Stokes v. Jackson Sales & Storage Co.

374 So.3d 1197

Charles E. STOKES, in the Official Capacity of Tax Assessor of Hinds County, Mississippi; and Hinds County, Mississippi

v.JACKSON SALES & STORAGE COMPANY

NO. 2022-CA-00371-SCT

Supreme Court of Mississippi.

11/30/2023

HINDS COUNTY CIRCUIT COURT, HON, DAVID ANTHONY CHANDLER, JUDGE

ATTORNEYS FOR APPELLANTS: TONY R, GAYLOR, Jackson, LATOYA REDD THOMPSON

ATTORNEYS FOR APPELLEE: SHELDON G. ALSTON, JACOB ARTHUR BRADLEY, Jackson

BEFORE RANDOLPH, C.J., ISHEE AND GRIFFIS, JJ.

ISHEE, JUSTICE, FOR THE COURT:

¶1. For nearly forty years, Hinds County granted Jackson Sales & Storage Co. (JSSC) an annual exemption from ad valorem property taxes. In 2019, however, the County reversed course. It denied JSSC an exemption, claiming JSSC lacked the requisite free-port-warehouse license to qualify. It also assessed JSSC back taxes for 2012-18.

¶2. Aggrieved, JSSC sought relief in Hinds County Circuit Court. There, the circuit court found the license JSSC received from the State Tax Commission¹ in 1981 "is not subject to renewal and has been valid and in effect at all times since its original granting." It also found JSSC owes no taxes for 2012-18 and 2019.

¶3. Charles E. Stokes, the Hinds County Tax Assessor, and Hinds County now appeal, raising questions of statutory interpretation regarding Mississippi Code Sections 27-31-51 through -61. In doing so, they petition us to determine the validity of JSSC's license and to resolve whether the County has discretion over granting JSSC an exemption.

¶4. Given the statutory language and legislative history before us, we make four conclusions. First, JSSC's license is and has been valid and in effect since 1981. Second, JSSC’s license is subject to renewal. Third, the County forfeited its right to taxes for 2012-18. Fourth, the County has discretion over granting JSSC an exemption and is accordingly owed taxes for 2019. We therefore affirm in part and reverse and render in part.

FACTS

¶5. JSSC is a subsidiary of National Presto Industries. It operates a warehouse in Hinds County where it intakes manufactured goods from out of state, stores them for a brief period, then ships a significant portion of them back out of the state. This portion makes up JSSC’s in-transit personal property.

¶6. On January 5, 1981, the tax commission granted JSSC a license to operate its warehouse as a free port warehouse. This license exempted JSSC’s in-transit personal property from ad valorem taxes. Miss. Code Ann. § 27-31-53 (Rev. 1972). But the license was subject to annual renewal. Miss. Code Ann. § 27-31-57 (Rev. 1972).

¶7. Before renewal became necessary, the Legislature made two important statutory changes effective January 1, 1982. First, it removed the annual license renewal requirement. Miss. Code Ann. § 27-31-57 (Supp. 1981). Second, it transferred discretion over exemptions from the tax commission to county boards of supervisors. Miss. Code Ann. § 27-31-53 (Supp. 1981). The Legislature left the issuance of licenses, however, to the tax commission. Miss. Code Ann. § 27-31-51 (Supp. 1981). It also mandated that certain exemptions granted by the tax commission "shall continue in full force and effect." S.B. 2839, Reg. Sess., 1981 Miss. Laws ch. 419, § 5.

¶8. Despite its newfound discretion over exemptions, the Hinds County Board of Supervisors entered JSSC’s exemption into its minutes each year from 1982-97, thereby honoring JSSC’s license. Then, between 1998 and 2019, a series of four exchanges took place between JSSC and the Hinds County Tax Assessor.

¶9. First, in 1998, the tax assessor sent a letter to JSSC claiming it had no record of JSSC’s license and would therefore be subjecting all of JSSC’s inventory to ad valorem taxation. In response, JSSC argued: (1) its license continued to be valid and in effect since there was no longer an annual license renewal requirement, and (2) it remained exempt since the "shall continue in full force and effect" language of Senate Bill 2839 grandfathered in its exemption. Following this exchange, the tax assessor took no further action, and the board of supervisors entered JSSC’s exemption into its minutes.

¶10. Next, in 2001, JSSC renotified the tax assessor of the 1998 exchange. Once again, the tax assessor took no further action, and the board of supervisors entered JSSC’s exemption into its minutes.

¶11. Between the second and third exchanges, the Legislature transferred the authority to issue free-port-warehouse licenses from the tax commission to county boards of supervisors. Miss. Code Ann. § 27-31-51 (Rev. 2002).

¶12. In 2018, the parties virtually repeated the 1998 exchange. The tax assessor sent JSSC a letter making its previous claims. JSSC reiterated its arguments. The tax assessor took no further action, and the board of supervisors entered JSSC’s exemption into its minutes.

