Justia Mississippi Supreme Court Opinion Summaries

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 When Virk failed to appear at his Board of Review hearing, his appeal was involuntarily withdrawn.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

In a case of first impression, the issue this case presented to the Mississippi Supreme Court was whether money a corporation received as prepayment for future services was subject to franchise taxation during the year in which it was received. The Mississippi Department of Revenue (MDOR) assessed additional franchise tax against Fishbelt Feeds, Inc. for its failure to include a "deferred revenue" account, which represented money it had received through prepaid contracts, in its franchise tax base. Fishbelt appealed MDOR’s order to the chancery court, and the chancellor granted summary judgment to MDOR. On appeal to the Supreme Court, Fishbelt argued that the chancery court erred in granting summary judgment to MDOR and should have conducted a full evidentiary hearing on the issues presented. Fishbelt also argued that its "deferred revenue" account is excepted from franchise taxation. Finding no reversible error, the Supreme Court affirmed the award of summary judgment to MDOR. View "Fishbelt Feeds, Inc. v. Mississippi Department of Revenue" on Justia Law

The Mississippi Department of Revenue (MDOR) audited Mississippi Power Company and assessed use taxes attributed to Mississippi Power’s purchase and installation of low-NOx burners. After unsuccessfully pursuing administrative remedies, Mississippi Power appealed to the chancery court. The chancery court reversed and granted summary judgment in favor of Mississippi Power. The MDOR appealed, arguing: (1) the chancery court lacked jurisdiction over Mississippi Power’s amended petition for appeal and review; and (2) (assuming the chancery court had appellate jurisdiction over Mississippi Power’s appeal) the court erred in finding the definition of “pollution control equipment” in Mississippi Code Section 27-65-101(1)(w)) was unambiguous, and failed to afford deference to the MDOR’s interpretation of “pollution control equipment” in Mississippi Administrative Code 35.IV.7.03(302). The Supreme Court found: (1) the chancery court had jurisdiction over the appeal; and (2) the chancellor correctly concluded that Mississippi Administrative Code 35.IV.7.03(302) was an invalid regulation. The chancellor further was correct that the low-NOx burners qualified for the tax exemption under the plain language of Section 27-65-101(1)(w) and the evidence produced by Mississippi Power. Therefore, the chancellor correctly ordered that the MDOR refund Mississippi Power the use taxes assessed on the low-NOx burners, plus penalties and interest. View "Mississippi Department of Revenue v. Mississippi Power Company" on Justia Law

The Mississippi Department of Revenue assessed taxes, penalties, and interest against Isle of Capri Casino, Inc. and its affiliated entities for tax years 2004, 2005, 2006, and 2007. The Department based the assessment on the application of the license fees as a credit, claiming that only the tax liability of four Isle of Capri entities that actually held the licenses were eligible for offset, and could not benefit the affiliated group as a whole. Isle of Capri appealed the Department's assessment first to the Board of Review and then to the Board of Tax Appeals; both affirmed the assessment with minor changes. Isle of Capri appealed again, and the chancery court granted summary judgment in its favor. The Department subsequently appealed. Finding no error in the chancery court's decision, the Supreme Court affirmed. View "Mississippi Department of Revenue v. Isle of Capri Casino, Inc." on Justia Law

The issue before the Supreme Court in this case centered on local ad valorem taxes on real estate developments that use federal tax credits to construct and maintain restrictive properties that rent only to lower-income households. Specifically, the question was whether local governments could include the value of federal tax credits in their valuation of the properties for tax assessment purposes. The Court held that Mississippi Code Section 27-35-50(4)(d) prohibits them from doing so. View "Willow Bend Estates, LLC v. Humphries County Board of Supervisors " on Justia Law

A group of property owners filed suit against the Diamondhead Fire Protection District (DFPD) board of commissioners and several current and former DFPD officers, seeking declaratory judgment that a fee charged for fire-protection services was an impermissible tax. The trial court entered a judgment in favor of the DFPD. The property owners appealed, challenging: (1) whether the monthly fee is an illegal tax; and (2) whether the power to tax should be construed narrowly. Upon review, the Supreme Court found that the trial court correctly decided that the challenged fees for DFPD's services were lawful. Therefore, the Court affirmed the trial court's judgment. View "Alfonso v. Diamondhead Fire Protection District" on Justia Law

