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Final Copy 286 Ga. 597 S09G1045. TRAWICK CONSTRUCTION COMPANY, INC. v. GEORGIA DEPARTMENT OF REVENUE.

Carley, Presiding Justice.

Prior to October 1, 1999, Trawick Construction Company, Inc. was a closely-held Florida corporation. For federal income tax purposes, Trawick was treated as a Subchapter S corporation. As a result, Trawick's shareholders, instead of the corporation itself, were required to report their proportionate share of Trawick's taxable business income on their individual tax returns and pay the appropriate federal income taxes. For Georgia state income tax purposes, however, Trawick was a Subchapter C corporation which paid taxes directly to the State of Georgia on business income which was apportioned to this state. See generally Graham v. Hanna, 297 Ga. App. 542, 543 (677 SE2d 686) (2009). Thus, we note from the outset that the dissent is mistaken when it asserts, without authority, that, "[i]n Georgia, however, the shareholders must stand in the place of the corporate taxpayer, paying its tax from the proceeds passed through to them." (Dissenting opinion, p. 605)

On October 1, 1999, Trawick's shareholders sold all of their stock in Trawick and a sister company to Quanta Services, Inc. for $36,500,000. Pursuant to the stock purchase agreement and Section 338 (h) (10) of the Internal Revenue Code, 26 USC

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Georgia Law