Testa Distributing Co., Inc. v. Tarver

• Citation: 584 So.2d 300
• Decision Date: 27 June 1991
• Docket Number: No. CW,CW
• Parties: TESTA DISTRIBUTING COMPANY, INC., et al. v. Leon R. TARVER, II, Secretary, Department of Revenue and Taxation, State of Louisiana, et al. 90 2240.
• Court: Court of Appeal of Louisiana (US)

Page 300

584 So.2d 300

TESTA DISTRIBUTING COMPANY, INC., et al. v. Leon R. TARVER, II, Secretary, Department of Revenue and Taxation, State of Louisiana, et al.

No. CW 90 2240.

Court of Appeal of Louisiana First Circuit.

June 27, 1991.

G. Blane Clark, Jr., Baton Rouge, for Testa Distributing Co., Inc., et al.

Douglas F. Herbert, Baton Rouge, for Leon R. Tarver II, Secretary Dept. of Revenue and Taxation, State of La., et al.

Before COVINGTON, C.J., and LANIER and GONZALES, JJ.

LANIER, Judge.

This action is a suit by several beer distributors against several state agencies seeking to have a state beer excise tax declared unconstitutional and seeking a refund of taxes paid under protest. Suit was filed by Testa Distributing Company, Inc.; G & G Distributing Corporation; Natchitoches Beverage, Inc.; Coors of Northeast Louisiana, Inc.; Beverage Sales, Inc.; and Venture Marketing Corporation (hereinafter collectively referred to as the (taxpayers) against Leon R. Tarver, II, ¹ Secretary of the Department of Revenue and Taxation (Secretary); Arnold M. Lincove, Secretary of the Department of Economic Development; William J. Guste, Jr., Attorney General for the Department of Justice; Dennis Stine, ² Commissioner of the Division of Administration; and the Board of Commerce and Industry, through its chairman, J.R. Querbes, III. On October 5, 1989, the taxpayers propounded interrogatories to and filed requests for production of documents and admission of facts with the Secretary. On August 17, 1990, the taxpayers filed a motion to compel answers to their interrogatories and request for production of documents. ³ On September 14, 1990, the Secretary responded by providing the information requested or by objecting on the ground of confidentiality pursuant to La.R.S. 47:1508. A hearing on the motion to compel was held on September 28, 1990, and the trial court by orders dated September 28, 1990, and October 16, 1990, granted the motion to compel. ⁴ On October 24, 1990, the Secretary requested that the trial court reconsider its ruling. The trial court denied the motion for reconsideration on November 29, 1990. On application of the Secretary, we granted a writ of certiorari to review this ruling.

FACTS

In their petition, the taxpayers allege the following facts:

3.

Plaintiffs are all dealers handling beverages of low alcoholic content in Louisiana who, under protest, have paid state beer excise taxes levied by the State of Louisiana by authority of the provisions of La.R.S. 26:342, et seq. and which now file this action to recover the taxes paid under protest. Taxes levied by said La.R.S. 26:342 are hereafter sometimes referred to as the "Beer Tax" or the "Beer Taxes." Furthermore, Plaintiffs are entitled to a declaratory judgment finding that La.R.S. 26:342, as amended in 1974, 1979 and 1987, has since 1974 and continues to be void and in violation of the provisions and prohibitions of the United States Constitution and the Louisiana Constitution of 1974.

4.

At all times pertinent herein, the beverages of low alcoholic content handled by Plaintiffs upon which the Beer Taxes were erroneously paid, were brewed and produced outside of the State of Louisiana.

5.

Plaintiffs filed timely returns and timely remitted Beer Taxes for the taxable period constituting the month of April, 1989, and at the time of such payment, advised the Secretary of the Department of Revenue and Taxation of the Plaintiffs' intention to file suit for the recovery of such taxes, requesting that the amount remitted be placed in an escrow account to be held by the Secretary or his duly authorized representative pending the outcome of this suit.

6.

Plaintiffs intend to file timely returns for and remit to the Secretary of the Department of Revenue and Taxation Beer Taxes for the tax periods commencing May, 1989 and the months thereafter, all under similar protests, and the money so paid should be received by the Secretary of the Department of Revenue and Taxation and placed in an escrow account to be held pending the outcome of this suit, all as provided for in La.R.S. 47:1576.

7.

The amounts remitted by Plaintiffs, under protest, for the tax period of April, 1989, are set forth on Exhibit "A" attached hereto.

8.

During the periods commencing upon the effective date of Acts 1974, No. 592 and up until the commencement of this action, Plaintiffs have filed timely returns and timely, but erroneously, have remitted Beer Taxes for the taxable periods falling within the years shown on Exhibit "B" attached hereto and in the amounts set forth on said Exhibit "B".

9.