Equifax, Inc. appealed the State Tax Commission's income tax assessment. Equifax contended its Mississippi taxable income was zero; after an audit, the Commission found that the standard apportionment method prescribed by regulation did not fairly reflect Equifax's business in the state. The Commission used an alternative method and then issued assessments against Equifax. After exhausting administrative remedies, Equifax petitioned the Chancery Court for relief. The Court affirmed the Commission's decision, but the Court of Appeals reversed. Upon review, the Supreme Court concluded that the Chancery Court did not err, and that the alternative apportionment method was not a violation of the State Administrative Procedures Act. Accordingly, the Court reversed the Court of Appeals and reinstated the Chancery Court's judgment. View "Equifax, Inc. v. Mississippi Department of Revenue" on Justia Law

The issue before the Supreme Court in this case centered on whether federal law preempted state law from taxing medical equipment sold to individuals covered by the Federal Employees Health Benefits Plan or its participating insurance carriers. The Court concluded that the state tax on Mobility Medical Inc.'s gross sales was not a tax on the Plan or any other health-benefits plan. View "Mobility Medical, Inc. v. Mississippi Dept. of Revenue" on Justia Law

Appellants raised a constitutional challenge to a fee legislated on cigarettes distributed through Mississippi for sale outside the state, claiming separate violations of the Commerce and Due-Process Clauses. In 2009, the Mississippi Legislature passed a law imposing a fee on the sale, purchase, and distribution in Mississippi of cigarettes manufactured by companies that did not enter into settlement agreements with the State as a result of a 1997 lawsuit (the "nonsettling manufacturer" or "NSM" law), "including cigarettes sold, purchased or otherwise distributed in this state for sale outside of this state." In October 2009, the chancery court entered a temporary restraining order enjoining the Commissioner of Revenue from assessing and collecting the challenged fee, and later ruled that the legislative amendment did not apply retroactively, denied Appellants' motion for reconsideration, and granted the Commissioner's motion for final judgment. However, the chancery court did not enter final judgment at that time. In 2011, the chancellor entered final judgment, which incorporated an August 2010 order (denying Appellants’ request for a permanent injunction and declaratory relief) and a May 2011 order (denying motion for rehearing and granting motion for final judgment). Appellants raised several issues on appeal; the Supreme Court found that the provision of the NSM law imposing a fee on NSM cigarettes distributed through Mississippi for sale outside the state was not internally consistent in violation of the Commerce Clause. The Court declined to address Appellants' due process argument. Furthermore, the Court found that the chancery court erred in granting claims for attorney fees asserted under 42 U.S.C. 1988 for Appellants' section 1983 challenge to the constitutionality of the NSM law. The Court found that all Appellants had an adequate remedy at state law (declaratory relief under Mississippi Rule of Civil Procedure 57), and as such, the chancery court should have "refrain[ed] from considering Section 1983 claims in tax cases, mooting Section 1988 claims for fees. That being said, no basis exist[ed] for a claim by Appellants for attorney fees." View "Commonwealth Brands, Inc. v. Morgan" on Justia Law

n 1993, AT&T Corporation and affiliate corporations (collectively, AT&T) filed an affiliated group, Mississippi income tax return with the Mississippi Department of Revenue f/k/a Mississippi State Tax Commission, using the statutorily-permissible "combined method" of reporting. But from 1994 to 1996, AT&T filed its returns under the "consolidated method" of reporting, which was then statutorily available only to affiliated groups with members doing business and taxable solely in Mississippi, ostensibly to challenge the constitutionality of this distinction. Following an audit in 1997, the Commission issued an Assessment of Income Taxes of more than $5 million against AT&T. After unsuccessful administrative appeals before the Commission, AT&T filed a "Petition for Appeal of Additional Income Tax Assessment Ordered by State Tax Commission, For Declaratory and Injunctive Relief, and For Refund of Overpayment of Tax" in the Chancery Court of Hinds County. The Petition challenged the constitutionality of several tax statutes under the Commerce Clause of the United States Constitution and sought associated relief. But AT&T's Petition was not 'accompanied with a bond, to be approved by the clerk . . . , in a sum double the amount in controversy[,]" as then required by Mississippi Code Section 27-7-73. Rather, AT&T paid the Assessment, then filed the Petition. Preliminarily, the chancery court found that AT&T had "properly appealed" the full Commission's Order. The chancery court then held that the subject tax statutes violated the Commerce Clause; that the"offensive limitations" were to be struck so that AT&T was granted the "tax benefits" enjoyed by other taxpayers; and, based thereon, that AT&T was entitled to an award of $12,727,174. Thereafter, the Commission appealed those rulings, while AT&T appealed only the chancery court's interest calculations. Because AT&T did not follow the then-applicable procedure for appeal, the chancery court lacked jurisdiction to hear its appeal. The Supreme Court reversed the chancery court and reinstated the Commission's order. View "Mississippi Department of Revenue v. AT&T Corporation" on Justia Law