Articles Posted in Mississippi Supreme Court

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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

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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

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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

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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

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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

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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

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The Mississippi Department of Revenue (MDOR) issued a subpoena to Pikco Finance, Inc. (Pikco), requesting documentation pertaining to Pikco's nonpayment of finance company privilege taxes. Pikco filed a petition to quash the subpoena on the basis that MDOR's ability to audit and tax under Mississippi's Finance Company Privilege Tax law was preempted by the National Bank Act. The circuit court granted Pikco's petition to quash, and MDOR appealed. The issue on appeal was whether MDOR's use of its statutory subpoena power in administration of the Finance Company Privilege Tax was preempted by the National Bank Act. Upon review, the Supreme Court reversed and remanded, finding that Pikco was subject to the subpoena. View "Mississippi Dept. of Revenue v. Pikco Finance, Inc." on Justia Law

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A corporation settled its delinquent tax liability to the State of Mississippi by paying $100 million to the State, $4.2 million to a private charity, and $14 million to a private law firm hired by the Attorney General to pursue the claim. Mississippi's Auditor demanded that, because the $18.2 million paid to the private charity and the law firm constituted public funds, it must be turned over to the State. The charity complied; but the law firm refused, claiming the payment of its fees was not made with public funds and, in any case, the Auditor had waived the State’s claim. The Auditor filed suit and the trial court granted summary judgment to the law firm. The state Auditor appealed. Upon review, the Supreme Court found that when the Attorney General pays special assistants, Mississippi statutory law requires that they be paid from the Attorney General’s contingent fund or from other funds appropriated to the Attorney General's office by the Legislature. Furthermore, the Mississippi constitution requires obligations and liabilities to the State to be paid "into the proper treasury." Neither of these requirements was met in this case. Neither the Attorney General nor the Langston Firm provided sufficient evidence to establish that the Auditor waived the State’s claim to the funds. The Court therefore reversed the circuit court’s judgment and remanded the case for further proceedings. View "Pickering v. Langston Law Firm, P.A." on Justia Law

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A corporation settled a lawsuit by agreeing to pay the State of Mississippi $50 million, $10 million of which it disbursed directly to outside counsel retained by Attorney General Hood to pursue the litigation. The chancery court held that the payment was proper. But because the law requires that outside counsel retained by the Attorney General to pursue litigation in "the state or federal courts" be paid from his contingent fund or from other funds the Legislature appropriates to his office, and because the Mississippi Constitution requires obligations and liabilities to the State to be paid "into the proper treasury," the Supreme Court reversed, finding that the Attorney General failed to use his contingent fund. View "Pickering v. Hood" on Justia Law

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The issue before the Supreme Court in this case was an appeal by the City of Cleveland of a judgment by the DeSoto County Chancery Court which denied the City's motion for attorney fees. The chancery court found that it lacked jurisdiction to hear the City's appeal. Upon review, the Supreme Court found that, after the Court of Appeals rendered the underlying case and the Supreme Court denied certiorari review, the case was at its end. The chancery court did not thereafter have jurisdiction. Accordingly, the Supreme Court affirmed the finding that the lower court did not have jurisdiction. View "City of Cleveland, Mississippi v. Mid-South Associates, LLC" on Justia Law