Triangle Marine, Inc. v. Savoie
| Decision Date | 15 October 1996 |
| Citation | 681 So.2d 937 |
| Parties | 95-2873 La |
| Court | Louisiana Supreme Court |
Stewart Foster Peck, Mary Anne Sprague Langston, Lugenbuhl, Burke, Wheaton, Peck, Rankin & Hubbard, New Orleans, for applicant in No. 95-C-2873.
William Martin Hudson, III, Patrick Bayard McIntire, Oats & Hudson, Lafayette, Henry Alan McCall, Stockwell, Sievert, Viccellio, Clements & Shaddock, Lake Charles, William M. Backstrom, Jr., Jones, Walker, Waechter, Poitevent, Carrere & Denegre, New Orleans, Christopher J. Dicharry, Lemle & Kelleher, Baton Rouge, for respondent in No. 95-C-2873.
Paul G. Borron, III, Plaquemine, for amicus curiae American Sugar Cane League.
Marion French, Alexandria, for amicus curiae Louisiana Forestry Association.
Thomas A. Rayer, for amicus curiae Louisiana Catholic Conference.
Henry Alan McCall, William E. Shaddock, Stockwell, Sievert, Viccellio, Clements & Shaddock, Lake Charles, for applicant in No. 95-C-2904.
William Martin Hudson, III, Patrick Bayard McIntire, Oats & Hudson, Lafayette, for respondents in Nos. 95-C-2904, 95-C-2885.
William M. Backstrom, Jr., Edward Dirk Wegmann, Louis S. Nunes, III, Jones, Walker, Waechter, Poitevent, Carrere & Denegre, New Orleans, for applicant in No. 95-C-2899.
William M. Hudson, III, Patrick Bayard McIntire, Oats & Hudson, Lafayette, Stewart Foster Peck, Mary Anne Sprague, Langston, Lugenbuhl, Burke, Wheaton, Peck, Rankin & Hubbard, New Orleans, Henry Alan McCall, Stockwell, Sievert, Viccellio, Clements & Shaddock, Lake Charles, for respondent in No. 95-C-2899.
Christopher J. Dicharry, Willard Lee West, Lemle & Kelleher, Baton Rouge, for applicant in No. 95-C-2885.
Vyrona Marie Wiltz, Krotz Springs, for amicus curiae Louisiana Tax Com'n.
[95-2873 La. 2] KIMBALL, Justice. *
We granted certiorari to resolve the issue of whether an action for refund of ad valorem taxes paid under protest based upon a constitutional exemption is an assessment correctness challenge or a tax legality challenge. 1 In these consolidated cases, plaintiff-vessel owners allege ad valorem taxes were imposed illegally on their vessels because the property enjoys a constitutional exemption from taxation. The district court granted summary judgment dismissing all the suits as premature. The court held the vessel owners first were required to exhaust administrative remedies mandated by La. Const. art. 7, § 18(E) before seeking review in district court because plaintiffs' challenge questioned not the legality of the tax but rather the correctness of the assessment. The court of appeal affirmed, agreeing that the vessel owners' challenge is addressed to the tax assessment's correctness. 2 We reverse.
Triangle Marine, Inc. was assessed 1987 Cameron Parish ad valorem taxes on vessels which service or supply companies engaged in the exploration or production of oil and gas in [95-2873 La. 3] the Gulf of Mexico. The vessel owner paid the ad valorem tax under protest and filed suit under LSA-R.S. 47:2110 against the Cameron Parish sheriff and ex-officio tax collector. The taxpayer claimed a refund of taxes paid on the basis that the assessed vessels were engaged in international trade and were thus exempt from ad valorem taxation under La. Const. art. 7, § 21(C)(16). Twenty-one other virtually identical cases were consolidated with this one; vessel owners contested ad valorem taxes assessed against vessels similarly engaged in various tax years.
In addition to the constitutional exemption, the plaintiff-vessel owners alternatively pleaded the vessels did not have the proper tax situs in Cameron Parish for ad valorem tax assessment, that the taxes were not properly apportioned for the time the vessels actually spent in Cameron Parish, that each vessel could only be subject to personal property taxes at the domicile of the vessel owner (which in some instances is not Cameron Parish), that Louisiana tax laws do not apply to the Outer Continental Shelf, and that the taxes violated the Commerce Clause, Due Process Clause, and Equal Protection Clause of the U.S. Constitution.
The Cameron Parish sheriff answered and denied the allegations. The sheriff sought summary judgment in each suit arguing the vessel owners had not sought review of the assessments by the parish governing authority and by the Louisiana Tax Commission which are necessary to a challenge of the correctness of the assessment under La. Const. art. 7, § 18(E). Attached to the Motion for Summary Judgment were affidavits from the administrator of the Cameron Parish Police Jury and the Chairman of the Louisiana Tax Commission asserting that no administrative review was undertaken prior to filing suit in district court. The vessel owners countered that they were correct in bringing the matter before the court because they are challenging the legality of the tax, not the correctness of the assessment, and thus LSA-R.S. 47:2110 gives them the right to bring suit in district court.
