Crosby v. Barr
| Decision Date | 02 May 1967 |
| Docket Number | No. 44417,44417 |
| Citation | 198 So.2d 571 |
| Parties | R. H. CROSBY and Mrs. V. Ethel Crosby v. Dexter BARR, Chairman, State Tax Commission of the State of Mississippi. |
| Court | Mississippi Supreme Court |
William E. Logan, Gulfport, William C. Callender, Hall, Callender & Dantin, Columbia, for appellants.
Taylor carlisle, Binder & Bush, Jackson, for appellee.
This suit between R. H. Crosby and Mrs. V. Ethel Crosby, appellants, and Dexter Barr, Chairman of the Mississippi State Tax Commission, appellee, grew out of the interpretation of Mississippi Code Annotated section 9220-09(9) (1952) of the income tax laws of Mississippi. At the time the controversy arose, the foregoing code section was in the following language:
'Deductions allowed.-In computing the net income, there shall be allowed as deductions:
The facts pertinent to the trial of the issue joined between appellants and appellee were stipulated in the record. Briefly-it was agreed that on December 18, 1963, petitioner R. H. Crosby contributed to Ethel Crosby Foundation Fund and Lucius O. Crosby Memorial Hospital (both charitable and benevolent organizations within the purpose and meaning of the foregoing Code section 9220-09(9)), a total of 768 shares of common stock owned by him. This stock had a fair market value of $24,299.52. R. H. Crosby deducted from his state income tax report for 1963 the sum of $5,161.54. Mrs. V. Ethel Crosby deducted from her income tax return for that year the sum of $3,029.63. It was further agreed and stipulated that the Chief of the Division of Income Tax was of the opinion that the taxpayers were not entitled to deduct the amount claimed in their tax returns for contributions based upon 'fair market value' of the stock donated. He was of the opinion that the appellants, taxpayers, could not deduct more than $1,678.66 from the 1963 income tax returns, or, that is to say, the cost of the stock to the taxpayers, rather than the fair market value of the stock donated. The appellants were therefore assessed $293.07 additional tax, plus $2.93 accrued interest, based upon the interpretation of the Mississippi State Tax Commission.
The taxpayers exhausted their remedies by successive appeals to the State Tax Commission, and on each appeal, their claims were overruled. Appellants instituted proceedings in the Chancery Court of the First Judicial District of Hinds County, Mississippi, for the purpose of establishing their claim for the deductions alleged to be permitted by the income tax law. The chancery court denied their claims and they have appealed to this Court from the decree of the chancery court dismissing their petition.
It was stipulated in the trial court that the sole question to be determined in that court was whether or not the taxpayers were required to value the stock donated at its original cost, or were entitled to 'the fair market value' of the stock at the time of the donation.
The State Tax Commission bases its refusal to allow the fair market value of the stock donated upon Article 190(b) of Regulations Number 13. This article was the regulation in force at the time of the donation. It is as follows:
(Emphasis supplied.)
This regulation has been published on several occasions with the words 'fair market value' in lieu of 'the cost' of the property. We do not pursue this history of the regulation because it is not essential or material to the determination of this question. The Tax Commission contends that it was authorized to fix the value of the property donated at 'the cost of the property', by reason of that part of Mississippi Code Annotated section 9220-09(9) (1952), which is as follows:
'Such contributions or gifts shall be allowable as deductions only if verified under rules and regulations prescribed by the commissioner, with the approval of the governor.'
It was the opinion of the State Tax...
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