In September 2012, the Supreme Court of Mississippi reversed a Hinds County Chancery Court ruling that awarded AT&T nearly $13 million as a result of taxes it had purportedly overpaid; the Supreme court held that the chancery court lacked jurisdiction over the case because AT&T had not “properly appealed” the Mississippi State Tax Commission’s Assessment against it.
In 1993, AT&T filed a Mississippi income tax return with the Mississippi State Tax Commission, using the statutorily-prescribed “combined method” of reporting applicable to multi-state corporations such as itself. From 1994-1996, however, AT&T filed its returns under the “consolidated method” of reporting, statutorily available only to corporations doing business exclusively in Mississippi. It did so, ostensibly, to challenge the constitutionality of the distinction between the two statutorily-prescribed reporting methods.
Following an audit in 1997, the Commission issued a Tax Assessment of more than $5 million against AT&T. Ultimately, AT&T agreed to pay the Assessment, but “under protest.” It then filed a petition in the chancery court challenging the constitutionality of the applicable tax statutes.
Several years later, the chancery court agreed with AT&T that the tax statutes violated the Constitution’s Commerce Clause. It concluded that, as of November 30, 2010, AT&T was entitled to an award of more than $12.7 million (consisting of the original Assessment plus a Refund, as well as interest on both the Assessment and the Refund).
On appeal, the Mississippi Supreme Court held that AT&T had not followed the statutorily-prescribed procedures for challenging the Commission’s Tax Assessment. First, because it had voluntarily paid the disputed Tax Assessment, AT&T could not invoke the statute providing for “predeprivation process.” Second, because its petition to the chancery court was not accompanied with a bond for double the amount in controversy (as required by statute), the Commission’s findings became final, by operation of law, after 30 days. Thus, the chancery court lacked jurisdiction to decide the controversy. See: Mississippi Dept. of Revenue v. AT&T Corp., 101 So.3d 1139 (Miss. 2012).
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Related legal case
Mississippi Dept. of Revenue v. AT&T Corp.
|Cite||101 So.3d 1139 (Miss. 2012)|
|Level||State Supreme Court|