Louisiana constitutional and statutory law formulates a two-track procedure a property owner must adhere to in challenging property tax assessments. One regime encompasses challenges to the "correctness of assessments" by the assessor and the other covers challenges to the legality of the tax levied. The assessment correctness challenge, mandated by La. Const. art. 7, § 18(E), instructs that
[95-2873 La. 4] [t]he correctness of assessments by the assessor shall be subject to review first by the parish governing authority, then by the Louisiana Tax Commission or its successor, and finally by the courts, all in accordance with procedures established by law. 3
On the other hand, the Constitution requires the legislature to provide "a complete and adequate remedy for the prompt recovery of an illegal tax paid by a taxpayer." La. Const. art. 7, § 3. The Louisiana Legislature enacted LSA-R.S. 47:2110 which provides a right to challenge "the legality of any tax accrued or accruing or the method of enforcement thereof." LSA-R.S. 47:2110(B). 4 Thus, the law provides an assessment correctness challenge must be reviewed by the parish's board of review and the Louisiana Tax Commission before judicial review. A tax legality challenge, however, may be filed directly in the district court.
This court for some time has recognized a line of distinction between correctness and legality challenges. In Morgan's Louisiana & Texas R.R. & Steamship Co. v. Pecot, 50 La. Ann. 737, 23 So. 948, 950-51 (1898), we reasoned that correctness challenges are directed at issues of regularity or correctness of the assessment, such as over-valuation and misdescription, while legality challenges are directed at issues involving claims that the assessment is void for radical defects or that the assessment is inherently invalid.
This distinction was reaffirmed and explained in Soniat v. Board of State Affairs, 146 La. 450, 83 So. 760, 762 (1919). In Soniat, this court observed that where there is an assessment of property alleged to be exempt by law from taxation, such assessment is "not an assessment within the contemplation of the law ... and can never become[ ] the basis for the levy of a valid tax...." Moreover, we reasoned in the instance there is an assessment of property "subject to taxation," id., the assessment is not open to a legality challenge as having no legal existence; [95-2873 La. 5] rather, "it is open to correction, by an increase or reduction in the valuation." Id. (emphasis added). In that case, the assessment must be shown to exceed or fall short of some defined "limitation of valuation" which the law so provides. Id.
Although the procedures for asserting correctness and legality challenges may have changed over the years--the most prominent change being constitutionally mandated administrative review of correctness challenges-- 5these principles remain viable in distinguishing the dichotomy at issue. Indeed, these cases, and the legislature's usage, 6 illustrate that "correctness of assessment" is a term of art, referring to the right of the taxpayer to seek adjustments to the valuation of taxable property. The term envisions a process which includes, as the court of appeal observed, "the uniformity and equality of taxation required by law." See Westminster Management Corp. v. Mitchell, 525 So.2d 1171, 1173 (La.App. 4th Cir.) (" 'Correctness' includes both the standard of true value and the uniformity and equality required by law."), writ denied, 532 So.2d 132 (La.1988), cert. denied, 489 U.S. 1018, 109 S.Ct. 1137, 103 L.Ed.2d 197 (1989); Capital Drilling Co. v. Graves, 496 So.2d 487, 492 n. 2 (La.App. 1st Cir.1986) ().
In this case, however, the vessel owners argue the imposition of ad valorem taxes on their vessels, and Cameron Parish's attempt at collection, is illegal because their vessels enjoy a constitutional tax exemption. The owners claim a tax imposed on exempt property gives rise to a tax legality challenge properly instituted through suit under LSA-R.S. 47:2110 after tax payment under protest. Specifically, the owners allege the vessels are engaged in international trade and, therefore, are exempt from property tax pursuant to La. Const. art. 7, § 21(C)(16), 7 [95-2873 La. 6] as demonstrated in Moonmaid Marine, Inc. v. Larpenter, 599 So.2d 820 (La.App. 1st Cir.), writ denied, 605 So.2d 1120 (La.1992).
A...
To continue reading
Request your trial
-
D90 Energy, LLC v. Jefferson Davis Parish Bd. of Review
... ... 5 (La. 6/26/09), 16 So.3d 1132, 1135, citing Triangle Marine, Inc. v. Savoie , 95-2873, p. 3 (La. 10/15/96), 681 So.2d 937, ... ...
-
Anr Pipeline Co. v. Louisiana Tax Com'n
...to rule on the constitutionality of statutes. Accordingly, in addition to the rule established by Triangle Marine [, Inc. v. Savoie, 95-2873 (La.10/15/96), 681 So.2d 937] allowing non-public service property taxpayers to file protests based on legality challenges directly in district court,......
-
Bass P'ship v. Gravolet
...formulates a two-track procedure a property owner must follow in challenging property tax assessments. See Triangle Marine, Inc. v. Savoie, 95–2873 (La.10/15/96), 681 So.2d 937. One track encompasses challenges to the “correctness of assessments” by the assessor and the other covers challen......
-
ANR Pipeline Co. v. Louisiana Tax Com'n, 2002-C-1479.
...directly in district court prior to the issuance of a final adjudication of assessed valuation by the LTC. In Triangle Marine, Inc. v. Savoie, 95-2873 (La.10/15/96), 681 So.2d 937, we noted that challenges to property tax assessments are categorized either as challenges to the "correctness ......