City of Jackson v. Sly

• Decision Date: 09 March 1977
• Docket Number: No. 49223,49223
• Citation: 343 So.2d 473
• Parties: CITY OF JACKSON, Mississippi v. Mrs. Lois E. SLY et al.
• Court: Mississippi Supreme Court

Page 473

343 So.2d 473

CITY OF JACKSON, Mississippi v. Mrs. Lois E. SLY et al.

No. 49223.

Supreme Court of Mississippi.

March 9, 1977.

John E. Stone, Robert D. Findley, Jackson, for appellant.

Binder, Lucas & Lohrmann, Jerome L. Lohrmann, Thomas J. Richardson, Caldwell, Richardson & Caldwell, Taylor, Covington, Smith Matrick & Gibson, Charles E. Gibson, Jackson, for appellees.

Before INZER, SUGG and LEE, JJ.

LEE, Justice, for the Court:

The County Court of Hinds County held that Machine Concepts, Inc. (Machine) was entitled to an ad valorem tax exemption on certain lands in the City of Jackson (City) for the years 1972 and 1973, the Circuit Court of Hinds County affirmed the County Court decision, and City appeals.

Mrs. Lois E. Sly owned the property and she leased same to Mississippi Chipping Company, Inc., which, in turn, subleased it to Machine. Mrs. Odessa Lee bought the land April 3, 1973, at a tax sale for the 1972 ad valorem taxes. She also paid the 1973 taxes to protect her April 3 purchase. By stipulation, the tax sale was not permitted to mature.

The sole question is whether or not Machine had a valid tax exemption for the years 1972 and 1973 under the statutes relating to new factories and enterprises.

If Machine is correct in its contention that the exemption is valid, City will be required to refund nine thousand seven hundred seventy dollars fifty-seven cents ($9,770.57) to Mrs. Lee. If there is no exemption, Mrs. Lee will have a valid tax lien in said amount against the property.

On January 19, 1973, Machine filed an application for exemption from ad valorem taxes of City for a ten-year period beginning October 29, 1971, the date Machine commenced operations. The application related only to machinery and personal property and did not include real property.

On July 17, 1973, City passed a resolution approving the application of Machine, the application and resolution were then approved by the Agricultural & Industrial Board as provided by statute, and on September 11, 1973, City entered a final order granting the exemption for a period of ten (10) years from and after October 29, 1971, on land, buildings, equipment and inventory. On May 7, 1974, City entered an order without notice to Machine, reciting that its previous order was erroneous and amended same to limit the exemption to personal property, thereby excluding the real property.

The trial court held that the real property was exempted from 1972 and 1973 ad valorem taxes, that the tax sale was void and that Mrs. Lee should recover from City the amount she had expended for said taxes.

Does a municipality have the authority to grant a tax exemption on property which was not listed in the application?

Supervisors and municipal authorities are authorized to grant exemptions, in their discretion, to commence from the date of completion of the new enterprise for which the exemption is granted. Mississippi Code Annotated § 27-31-101 (Supp.1976) (Appendix I).

The procedure to obtain the exemption is set forth in Mississippi Code Annotated § 27-31-107 (1972) (Appendix II) and requires that an application be filed with the municipality setting out full information as to the property proposed to be exempted, the kind of articles to be manufactured, and each application to show the true value of all property sought to be exempted.

Exemption statutes are strictly construed against those claiming the exemption In Hollandale Ice Co. v. Board of Supervisors, 171 Miss. 515, 157 So. 689 (1934), an application was filed and exemption was obtained from state and county taxes. The Board of Levee Commissioners assessed the property for levee taxes because the application failed to request a levee tax exemption. The levee tax was allowed, since the exemption could be obtained only by strict compliance with the exemption law.

and they have the burden to establish their right to same. Myers v. Mississippi-Alabama State Fair, 257 So.2d 233 (Miss.1972); Snapp v. State, 250 Miss. 597, 164 So.2d 752 (1964); Mutual Credit Union v. Mississippi Employment Security Commission, 241 Miss. 432, 131 So.2d 444 (1961).

The City could not grant an exemption on real property or personal property without an application being filed. It follows that where no exemption has been sought in an application such as here, the City had no authority to grant an exemption on real property. Thus, the order granting the exemption was a nullity insofar as it pertained to real property, and no notice was required to appellee when the City amended its order deleting the exemption on real property.

The statute provides that the time of such exemptions shall commence from the date of completion of the new enterprise and the question arises as to when and from what point the exemption begins. Obviously, it was the intent of the Legislature that counties and municipalities have the authority, in their discretion, to exempt new enterprises from ad valorem taxes for a period not exceeding ten (10) years. Since the new enterprise here commenced business on October 29, 1971, a date after which the tax lien had attached and the levy probably had been made, in order to fulfill the intent of the Legislature, when should the tax exemption begin, if Machine had filed its application timely?

The tax lien attaches on real property January 1 of each year (Mississippi Code Annotated § 27-35-1 (1972)) and the taxing authority is required to make the levy at its September meeting. The taxes are payable on or before February 1 in the next succeeding year.

In Gully v. Wilmut Gas & Oil Co., 174 Miss. 794, 165 So. 620 (1936), the Court held that failure to claim an exemption did not waive the remainder of the period after the application was filed, and said:

'This contention is without merit. Section 3111, providing for the method of claiming the exemption, fixes no time for the making of the application, except by implication it must be made during the five-year...