MISSISSIPPI LEGISLATURE
2014 Regular Session
To: Ways and Means
By: Representative Smith (39th)
AN ACT TO AMEND SECTION 27-77-7, MISSISSIPPI CODE OF 1972, TO REVISE THE STANDARD OF REVIEW EXERCISED BY THE CHANCERY COURT REGARDING CERTAIN MATTERS WHEN CONSIDERING APPEALS FROM THE BOARD OF TAX APPEALS; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 27-77-7, Mississippi Code of 1972, is amended as follows:
27-77-7. (1) The findings and order of the Board of Tax Appeals entered under Section 27-77-5 shall be final unless the agency or the taxpayer shall, within sixty (60) days from the date of the order, file a petition in the chancery court appealing the order. If the petition under this subsection is filed by the taxpayer, the petition shall be filed against the Department of Revenue as respondent. If the petition under this subsection is filed by the agency, the petition shall be filed against the taxpayer as respondent. The petition shall contain a concise statement of the facts as contended by the petitioner, identify the order from which the appeal is being taken and set out the type of relief sought. If in the action, the taxpayer is seeking a refund or credit for an alleged overpayment of tax or for taxes paid in protest under subsection (3) of this section, the taxpayer shall allege in the petition or in his answer, where the appeal is filed by the agency, that he alone bore the burden of the tax sought to be refunded or credited and did not directly or indirectly collect the tax from anyone else. The respondent to the petition has thirty (30) days from the date of service of the petition to file a cross-appeal.
(2) A petition under subsection (1) of this section shall be filed in the chancery court of the county or judicial district in which the taxpayer has a place of business or in the Chancery Court of the First Judicial District of Hinds County, Mississippi; however, a resident taxpayer may file the petition in the chancery court of the county or judicial district in which he is a resident. If both the agency and the taxpayer file a petition under subsection (1) of this section, the appeals shall be consolidated and the chancery court where the taxpayer filed his petition shall have jurisdiction over the consolidated appeal.
(3) A petition filed by a taxpayer under subsection (1) of this section that appeals an order of the Board of Tax Appeals affirming a tax assessment shall be accompanied by a surety bond approved by the clerk of the court in a sum half the amount in controversy, conditioned to pay the judgment of the court. The clerk shall not approve a bond unless the bond is issued by a surety company qualified to write surety bonds in this state. Notwithstanding the above bond requirement, the chancellor retains jurisdiction, after motion, notice and hearing, to reduce the amount of the bond provided herein or to forego the bond in its entirety if he finds that the interest of the state to obtain payment of the taxes, penalties and interest in issue in the appeal are otherwise protected. As an alternative to the posting of bond, a taxpayer appealing an order of the Board of Tax Appeals affirming a tax assessment may, prior to the filing of the petition, pay to the agency, under protest, the amount ordered by the Board of Tax Appeals to be paid and seek a refund of such taxes, plus interest thereon, in the appeal. The taxpayer shall pay to the agency any tax included in the assessment which he is not contesting. If the petition initiating the appeal is filed by the taxpayer, the payment of the uncontested tax shall be made prior to the expiration of the sixty-day time period for filing a petition under subsection (1) of this section. If the petition initiating the appeal is filed by the agency, the payment of the uncontested tax shall be made prior to the expiration of the sixty-day time period for the filing of the petition. Failure of the taxpayer to timely pay the uncontested tax shall bar the taxpayer from obtaining a reduction, abatement and/or refund of any contested tax in the appeal and shall result in the taxpayer's appeal or cross-appeal being dismissed with prejudice and with judgment being entered granting the agency the relief it requested.
(4) In an action under this section resulting from an order of the Board of Tax Appeals involving a refund claim denial, the agency shall refund or credit to the taxpayer, as provided by law, the amount of any overpayment included in the refund claim which the agency does not contest. If the petition initiating the appeal is filed by the agency, the uncontested overpayment shall be paid or credited to the taxpayer prior to the expiration of the sixty-day time period for filing a petition under subsection (1) of this section. If the petition initiating the appeal is filed by the taxpayer, such uncontested overpayment shall be paid or credited to the taxpayer prior to the expiration of the thirty-day time period for the filing of an answer or other response to the petition as provided in subsection (5) of this section. Failure of the agency to timely pay or credit the uncontested overpayment to the taxpayer shall bar the agency from obtaining an affirmation, in whole or in part, of the refund claim denial in issue and shall result in the agency's appeal or cross-appeal being dismissed with prejudice and judgment being entered granting the taxpayer the relief he requested, excluding however any request for the awarding of attorney fees.
(5) Upon the filing of the
petition under subsection (1) of this section, the clerk of the court shall
issue a summons to the respondent requiring the respondent to answer or
otherwise respond to the petition within thirty (30) days of service. Where
the agency is the respondent, the summons shall be served on the agency by
personal service on the commissioner as the chief executive officer of the
agency. The chancery court in which a petition under subsection (1) of this
section is properly filed shall have jurisdiction to hear and determine the
cause or issues joined as in other cases. In any petition, cross-appeal or
answer in which the taxpayer is seeking a refund or credit for an alleged
overpayment of tax or for taxes paid under protest under subsection (3) of this
section, the taxpayer shall prove by a preponderance of the evidence that he
alone bore the burden of the tax sought to be refunded or credited and did not
directly or indirectly collect the tax from anyone else. At trial of any
action brought under this section, the chancery court shall give * * *
consideration to
the * * * regulations issued by the
Department of Revenue as it does with * * * any other
administrative agency, but it shall try the case de novo, both as to the
scope of review and the standard of review, and conduct a full evidentiary
judicial hearing on the issues raised. Based on the evidence presented at
trial, the chancery court shall determine whether the party bringing the appeal
has proven by a preponderance of the evidence or a higher standard if required
by the issues raised, that he is entitled to any or all of the relief he has
requested. The chancery court shall decide all questions presented, including
those as to legality and the amount of tax or refund due, and if it finds that
the tax assessment or denial of refund claim in issue is incorrect or invalid,
in whole or in part, it shall determine the amount of tax or refund due,
including interest and, if applicable, penalty to date, and enter such order or
judgment as it deems proper. Interest and penalty included in this
determination shall be computed by the court based on the methods for computing
penalty and interest as specified by law for the type of tax in issue. When
the chancery court determines that an overpayment exists, the determination as
to whether such overpayment shall be refunded to the taxpayer or credited
against the taxpayer's future taxes shall be made by the chancery court based
on the method for handling overpayments as specified by the law for the type of
tax in issue. Either the agency or the taxpayer, or both, shall have the right
to appeal from the order of the chancery court to the Supreme Court as in other
cases. If an appeal is taken from the order of the chancery court, the bond
provided for in subsection (3) of this section shall continue to remain in
place until a final decision is rendered in the case.
SECTION 2. This act shall take effect and be in force from and after July 1, 2014.