Cases & Deals

National retailer demonstrates goods had no taxable status in Chatham County, leading county to vacate ad valorem taxes

Clients National retailer

Jones Day represented a national retailer that successfully prevented Chatham County, Georgia from assessing ad valorem tax on imported goods the retailer processed at various "flow-through" warehouse facilities located near the Port of Savannah.

The retailer receives merchandise from ships arriving out of China, breaks down the shipments at "flow through" facilities, and then reloads the goods into trucks bound for stores and warehouses throughout the United States. The county claimed that the retailer's goods were present in warehouses in the county as of January 1 of the previous four years and were, therefore, subject to tax for which the county was prepared to assert a levy. The retailer was able to demonstrate that the goods never left the stream of international commerce. The goods were therefore "foreign merchandise in transit," which acquired no taxable situs in Chatham County or anywhere else until they landed at their final destination. As a result, the county vacated the tax bills and closed the tax years.