure compliance with the Court’s ruling, which could potentially result in a refund opportunity.
• Take the next step: Aprio’s State and Local Tax (SALT) team can analyze local taxes and assist your business in determining if it’s paying the correct amount of tax.

Schedule a free consultation today!

The Georgia Court of Appeals issued a decision concluding that the City of Atlanta (City) did not properly calculate the business occupation taxes for Block, Inc. (Block), the owner of the payment systems Square and CashApp.[1] 

The City audited Block’s Atlanta business occupation taxes for the tax years 2016 to 2018, during which Block generated over $235 million in gross receipts from Georgia customers. Block had multiple offices during the audit period, ranging from 15 to 28 offices in the U.S., including a single Georgia office throughout the relevant period. Both parties agreed that all of Block’s U.S. offices contributed to generating the Georgia gross receipts.

Georgia’s Statutes on Occupation Taxes

Georgia statutes authorize municipalities to assess and collect occupation taxes, such as the Atlanta business occupation tax in question.[2] The state statutes stipulate that the starting point for assessing occupational taxes is the gross receipts of the business for the taxable period generated from sales to customers within Georgia. Specifically, the definition of gross receipts excludes proceeds from sales of goods or services delivered to or received by customers outside of Georgia at the time of delivery or receipt.[3]

Methods for Allocating Gross Receipts

When a business has “a location or office situated in more than one jurisdiction, including businesses . . .  with one or more locations or offices in Georgia and one or more locations outside the state,” the rules provide two methods for allocating gross receipts subject to tax.[4]

• The first method applies when gross receipts can be reasonably allocated, which the parties agreed is not possible in this case. 
• The second method, that both parties agreed was applicable, provides that:

Where the business . . . cannot reasonably allocate the dollar amount of gross receipts among multiple locations or offices, the business . . . shall divide the gross receipts reported to all local governments in this state by the number of locations or offices of the business . . . which contributed to the gross receipts reported to any local government in this state, and shall allocate an equal percentage of such gross receipts of the business or practitioner to each location or office.[5]

Under this rule, the gross receipts are divided by the number of locations that contributed to the generation of those receipts. The disagreement between the parties centered around the “number of locations . . . which contributed to the gross receipts.” The City argued that since the gross receipts starting point, by law, must exclude sales to customers outside of Georgia, only Block’s Georgia office can be deemed to have contributed to its reported Georgia gross receipts. Thus, the City’s position is that the denominator for allocating Block’s Georgia gross receipts should be the sole Georgia office.

The ruling explained

The Court of Appeals disagreed, concluding that the plain reading of Georgia’s statutes does not limit the denominator based on whether the locations or offices are in Georgia. Specifically, the introductory language in the state statute specifically contemplates the division of Georgia gross receipts among contributing out-of-state offices.

As such, the Court of Appeals ruled that for computing the City’s tax, Block’s Georgia gross receipts should be divided by the number of its offices, including out-of-state offices, contributing to those Georgia gross receipts.

The bottom line

This ruling may present a refund opportunity for taxpayers who have paid Atlanta business tax based on applying the allocation method among Georgia locations only.

Aprio’s SALT team has experience working with businesses to analyze these types of local taxes and we can assist your business in determining if it’s paying the correct amount of tax. We can also pursue refund claims on your behalf if warranted. We constantly monitor these and other important state tax topics, and we will include any significant developments in future issues of the Aprio SALT Newsletter.

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[1] City of Atlanta et al. v. Block, Inc. of Delaware, Ga. Ct. App., No. A25A0120, June 17, 2025.

[2] Local municipal codes essentially mimic the authorizing state statutes.

[3] OCGA §48-13-5(2) and Atlanta Code §30-51

[4] OCGA §48-13-14 and Atlanta Code §30-80

[5] OCGA §48-13-14(a)(2) and Atlanta Code §30-80