Pursue Energy Corp. v. Miss. State Tax Comm'n


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Docket Number: 2006-CA-01390-SCT
Linked Case(s): 2006-CA-01390-SCT

Supreme Court: Opinion Date: 09-20-2007
Opinion Author: CARLSON, J.
Holding: AFFIRMED

Additional Case Information: Topic: Use tax assessment - Exemption - Section 27-67-7(b) - Standard of review - Judicial estoppel
Judge(s) Concurring: SMITH, C.J., WALLER AND DIAZ, P.JJ., EASLEY, GRAVES, DICKINSON, RANDOLPH AND LAMAR, JJ.
Procedural History: Summary Judgment
Nature of the Case: CIVIL - STATE BOARDS AND AGENCIES

Trial Court: Date of Trial Judgment: 07-27-2006
Appealed from: RANKIN COUNTY CHANCERY COURT
Judge: Thomas L. Zebert
Disposition: Granted summary judgmetn in favor of Appellee

  Party Name: Attorney Name:  
Appellant: PURSUE ENERGY CORPORATION




JAMES T. KNIGHT C. GLEN BUSH



 

Appellee: MISSISSIPPI STATE TAX COMMISSION WILLIAM F. BLAIR TROY FARRELL ODOM GEOFFREY C. MORGAN GARY WOOD STRINGER  

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Topic: Use tax assessment - Exemption - Section 27-67-7(b) - Standard of review - Judicial estoppel

Summary of the Facts: In 2001, the Mississippi State Tax Commission audited Pursue Energy Corporation to determine use tax liability for the gas used by Pursue. Pursuant to the audit, the Commission determined that Pursue owed $354,674.00 in use taxes, penalties and interest. The Commission issued an assessment against Pursue for $312,988.00. Pursue appealed the assessment to the Commission’s Board of Review which upheld the use tax assessment. Pursue appealed to the full Commission which also upheld the original assessment. The Commission assessed $353,203.00 for taxes, penalties, and interest. Pursue subsequently paid the full amount of the assessment. However, rather than appeal the full Commission’s ruling to the chancery court, Pursue filed for Chapter 11 bankruptcy protection. The Commission filed a motion for summary judgment. Pursue filed its own motion for summary judgment. The chancellor granted the Commission’s motion, and denied Pursue’s request for a refund of use taxes paid. Pursue appeals.

Summary of Opinion Analysis: Issue 1: Use tax Pursue argues that the chancellor erred in holding that Pursue’s use of its own gas for its operations is subject to the use tax. Pursue argues that it is exempt from paying use tax on the gas as a wholesaler pursuant to section 27-67-7(b), which states that use taxes shall not be collected “[o]n the use, storage or consumption of tangible personal property to the extent that sales of similar property in Mississippi are either excluded or specifically exempt from sales tax or are taxed at the wholesale rate.” Although Pursue is a wholesaler, as Pursue sells most of its gas to other companies for resale, the gas used at the plant was never sold at wholesale for resale by another company. Instead, Pursue treated the transaction as a sale to itself and used the gas to fuel its own operations. Thus, Pursue cannot avail itself of the wholesaler exemption. Pursue also argues that the use tax only applies to out-of-state purchases brought into Mississippi for use. Because both interstate and intrastate taxpayers who use their own fuel to power their plants are required to pay a use tax on fuel consumed in Mississippi, it is irrelevant whether Pursue’s gas came from within Mississippi’s borders or was brought into the state. Issue 2: Standard of review Pursue argues that the chancellor should have applied a de novo standard of review, rather than giving great weight and deference to the Commission. While Pursue argues that it did not receive an evidentiary hearing, Pursue misses the fact that it filed its own motion for summary judgment. In fact, the chancellor, at the conclusion of the hearing on the Commission’s motion for summary judgment, invited Pursue to schedule its own hearing. Since Pursue apparently chose not to have its motion for summary judgment set for a hearing, there is no error. Issue 3: Judicial estoppel Pursue argues that there were outstanding issues of material fact. Pursue is estopped from arguing this issue, as it filed its own motion for summary judgment. Because of judicial estoppel, a party cannot assume a position at one stage of a proceeding and then take a contrary stand later in the same litigation.


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