Articles Posted in Tax Law

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After the Mississippi Supreme Court held in "Jones County School District v. Mississippi Department of Revenue," (111 So. 3d 588 (Miss. 2013)), that a school district was not liable for oil and gas severance taxes on royalties derived from oil and gas production on sixteenth-section land, the Chancery Court of Wayne County held that Wayne County School District (WCSD) was owed interest by the Mississippi Department of Revenue (MDOR) on its overpayment of severance taxes at the rate of one percent (1%) per month. The chancellor determined, based on Section 27-65-53 of the Mississippi Code, that the payment should have started on June 5, 2013, ninety days after the Jones County decision. Finding that the chancellor correctly applied the statute, the Supreme Court affirmed the judgment of the chancery court. View "Wayne County School District v. Morgan" on Justia Law

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Before January 1, 2015,Mississippi Code Section 27-77-7 required taxpayers wishing to appeal tax assessments affirmed by the Board of Tax Appeals to post surety bonds for half the assessed taxes or pay the taxes under protest. But the Legislature amended the statute to remove that bonding requirement for appeals from assessments imposed after the amendment’s effective date of January 1, 2015. Marlena Robinson failed to post a bond or pay her taxes when she appealed a February 4, 2014, tax assessment, so the chancellor dismissed her appeal. Finding no reversible error in the chancellor’s dismissal, the Supreme Court affirmed. View "Robinson v. Morgan" on Justia Law

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In 2003, the Mississippi State Tax Commission (now the Department of Revenue) assessed additional income tax, penalties, and interest in an amount greater than $11.75 million against AT&T based on its income from dividends from non-Mississippi subsidiaries. After exhausting its administrative remedies, AT&T appealed to the Chancery Court of the First Judicial District of Hinds County, arguing that a portion of Section 27-7-15(4)(i) discriminated against interstate commerce in violation of the negative, or dormant, aspect of the Commerce Clause of the United States Constitution. AT&T argued that the scheme allowed an income tax exemption for dividends received from AT&T’s Mississippi subsidiaries while denying an exemption to similarly situated non-Mississippi subsidiaries. Ultimately, the chancellor agreed and declared a portion of Section 27-7-15(4)(i) as unconstitutional. Having determined that the geographical limitation in Section 27-7-15(4)(i) offended the negative aspect of the Commerce Clause of the United States Constitution, the Mississippi Supreme Court held that portion of it to be unconstitutional and invalid. The phrase “under the provisions of this article” was struck from Section 27-7-15(4)(i) and the severance was be applied to AT&T for the tax years at issue in this case. The judgment of the Chancery Court was affirmed. View "Miss. Dept. of Revenue v. AT&T Corporation" on Justia Law

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The Pascagoula-Gautier School District and the City of Pascagoula took issue with the Jackson County Board of Supervisors’ approval of the Tax Assessor’s methodology in assessing taxes on Chevron’s leasehold interest in property it leased from Jackson County. After several years of litigation, and after the trial court had denied two motions to dismiss for lack of standing, the trial court sua sponte reversed course and granted the second motion to dismiss for lack of standing, reasoning that the School District and City lacked standing because Mississippi Code Section 11-51-77 did not specifically grant them standing. Because the School District and the City did not need to show a specific statute authorizing standing, and because they otherwise demonstrated standing, the Supreme Court reversed the trial court judgment on this issue. View "Pascagoula-Gautier Sch. Dist. v. Bd. of Supervisors of Jackson County" on Justia Law

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The property of Riverboat Corporation, an ad valorem taxpayer, was subject to assessment by the Harrison County Board of Supervisors (“the Board”) because Riverboat owned certain personal and real property in Harrison County. The Mississippi Supreme Court was asked "to abandon the common law of this state, pronouncements of this Court, and customs and practices of trial courts across this state, all dating back to the nineteenth century, under the guise that today’s issue has not yet been squarely before" it and to "overrule a learned trial judge who, [. . .] determined a jury trial should be had in an appeal of a county’s ad valorem tax assessment." When Riverboat appealed its tax assessment, the Board requested a jury trial. Riverboat then moved for a bench trial, averring that there was no right to a jury trial in tax appeals. The trial court denied Riverboat's motion. The Supreme Court declined to rule against Mississippi precedent, and affirmed the trial court's denial of Riverboat's motion. View "Riverboat Corporation of Mississippi v. Harrison County Board of Supervisors" on Justia Law

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The Mississippi Department of Revenue (MDOR) audited Hotel and Restaurant Supply (Hotel) and concluded that Hotel owed hundreds of thousands of dollars in underpaid sales tax. Hotel appealed the assessment to MDOR’s Board of Review, which upheld the assessment but reduced the amount owed. Hotel appealed to the Mississippi Board of Tax Appeals (MBTA), and MBTA abated the assessment in full. MDOR appealed MBTA’s decision; both parties filed motions for summary judgment, and the chancery court granted Hotel’s motion. MDOR appealed the chancery court’s decision to grant Hotel’s motion for summary judgment. The Supreme Court found no reversible error and affirmed the chancery court’s grant of Hotel’s motion for summary judgment. View "Mississippi Department of Revenue v. Hotel & Restaurant Supply" on Justia Law

