Mississippi State Tax Com'n v. Trailways Lines, Inc., 07-CA-58995

Decision Date22 August 1990
Docket NumberNo. 07-CA-58995,07-CA-58995
Citation567 So.2d 228
PartiesMISSISSIPPI STATE TAX COMMISSION, C.A. Marx, Chairman and Commissioner of Revenue, and Nicki Martinson and William A. Wilkerson, Associate Commissioners v. TRAILWAYS LINES, INC., Midwest Bus Lines, Inc., Trailways Southern Lines, Inc., and Trailways Tennessee Lines, Inc.
CourtMississippi Supreme Court

Gary W. Stringer, Bobby R. Long, Jackson, for appellants.

Harold D. Miller, Jr., E. Marcus Wiggs, III, Butler Snow O'Mara Stevens & Cannada, Jackson, for appellees.

Before HAWKINS, P.J., and ROBERTSON and SULLIVAN, JJ.

HAWKINS, Presiding Justice, for the Court:

The Mississippi State Tax Commission appeals from a judgment of the chancery court of the First Judicial District of Hinds County requiring it to refund $1,295,104.08 in taxes and penalties. The amount of the judgment consisted of:

(1) two assessments against Trailways: one totaling $571,223.19 and the other totaling $348,900.34; and

(2) a refund claimed by Trailways totaling $374,980.55.

We find that the chancery court erred in requiring the Mississippi State Tax Commission to refund the second assessment of $348,900.34, and in holding that Trailways was entitled to the refund claim of $374,980.55. We, therefore, affirm in part, and reverse and render in part.

FACTS

On September 3, 1974, Mississippi entered the International Registration Plan. (hereinafter IRP) The IRP was adopted by the Motor Vehicle Comptroller (hereinafter MVC) under the authority of Miss.Code Ann. Sec. 27-19-143 (Supp.1974). 1

The IRP is a multi-state proportional registration agreement for vehicles. Under the IRP, vehicle registration fees are apportioned among the member states in which the vehicle travels. The fees paid to each state are based on an apportionment formula. The formula is determined by computing the percentage of miles traveled in the state as compared to the total miles traveled throughout the country. For example, if a vehicle traveled a total of 10,000 miles and 1,000 of those miles were in Mississippi, the apportionment formula would be 10%. Thus, the owner of the vehicle would be required to pay 10% of the registration fee normally due in Mississippi.

Prior to the adoption of the IRP, a vehicle traveling through Mississippi was required to pay the full registration fee unless the State had a reciprocity agreement with the vehicle's base jurisdiction. If a reciprocity agreement existed, the vehicle paid the full registration fee due in its base jurisdiction, and Mississippi received nothing.

Reciprocity agreements with respect to passenger buses liable for the gross receipts tax under Sec. 27-19-7, 2 however, were not allowed. Miss.Code Ann. Sec. 27-19-143. Thus, prior to the adoption of the IRP, Trailways had to pay the full registration fee for each of its buses traveling in Mississippi.

On May 21, 1975, the MVC requested an opinion from the Attorney General as to whether Sec. 27-19-143 allowed the State of Mississippi to enter into a proportional registration agreement with respect to passenger buses.

The first and third paragraphs of Sec. 27-19-143 specifically exclude passenger buses. The Attorney General, however, in an opinion dated June 26, 1975, stated that "the 'exception' contained in the first paragraph is not included specifically or by implication in the second paragraph." Thus, the Attorney General concluded that the second paragraph would allow Mississippi to enter into a proportional registration agreement with respect to passenger buses.

As a result, the MVC applied the IRP to passenger buses. The IRP allowed fleets of buses to apportion fees among the member states according to the proportion of total miles traveled in each jurisdiction.

Under Miss.Code Ann. Sec. 27-19-7(1) (1972), buses paid $150 each for "an annual highway privilege tax as reasonable compensation for the use of the highways of this state[.]" Also, under Miss.Code Ann. Sec. 27-19-7(2) (1972), buses paid a "highway privilege license tax ... equal to three percent of the gross revenue derived from the operations of such carrier within the state[.]" The tax levied under Sec. 27-19-7(2), however, was only paid to the extent that it exceeded that levied under Sec. 27-19-7(1).

Once IRP was adopted, the $150 fee was apportioned. Thus, the full fee was not paid by buses operating in more than one jurisdiction. On March 22, 1976, Greyhound informed the MVC that it was going to take the full $150 per bus credit under Sec. 27-19-7(2) even though it did not pay the full $150 per bus fee under Sec. 27-19-7(1). On May 6, 1976, the MVC informed Greyhound that it could take the full credit even though it did not pay the full fee.

