Comdata Network, Inc. v. State, Dept. of Revenue
| Decision Date | 15 March 1993 |
| Citation | 852 S.W.2d 223 |
| Parties | COMDATA NETWORK, INC., Plaintiff-Appellant, v. STATE of Tennessee DEPARTMENT OF REVENUE and the Commissioner of Revenue, Joe Huddleston, Defendants-Appellees. |
| Court | Tennessee Supreme Court |
Douglas J. Brown, Paul S. Davidson, Stokes & Bartholomew, Nashville, for plaintiff-appellant.
Charles W. Burson, Atty. Gen. and Reporter, William E. Young, Asst. Atty. Gen., Nashville, for defendants-appellees.
This case presents an appeal by Comdata Network, Inc. from the judgment of the trial court granting the Commissioner of Revenue's motion to dismiss. The record supports the Chancellor's finding that the Commissioner's refusal to allow the taxpayer a "credit carryover" for the tax years 1982 through 1984 cannot be asserted pursuant to T.C.A. §§ 67-1-1801 to 67-1-1807 (1989).
The review of this question of law is de novo, with no presumption of correctness for the chancery court's conclusions of law. See, e.g., Estate of Adkins v. White Consol. Indus., Inc., 788 S.W.2d 815, 817 (Tenn.App.1989).
The essential facts are not disputed. For the tax years 1982 through 1984, Comdata filed tax returns and paid, without protest, the franchise and excise taxes shown to be due. In 1986, Comdata filed amended returns for those tax years, which stated a total overpayment of taxes in the amount of $851,868. The claimed overpayment resulted from a revision by the taxpayer of the formula for allocating taxes between Tennessee and other states in which Comdata did business. In the amended returns, the taxpayer requested that the calculated overpayment be carried forward as a credit against its tax liability subsequent to 1984.
In November, 1989, the Department notified the taxpayer that its tax returns for 1985 through 1989 had been selected for audit. In December, 1990, after the audit had been completed, the Department made an assessment of taxes due for 1985 and 1986, which subsequently was increased to $1,270,890. The assessment resulted from the disallowance by the Department of the allocation formula which produced the claimed overpayment.
The suit, which was filed by Comdata in March, 1991, three days after the Department's assessment was increased, seeks only credit for the claimed overpayment. It does not contest the audit or the assessment for 1985 and 1986 based on the audit. The taxpayer asserts that the claimed overpayment for 1982 through 1984 should be applied to its tax liability for 1985 and 1986, leaving a balance due by the taxpayer of $27,757, which amount it paid upon filing suit.
The Chancellor dismissed the suit on the ground that the court did not have "subject matter jurisdiction." The court found that the taxpayer's claim is controlled by T.C.A. §§ 67-1-901, 67-1-903 pursuant to which any claim for relief for taxes paid prior to January 1, 1986, must have been paid under protest and suit filed within six months of the payment. The court held that the claim was for taxes paid prior to January 1, 1986, and that that claim had been forfeited by failure to comply with the procedure required by statute.
The taxpayer contends that its "credit carryover claim was approved" and "the subsequent attempt by the Department of Revenue to revoke approval" constituted "payment" within the meaning of T.C.A. § 67-1-1807. The determinative issue then is whether the claim is for "taxes paid prior to January 1, 1986," or for taxes paid "on or after" that date. The pertinent provisions of that statute are:
Applicable laws--Conditions precedent for recovery--Conflicting laws.--(a) All taxes paid prior to January 1, 1986, shall be governed by the laws regarding refunds and suits for the recovery of taxes as those laws existed in 1985;
. . . . .
(b) all taxes paid on or after January 1, 1986, shall be governed by the laws regarding refunds and suits for the recovery of taxes as set out in this part,
. . . . .
(d)(1) Provided that it shall not be a condition precedent for suit for recovery of taxes paid on or after January 1, 1986, that the same be paid under protest, involuntarily, or under duress.
(2) No suit for the recovery of any tax paid prior to January 1, 1986, shall be allowed unless such tax was paid under protest.
In General Motors Corp. v. Taylor, 811 S.W.2d 897 (Tenn.1991), the Court construed the controlling provisions of the statutes, T.C.A. §§ 67-1-901, 67-1-1807,...
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