Marx v. Broom
| Decision Date | 24 February 1994 |
| Docket Number | Nos. 91-CC-00476,91-CC-00475 and 91-CC-00422,91-CC-00474,s. 91-CC-00476 |
| Citation | 632 So.2d 1315 |
| Parties | , 18 Employee Benefits Cas. 1054 Charles A. MARX, Ph.D., Chairman, Mississippi State Tax Commission and Commissioner of Revenue, and the State of Mississippi v. Gordon BROOM and Moncile Broom; George H. Homich; Thomas G. Abernethy and Estate of Alice L. Abernethy and Thomas G. Abernethy, Executor; David Randal Burns, Executor of the Estate of Erit L. Burns; Hosea M. Ray and Merle B. Ray. C.A. MARX, Ph.D., Chairman, Mississippi State Tax Commission and Commissioner of Revenue, State of Mississippi and the State of Mississippi v. John E. and Iris MONTGOMERY, James A. and Virginia Ables, and James N. and Sue H. Airhart, John D. and Frankine B. Albritton, Charles A. and Beverly L. Angel, William L. and Ruby Appleby, Samuel E. and Darline J. Baker, Charles H. and Gloria C. Bassett, Harry E. and Charlotte S. Bennett, Jr., Warren K. and Mary F. Berner, Carl and Ellen H. Berry, Clair F. and Gladys C. Berry, Clarence B. and Alma E. Blocker, Henry W. and Rosamond N. Boardman, Galen D. Bonebreak, Emmett B. and Martha L. Bonewitz, Robert N. and Mabelle S. Bowers, Margaret E. Brand, Edward M. and Gladys S. Brennan, George L. and Nancy B. Brewer, Stanley M. and Ruth A. Brewer, James H. and Deirdre N. Bridewell, Francis O. and Alma T. Brown, Jerrold C. and Julia A. Brown, Robert C. and Shirley A. Brown, Robert W. and Vera E. Brown, William E. and Olive N. Bryan, Jr., Cornelius E. and Lucille E. Buckley, Ralph T. and Vera E. Bunten, Jr., Frank W. and Myrtle S. Burgess, Jr., Claude L. and Nikki L. Byrd, et al. C.A. MARX, Ph.D., Chairman, Mississippi State Tax Commission and the State of Mississippi v. Arthur WINSTEAD, Thomas B. Abernathy, Arthur F. Adams, Roderick Adams, Jackson H. Ables, Jr., Charles C. Ainsworth and 494 other Appellees. MISSISSIPPI STATE TAX COMMISSION v. John Thomas TODD and Philips T. Cooley. |
| Court | Mississippi Supreme Court |
Michael Stribling, Bobby R. Long, MS State Tax Com'n, Jackson, for appellant.
Samuel L. Begley, John L. Maxey, II, Maxey Pigott Wann & Begley, Jackson, John Sharbrough, Ezell & Sharbrough, Mobile, AL, Mark Ezell, Ezell & Sharbrough, Butler, AL, J. Doyle Fuller, Montgomery, AL, for appellees John Todd and Philips Cooley.
James B. Persons, Hopkins Dodson Wyatt & Crawley, Gulfport, for appellees John and Iris Montgomery et al.
J. Brad Pigott, Maxey Pigott Wann & Begley, Jackson, Michael Kator, Washington, DC, for appellees Arthur Winstead et al.
Harris H. Barnes, III, Dossett Goode Barnes & Broom, Jackson, for appellees Gordon Broom et al.
Before PRATHER, P.J., and PITTMAN and SMITH, JJ.
SMITH, Justice, for the Court:
The Mississippi State Tax Commission appeals from the decision of the Chancery Court of Hinds County, which found that state residents who were also federal retirees were entitled to a refund of state income taxes paid under the state's unconstitutional tax scheme which taxed federal retirees while exempting the state's own retired employees.
These cases, consolidated for consideration, have their origins in Davis v. Michigan Dept. of Treasury, 489 U.S. 803, 109 S.Ct. 1500, 103 L.Ed.2d 891 (1989), in which Appellees in this case are all federal retirees who sought refund of state income taxes paid under the unconstitutional tax scheme as found in Davis. After being denied relief by the Tax Commission, appellees sought declaratory relief from the Hinds County Chancery Court. Based on Davis, the court found that the Mississippi tax scheme was unconstitutional and that the Davis decision was to be applied retroactively. That court further found that state law provides for refunds pursuant to Miss.Code Ann. Sec. 27-7-313 (Supp.1989) to the parties for the years 1985 to 1989.
the U.S. Supreme Court declared unconstitutional Michigan's taxation scheme, one similar to Mississippi's and numerous other states. The discriminatory treatment of taxpayers based on the source of compensation or pay was found to violate 4 U.S.C. Sec. 111 when the source of the pay or compensation is the federal government.