Plaintiffs have filed a petition with the Board of Tax Appeals seeking the recovery of Beer Taxes erroneously paid into the Treasury of the State of Louisiana, being those Beer Taxes referred to in paragraph 8 hereof (which other proceeding is hereinafter referred to as the "BTA Proceeding").

10.

Commencing with the effective date of Acts 1974, No. 592 and as noted below, various exemptions from the Beer Taxes were granted to Louisiana breweries handling beverages of low alcoholic content brewed and produced by them inside the State of Louisiana. Those exemptions were not made available to Plaintiffs or others like them who handled beverages brewed and produced by breweries situated outside the State of Louisiana.

11.

Between the effective date of Acts 1974, No. 592, and July 13, 1979, the provisions of La.R.S. 26:342 levying the Beer Tax provided as follows:

"There is levied and imposed on all beverages of low alcoholic content handled in Louisiana an excise tax of ten dollars per barrel containing not more than thirty-one gallons, and at a like rate for fractional parts of a barrel. However, the tax shall be five dollars per barrel upon the first thirty thousand barrels of beverages of low alcoholic content brewed and produced inside the State of Louisiana for which a tax liability is incurred in each calendar year by a brewery situated within the state."

Between July 13, 1979 and the effective date of Acts 1987, No. 696, Section 1, the provisions of La.R.S. 26:342 provided as follows:

"A. Except as otherwise provided herein, there is levied and imposed on all beverages of low alcoholic content handled in Louisiana an excise tax of ten dollars per barrel containing not more than thirty-one gallons, and at a like rate for fractional parts of a barrel.

B. The tax levied and imposed by this Section and incurred in each calendar year on beverages of low alcoholic content brewed and produced by a brewery within the state of Louisiana shall be levied at the following rates:

(1) In 1979, any tax hereunder shall be due and owing:

(a) On the first 60,000 barrels after the effective date of this Act--no tax.

(b) On all barrels in excess of 60,000 barrels after the effective date of this Act--ten dollars per barrel.

(2) In 1980, any tax hereunder shall be due and owing:

(a) On the first 45,000 barrels--no tax.

(b) On all barrels in excess of 45,000 barrels--ten dollars per barrel.

(3) In 1981, any tax hereunder shall be due and owing:

(a) On the first 35,000 barrels--no tax.

(b) On all barrels in excess of 35,000 barrels--ten dollars per barrel.

(4) In 1982, any tax hereunder shall be due and owing:

(a) On the first 30,000 barrels--five dollars per barrel.

(b) On all barrels in excess of 30,000 barrels--ten dollars per barrel.

C. The provisions of Subsection B shall apply only to a brewery which is actively and directly owned, managed, and operated by an authorized legal entity which has owned, managed, and operated a brewery in this state for at least twelve consecutive months."

Since the effective date of Acts 1987, No. 696, Section 1, the provisions of La.R.S. 26:342 provided as follows:

"There is levied and imposed on all beverages of low alcoholic content handled in Louisiana an excise tax of ten dollars per barrel containing not more than thirty-one gallons, and a like rate for fractional parts of a barrel."

12.

For a portion of 1982 and years subsequent to 1982, the legislative scheme exempting Louisiana breweries and beverages from the payment of Beer Taxes was continued in effect by the State of Louisiana through the adoption and implementation of the provisions of La.R.S. 47:4301, et seq. providing authority to the Louisiana Board of Commerce and Industry to grant certain exemptions to existing manufacturing establishments in Louisiana.

13.

Acting pursuant to the authority established under the provisions of La.R.S. 47:4301, et seq., the Board of Commerce and Industry did, by instrument signed December 9, 1982 (the "Dixie Contract"), grant to Dixie Brewing Company or Dixie Brewing Company, Inc. (collectively, "Dixie Brewing Company"), a Louisiana brewery, an industrial tax exemption for Beer Taxes owed by Dixie Brewing Company to the State of Louisiana in an amount not to exceed $3,300,000 over a 51 month time period beginning October 1, 1982, and ending December 31, 1986. The said exemption applied to all Beer Tax due to be paid by Dixie Brewing Company under La.R.S. 26:342 for beer manufactured at its brewery located at 2537 Tulane Avenue, New Orleans, Louisiana, and sold in the State of Louisiana, for the months of October, November and December in 1982 and on the first 75,000 barrels of beer for the calendar years of 1983, 1984, 1985 and 1986.

14.

Upon information and belief, Plaintiffs aver that Dixie Brewing Company did, in fact, take advantage of the exemptions thus granted to it by statute from 1974 through 1982, and by the Board of Commerce and Industry in the Dixie Contract from 1982 until 1986, and did not pay the Beer Tax levied under La.R.S. 26:342 for beer manufactured at its brewery located at 2537 Tulane Avenue, New Orleans, Louisiana, and sold in the State of Louisiana in the amounts exempt by statute and the Dixie Contract.

15.

The Board of Commerce and Industry, with the consent of then Governor Edwin W. Edwards, took action to revoke...