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Vincent Castigliola, a Mississippi resident, bought a yacht in Florida from Mark Fallon, an Ohio resident. Fallon, who is not in the business of buying or selling boats, sold the boat to Castigliola, who also is not in the boat trade. This transaction involved marketing services from Galati Yacht Sales, a yacht broker, which Fallon hired. Castigliola did not pay sales tax on the boat in Florida or use tax in Mississippi. Aggrieved, MDOR audited Castigliola and subsequently assessed use tax and penalties regarding the boat purchase, totaling $7,588. Castigliola challenged the tax, exhausted his administrative remedies without relief, and ultimately appealed to the Chancery Court. Before the chancery court, Castigliola filed a motion for summary judgment, arguing that the sale was a casual sale and therefore not subject to Mississippi use tax. The Court denied his motion, and Castigliola appealed. This case presented two issues: (1) who has the burden to prove use tax is applicable to a transaction; and (2) does the use of a broker make a casual sale taxable? The Supreme Court held that: (1) the Department of Revenue (MDOR) had the burden to prove that a tax applied, and the taxpayer had the burden to prove an exemption from tax applied; and (2) casual sales are excluded from sales and use tax in Mississippi. In this case, because MDOR’s argument for taxation was not supported by its own regulations and relied on an improper and erroneous application of Florida law, the Supreme Court found MDOR’s position was arbitrary and capricious. Furthermore, MDOR admitted the sale was from one individual to another, not in the ordinary course of business. Accordingly, the Court reversed summary judgment and render judgment in favor of Castigliola. View "Castigliola v. Mississippi Dept. of Rev." on Justia Law

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This appeal arose out of the tax sale of a piece of property located in the City of Horn Lake in DeSoto County. Until August 2003, Millennium of Mississippi, LLC, owned the property in question. On August 4, 2003, Millennium conveyed the property to DeSoto County Development, LLC, by warranty deed. At that time, DeSoto Development granted Marshall Investments Corporation, and Fred Spencer, as trustee, a deed of trust lien and mortgage on the property. Marshall Investments then appointed Franklin Childress Jr., Spencer Clift III, and K. David Waddell as substitute trustees for the deed of trust. Subsequently, DeSoto Development defaulted on its mortgage, and Marshall Investments foreclosed on the property. Marshall Investments purchased the property at the foreclosure sale and, in December 2007, executed a substitute trustee's deed to MIC-Rocky, LLC. DeSoto County and the City of Horn Lake levied $520,508 in ad valorem taxes on the property for the tax year ending December 31, 2007. These taxes were never paid and became delinquent on February 1, 2008. The property was offered for sale at public auction by the DeSoto County tax collector on August 25, 2008, to collect the delinquent taxes. SASS Muni-V, LLC was the successful bidder at the auction. No purported property owner or lienholder attempted to redeem the property within the two-year statutory redemption period. Approximately a year after the expiration of the redemption period, SASS filed a complaint in DeSoto County Chancery Court, asking the court to declare the tax sale void and to order a refund of the purchase price. SASS Muni-V appealed the Chancery Court's order dismissing its complaint seeking to void its 2008 tax-sale purchase of real property. Because the trial court erred in finding that SASS Muni-V lacked standing to pursue its claims, the Supreme Court reversed the dismissal of SASS's complaint and remanded this case for further proceedings. View "Sass Muni-V, LLC v. DeSoto County" on Justia Law

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In June 2011 the Department of Revenue assessed additional individual, sales, and corporate taxes against taxpayers Southside, Inc. d/b/a Wines, Etc. and Barry and Sarabeth Artz. They appealed a Board of Tax ruling without satisfying the statutory requirements of paying the disputed taxes under protest before appealing or posting a surety bond with their appeal. Because the chancery court lacked appellate jurisdiction to hear the appeal, the chancellor granted the Department of Revenue’s motion to dismiss. Finding no reversible error, the Supreme Court affirmed. View "Southside, Inc. d/b/a Wines, Etc. v. Mississippi Department of Revenue" on Justia Law

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Karmjit Virk appealed an increase in his tax liability to the Mississippi Department of Revenue’s Board of Review. When Virk failed to appear at his Board of Review hearing, his appeal was involuntarily withdrawn. Virk’s appealed to the Board of Tax Appeals and the Chancery Court; both were dismissed. Finding no error, the Supreme Court affirmed the decisions of the Board of Review, the Board of Tax Appeals, and the Chancery Court.View "Virk v. Mississippi Department of Revenue" on Justia Law

Posted in: Government Law, Tax Law