Until July 1, 1980, the assessment and collection of these taxes was under the jurisdiction of the MVC. Beginning July 1, 1980, the MVC was abolished and these duties were transferred to the Mississippi Tax Commission [hereinafter Commission].

In 1981, the Commission audited the returns of Greyhound. It discovered that Greyhound was taking credit for the full $150 per bus fee levied under Sec. 27-19-7(1) even though it was not paying the full amount. Although the Commission agreed that the $150 fee should be apportioned, it did not agree that credit should be given for the amount not paid. Thus, the Commission assessed Greyhound for the unpaid taxes. Greyhound, however, notified the Commission that the MVC approved of its methods by providing the Commission with the MVC's letter of May 6, 1976.

The Commission rescinded the MVC's approval, but it permitted Greyhound to rely on the MVC's advice for the tax periods under investigation. Afterwards, Greyhound adhered to the methods set by the Commission.

In January of 1983, the Commission audited Trailways' records. According to the Commission, the credits taken under Sec. 27-19-7(2) were greater than those paid under Sec. 27-19-7(1). Thus, the Commission assessed Trailways for additional taxes in the amount of $519,293.81 with interest of $51,929.38 for a total of $571,223.19. The assessment related to the tax periods of January 1, 1980 through September 30, 1982.

Trailways objected to the assessment. Furthermore, Trailways argued that IRP should also apply to the computation of the gross revenue tax under Sec. 27-19-7(2). Thus, on May 26, 1983, Trailways filed a refund claim of $374,980.55 for taxes paid during the same periods covered by the Commission's assessment. The refund was computed by applying IRP to both Sec. 27-19-7(1) and Sec. 27-19-7(2).

On May 31, 1983, the Commission's Board of Review held a meeting in which the auditor's assessment was reviewed. An order was entered by the Board of Review on June 15, 1983, which affirmed the auditor's assessment and denied the requested refund.

Trailways appealed the decision to the Commission. On August 17, 1983, a hearing was held before the Commission. On September 1, 1983, the Commission affirmed the findings of the Board of Review.

While the administrative procedures were pending, the Commission conducted a second audit and assessed additional highway privilege taxes for the quarters ending January 31, April 30, July 31, and October 31, 1983. During these quarters, Trailways continued to apply IRP to both sections of Sec. 27-19-7. The assessment including penalties totaled $348,900.34. The second assessment was later revised to reflect a total tax and penalty of $338,492.83. This was paid by Trailways under protest. 3

On April 25, 1984, the Commission requested an opinion from the Attorney General to determine whether Mississippi had the authority to enter into a proportional registration agreement with respect to buses. The Attorney General came to the conclusion that Sec. 27-19-143 did not give Mississippi the authority to enter into such agreements, and overruled its previous decision of June 26, 1975.

The Attorney General's opinion held that the second paragraph of Sec. 27-19-143 did not "authorize a proportional registration agreement with other states" with respect to passenger buses. According to the opinion, the term "commercial vehicle" included in the second paragraph of the statute does not include passenger buses according to its definition. Miss.Code Ann. Sec. 27-19-3(2) (Supp.1976).

Sections 27-19-7(1) and 27-19-7(2) of Miss.Code Ann. have been amended. Currently, passenger buses are only required to pay $50 each, and there is no credit allowed against the gross revenue tax. The amendments, however, were passed after the tax periods in question.

Trailways challenged the findings of the Commission by filing suit pursuant to Sec. 27-19-337. The Chancery Court of the First Judicial District of Hinds County, Paul G. Alexander, presiding, entered a judgment in favor of Trailways in the amount of $1,295,104.08. The Commission appealed the judgment to this Court.

LAW

The first question which must be determined is whether the State of Mississippi had the authority to enter into the IRP with respect to passenger buses. The only authority of the MVC to adopt the IRP was through Sec. 27-19-143. Plain reading of the statute grants no authority whatever for the MVC to enter into proportional registration agreements with respect to passenger buses.

We are aware that administrative agencies have only such powers as are expressly granted to them or necessarily implied, and any such power exercised must be found within the four corners of the statute under which the agency operates.

Strong v. Bostick, 420 So.2d 1356, 1361 (Miss.1982).

According to the prior case law of this State, if the language of a statute is plain and unambiguous, "there is no room for construction." Clark v. State ex rel. Miss. State Med. Ass'n, 381 So.2d 1046, 1048 (Miss.1980).

It is a well recognized principle of law in this State that ambiguity must exist in the language used by the Legislature in a statute before resort will be had to any rules of statutory construction or interpretation....

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