After Davis and the filing of the appellees' actions for declaratory relief in 1989, the state legislature during the 1990 session amended the statute in an attempt to exclude the appellees and others similarly situated from the refund provisions of the statute. The chancery court found the 1990 amendment to be unconstitutional.
Some of the issues initially raised by the Tax Commission in bringing this appeal have since been resolved by U.S. Supreme Court. The question of whether the decision in Davis was to be applied prospectively or retroactively was decided in Harper v. Virginia Department of Taxation, 509 U.S. ----, 113 S.Ct. 2510, 125 L.Ed.2d 74 (1993), which held that Davis was to be applied retroactively. In Barker v. Kansas, 503 U.S. ----, 112 S.Ct. 1619, 118 L.Ed.2d 243 (1992), the Supreme Court held that the principles of Davis also apply to federal military retirement benefits. There is no need to further discuss these questions.
The remaining issues concern the question of what relief, if any, the appellees are entitled to under the refund statute, Sec. 27-7-313, and the consequences of the amendment of that statute.
The Todd group of appellees have cross appealed on the denial of their motion for certification of a class action.
DISCUSSION
1.
DID THE COURT ERR IN HOLDING RETIREES WERE ENTITLED TO REFUNDS?
Miss.Code Ann. Sec. 27-7-313 (Supp.1993) (Refund to taxpayer) provides as follows:
In the case of any overpayment of any tax, interest or penalty levied or provided for in article 1 of this chapter, or in this article, whether by reason of excessive withholding, error on the part of the taxpayer, erroneous assessment of tax, or otherwise, the excess shall be refunded to the taxpayer.
When, upon examination of any return made under this article, or under the provisions of article 1 of this chapter, it appears that an amount of income tax has been paid in excess of the amount properly due, then the amount of the excess shall be credited against any income tax then due from the taxpayer under any other return required by this article, or article 1 of this chapter, and any balance of such excess shall be certified to the state auditor of public accounts by the commissioner. The said auditor is hereby authorized to make such investigation and audit of the claim as he finds necessary. If he finds that the commissioner is correct in his determination, the auditor may issue his warrant to the state treasurer in favor of the taxpayer for the amount of tax erroneously paid into the state treasury.
The state treasurer shall withhold from all income taxes collected under the withholding and declaration of estimated tax provisions of this article, eighteen percent thereof, which shall be placed in a special fund, separate and apart from the general fund of the state, and used for the purpose of making refund under the income tax laws of this state. All refunds made under this article shall be made as quickly as possible upon receipt of the proper proof, as required by the state auditor. On or In order to obtain a refund, such employee shall attach to his return a copy of the withholding statement required to be furnished him by his employer as provided in section 27-7-311. The making of any refund shall not be conclusive of the tax due by any individual, but shall be made subject to the future audit of is return and the determination of his liability.
before June 30, 1970, and on June 30 of each year thereafter, the commissioner shall evaluate the claims of refunds pending and, by entry on the minutes of the commission, designate any portion of said special fund that can be reasonably expected to be in excess of the amount necessary to make refunds on pending claims. The commissioner shall forward a certified copy of said minutes to the state treasurer and the state treasurer shall then transfer the said sum so designated into the general fund of the state.
The lower court found that "[w]hen plaintiffs filed their action in this Court as aforestated, Mississippi via legislative enactment does [sic] provide for a refund." It is the contention of the Commission that under Miss.Code Ann. Sec. 27-7-313 refunds are not to be given for a constitutional challenge but only for other errors or excessive withholding.
The statute clearly says that refunds shall be given in the case of "any overpayment of any tax ... whether by reason of excessive withholding, error on the part of the taxpayer, erroneous assessment of tax, or otherwise, the excess shall be refunded to the taxpayer." (emphasis added). The plain words of the statute say that any overpayment of Mississippi taxes for any reason shall be refunded to the taxpayer.
Other courts have construed similar language to include unconstitutional taxes. Liberty Glass Co. v. United States, 332 U.S. 524, 68 S.Ct. 229, 92 L.Ed. 142 (1947) (); Chesapeake & Potomac Tel. Co. v. City of Newport News, 194 Va. 409, 73 S.E.2d 394 (1952) (); Community F.S.L. Ass'n v. Director of Revenue, 752 S.W.2d 794, 798 (Mo. banc 1988) ( "overpayment" for purposes of the Missouri Code to include "illegally collected taxes."); Hackman v. Missouri Director of Revenue, 771 S.W.2d 77, 81 (Mo.1989) ().
When the language used by the legislature is plain and unambiguous, such as the language here, and where the statute conveys a clear and definite meaning, as here, the Court will have no occasion to resort to the rules of statutory interpretation. State v. Heard, 246 Miss. 774, 151 So.2d 417 (1963). The courts cannot restrict or enlarge the meaning of an...
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