Weeks Dredging & Contracting, Inc. v. Mississippi State Tax Com'n, 57358

• Decision Date: 02 March 1988
• Docket Number: No. 57358,57358
• Parties: WEEKS DREDGING & CONTRACTING, INC. v. MISSISSIPPI STATE TAX COMMISSION.
• Court: Mississippi Supreme Court

Page 884

521 So.2d 884

WEEKS DREDGING & CONTRACTING, INC. v. MISSISSIPPI STATE TAX COMMISSION.

No. 57358.

Supreme Court of Mississippi.

March 2, 1988.

Hugh C. Montgomery, Jr., J. Paul Varner, Charles L. Brocato, Magruder, Montgomery, Brocato & Hosemann, Jackson, for appellant.

Bobby R. Long, James S. Pounds, Jackson, for appellee.

Before DAN M. LEE, P.J., and ROBERTSON and GRIFFIN, JJ.

DAN M. LEE, Presiding Justice, for the Court:

Weeks Dredging & Contracting, Inc. (Weeks) seeks a refund of $94,861.33 in taxes and interest it paid to the Mississippi State Tax Commission for use and consumption of diesel fuel purchased in Alabama. Weeks used the fuel during its dredging operation on the Tennessee-Tombigbee Waterway.

Weeks paid the assessment, then filed suit in Hinds County Chancery Court after an unfavorable ruling by the full Commission. The chancellor heard the trial on numerous stipulations and other evidence on September 12, 1985. On March 17, 1986, the chancellor rendered an opinion and entered judgment denying Weeks a refund.

Weeks appeals, assigning four errors:

I. THE CHANCERY COURT ERRED IN DETERMINING THAT THE UNAMBIGUOUS LANGUAGE OF SECTION 27-67-7 OF THE MISSISSIPPI CODE OF 1972 DOES NOT APPLY TO PROVIDE A CREDIT FOR THE SALES TAX PAID BY APPELLANT TO ALABAMA.

II. THE CHANCERY COURT ERRED IN DETERMINING THAT THE SALES OF FUEL TO APPELLANT WERE NOT COMPLETED IN ALABAMA.

III. THE CHANCERY COURT ERRED IN DETERMINING THAT THE ALABAMA SALES TAX WAS IMPROPERLY IMPOSED AND COLLECTED BY ALABAMA.

IV. THE CHANCERY COURT ERRED IN DETERMINING THAT THE REFUSAL BY APPELLEES TO ALLOW APPELLANT A CREDIT FOR THE SALES TAX PAID TO ALABAMA DID NOT RESULT IN AN UNCONSTITUTIONAL BURDEN AGAINST INTERSTATE COMMERCE.

Finding that the chancellor committed no reversible error, we affirm.

I. FACTS

Weeks is a New Jersey corporation with its principal office in Cranford, New Jersey, qualified to do business in Mississippi. October 25, 1980, through September 30, 1982, Weeks performed dredging work for construction of the Tennessee-Tombigbee Waterway in northeast Mississippi. During this period Weeks ordered diesel fuel from its field office in Columbus, Mississippi, to complete its contract.

Several times Weeks ordered fuel from Chevron, USA, Inc., by calling Chevron's California office. Chevron produced fuel at its refinery in Pascagoula, Mississippi, and subsequently stored it for distribution in Moundville, Alabama. After it received Weeks' orders, Weeks would prepare and mail a purchase order to the terminal and also issue a purchase order directly to a common carrier indicating pickup and delivery points. Chevron notified the carrier when it could make pickups.

All fuel purchase orders listed terms as F.O.B., Moundville, Alabama. Chevron did not pay the common carrier or provide delivery.

The common carrier would prepare a bill of lading identifying Chevron as the shipper, identifying Weeks as the consignee, and giving a Mississippi destination. Spaces for the shipper's signature on the bills of lading were left blank or marked refused.

At the Chevron terminal the common carrier would receive a combination delivery receipt and "Original Invoice" when Chevron released fuel to it. Weeks would pay Chevron according to this invoice, and also would pay the carrier's shipment charges.

Chevron collected Alabama state and local sales taxes on the purchases at a rate of 4% for state sales tax and 2% for local sales tax. These taxes were clearly shown on the invoices as separate items, and Chevron paid these collections to the State of Alabama.

July 3, 1983, the Mississippi State Tax Commission notified Weeks by letter of a $74,312.55 use tax assessment, with interest of $15,346.90, making a total deficiency of $89,659.45. The assessment covered consumption of diesel fuel in Mississippi. Weeks proceeded to seek administrative relief from what it viewed as an improper assessment. Concurrently, on August 8, 1983, Weeks and Chevron filed with the Alabama Department of Revenue a joint petition for a tax refund. This petition was denied November 23, 1983. The record does not reflect that Weeks or Chevron ever appealed this decision. There was no stipulation to the total amount of tax paid to Alabama.