¶13. In 2019, however, the tax assessor sent the 2018 letter a second time and rejected JSSC’s arguments. It assessed taxes on JSSC’s 2019 inventory in the amount of $294,871.64 and assessed JSSC back taxes for 2012-18 in the amount of $2,505,814.03.

¶14. JSSC paid $4,147.12—the amount due on its 2019 inventory that was not in-transit personal property—but withheld the remainder since, in its view, it was exempt. JSSC then sought relief from the board of supervisors, but the board of supervisors rejected JSSC’s arguments, determining JSSC owed the taxes.

¶15. JSSC turned to the Hinds County Circuit Court. It filed a petition for appeal from the board of supervisors’ determination against the tax assessor and Hinds County on August 26, 2020. It then filed a motion for declaratory judgment on November 5, 2021, contending its license and its exemption were grandfathered in by statute. The tax assessor and Hinds County responded with a motion for summary judgment, maintaining JSSC does not have a valid license and is therefore not entitled to an exemption.

¶16. On March 28, 2022, the circuit court granted JSSC’s motion for declaratory judgment. It held JSSC’s license has been valid and in effect since 1981 and is not subject to renewal. And it held JSSC owes no taxes for 2012-19. The tax assessor and Hinds County then filed a motion to alter judgment. But the circuit court denied the motion, and the tax assessor and Hinds County filed a notice of appeal on April 18, 2022.

STANDARD OF REVIEW

[1–5] ¶17. "This Court applies a de novo standard of review to questions of law, including a motion for a declaratory judgment." Virden v. Campbell DeLong, LLP, No. 2021-CT-00478-SCT, 371 So.3d 1256 (Miss. Sept. 28, 2023) (internal quotation marks omitted) (quoting S.C. Ins. Co. v. Keymon, 974 So. 2d 226, 229 (Miss. 2008)). And further, "[t]his Court reviews matters of statutory interpretation de novo." Bd. of Supervisors of Jackson Cnty. v. Qualite Sports Lighting, LLC, 337 So. 3d 1040, 1043 (Miss. 2022) (internal quotation marks omitted) (quoting Am. Tower Asset Sub, LLC v. Marshall Cnty., 324 So. 3d 300, 302 (Miss. 2021)). "If the words of a statute are clear and unambiguous, the Court applies the plain meaning of the statute and refrains from using principles of statutory construction." Id. (internal quotation marks omitted) (quoting Am. Tower, 324 So. 3d at 302). "This Court ‘cannot … add to the plain meaning of the statute or presume that the legislature failed to state something other than what was plainly stated.’ " Id. (alteration in original) (internal quotation marks omitted) (quoting Am. Tower, 324 So. 3d at 302). "But if the statute is ambiguous or silent on a specific issue, statutory interpretation is appropriate, and the Court must ‘ascertain the intent of the legislature from the statute as a whole and from the language used therein.’ " Id. (internal quotation marks omitted) (quoting Am. Tower, 324 So. 3d at 302).

DISCUSSION

1. JSSC’s free-port-warehouse license

[6] ¶18. Since JSSC qualifies for an exemption only if it has a valid free-port-warehouse license, Miss. Code Ann. § 27-31-53 (Rev. 2017), we first determine the validity of JSSC’s license.

¶19. Mississippi Code Section 27-31-51 provides in relevant part:

[L]icenses shall be issued by the [board of supervisors] to such warehouse or storage facility as will qualify under the definition of "free port warehouse" as herein defined, upon application by the warehouse or storage facility operator.

Miss. Code Ann. § 27-31-51(3) (Rev. 2017). Further,

a manufacturer of personal property that maintains separate facilities, structures, places or areas for the temporary storage and handling of such personal property pending transit to a final destination outside the State of Mississippi shall be eligible for licensing under Sections 27-31-51 through 27-31-61 as a "free port warehouse," and any license issued to such a manufacturer before January 1, 2012, is hereby ratified, approved and confirmed.

Miss. Code Ann. § 27-31-51(2) (Rev. 2017).

¶20. In addressing licenses issued prior to January 1, 2012, the Legislature’s purpose was "to clarify that manufacturers of personal property that maintain separate facilities for the temporary storage and handling of such personal property pending transit to a final destination outside the State of Mississippi are eligible for licensing as a ‘free port warehouse’…." S.B. 2342, Reg. Sess., 2012 Miss. Laws ch. 342.

¶21. This clarification confirms JSSC, as a subsidiary of Presto, was in 1981 and continues to be eligible for a license. But it does not speak to the current validity of JSSC’s license. We must therefore determine legislative intent.

¶22. To reiterate, the Legislature removed the annual license renewal requirement effective January 1, 1982. Miss. Code Ann. § 27-31-57 (Supp. 1981). In the years since, however, it has not further addressed licenses issued prior to 1982. While it transferred the authority to issue licenses from the tax commission to the board of supervisors in 2002, it did not provide that the transfer invalidated licenses previously granted by the tax...