The Mississippi assessment was appealed to the Board of Review pursuant to Miss.Code Ann. Sec. 27-67-23 on July 27, 1983, and the assessment was upheld by a Board order dated August 9, 1983. Weeks filed an appeal of the Board of Review's determination to the entire Commission pursuant to Sec. 27-67-23. The Commission affirmed the assessment November 30, 1983, and tacked on interest totalling $5,201.88, for a total deficiency of $94,861.33. Weeks paid this amount on February 8, 1984, and began this refund suit on June 26, 1984.

The suit came on for hearing September 12, 1985. The only live testimony the chancellor heard came from Ed Chamblee, director of the State Tax Commission Revenue Bureau. He testified that a tax credit pursuant to Miss.Code Ann. Sec. 27-67-7 was not given because in Mississippi a similar sale would have been exempt from the state sales tax and, thus, the Alabama tax was not properly collected. It has been the Tax Commission's position, for as long as Chamblee could remember, that had the sale occurred here and an exemption been allowed under Mississippi law, then a tax credit is not allowed. Chamblee also stated that to his knowledge the Commission has never given tax credit for paying local taxes in other states.

The chancellor rendered an opinion, which he incorporated by reference into his decree, stating that the Alabama sales tax paid by Weeks was a burden on interstate commerce, that the Commission was justified in determining that these taxes were improper, and, thus, Mississippi's use tax should be imposed without giving Weeks credit. The court's judgment affirming the assessment and interest reflected this opinion.

From this judgment Weeks has timely perfected this appeal.

II.

Did the Court Err in Failing to Find that Miss.Code Ann.

Sec. 27-67-7 Unambiguously Provides for a Tax

Credit?

At issue is the proper interpretation of Miss.Code Ann. Sec. 27-67-7 (Supp.1987), which provides that a use tax will not be collected

(a) On the use, storage or consumption of any tangible personal property if the sale thereof has already been included in the measure of this tax or the tax imposed by sections 27-65-17, 27-65-19 or 27-65-25, Mississippi Code of 1972, or has already been included in the measure of a sales tax imposed by another state in which the property was sold or use tax imposed by some other state in which the property was used.... [emphasis added]

Weeks agrees this is an exemption provision and that exemption provisions are to be strictly construed against the taxpayer. Crosby v. Barr, 198 So.2d 571, 573 (Miss.1967); Interstate Oil Pipe Line Co. v. Stone, 203 Miss. 715, 728, 35 So.2d 73, 77 (1948).

Weeks argues, however, that this rule of construction comes into play only when a statute is ambiguous. Pinkton v. State, 481 So.2d 306, 309 (Miss.1985); Barr, 198 So.2d at 573. This Court generally will not construe plain and unambiguous statutes. See Clark v. State ex rel Mississippi State Medical Association, 381 So.2d 1046, 1048 (Miss.1980); Forman v. Carter, 269 So.2d 865, 868 (Miss.1972); State v. Heard, 246 Miss. 774, 151 So.2d 417, 420 (1963); Yerger v. State, 91 Miss. 802, 822, 45 So. 849, 853 (1908). Weeks places great reliance on First National Bank of Memphis v. State Tax Commission, 210 Miss. 590, 599, 49 So.2d 410, 412 (1950), where it is said:

The Courts have no right to add anything to or take anything from a statute, where the language is plain and unambiguous. To do so would be entrenching upon the power of the Legislature. Neither have the Courts authority to write into the statute something which the Legislature did not itself write therein....

* * *

No principle is more firmly established or rests upon more secure foundations, than the rules which declare when a law is plain and unambiguous, whether it be expressed in general or limited terms that the Legislature shall be deemed to have intended to mean what they have plainly expressed, and, consequently, no room is left for construction in the application of such law.

Id. 49 So.2d at 412. See also Pinkton v. State, 481 So.2d 306, 309 (Miss.1985).

Since the transfer of the fuel to Weeks "has already been included in the measure of a sales tax imposed by another state ...," under the plain words of the statute the consumption of the fuel is exempt from the Mississippi use tax, Weeks argues.

The question, then, is whether the phrase "included in the measure of a sales tax imposed by another state" is sufficiently ambiguous that some statutory construction is necessary. We think that it is. It does not take much imagination to visualize similar situations to which we cannot apply this phrase without some construction. For example, how should this Court decide a case where a like tax is initially imposed in another state, collected and then refunded on appeal as improperly imposed. Thus, the time at which at tax is "imposed" according to the statute contemplates an ambiguity.

Impose means: "to levy or exact by authority; to lay as a burden, tax duty or charge." Black's Law Dictionary 680 (5th ed. 1979). Thus, imposed fairly implies taxation by authority. Since impose usually means to levy by authority, the plain words seem to require that a credit be given only for sales taxes levied by another state which has the authority to impose such a tax.

Thus, even by its plain words the statute fairly implies a requirement that the tax paid in another state be properly imposed. Otherwise, Weeks could pay even the most patently improper tax assessments in another state, gain an exemption in Mississippi, then gain a refund in the taxing state. Weeks thus advocates we provide a vehicle to potentially insulate it...