Appealed from the 19th Judicial District Court. In and for the Parish of East Baton Rouge, State of Louisiana. Case No. C609,154. The Honorable William A. Morvant, Judge Presiding.
Mary E. Roper, Parish Attorney, Randy Ligh, Special Assistant Parish Attorney, Blake A. Pino, Assistant Parish, Attorney, Baton Rouge, Louisiana, Counsel for Defendant/Appellant, City of Baton Rouge.
David R. Cassidy, David R. Kelly, Nicole F. Gould, Baton Rouge, Louisiana, Counsel for Plaintiff/Appellee, Pot-O-Gold Rentals, LLC.
BEFORE: KUHN, GUIDRY, McDONALD, HIGGINBOTHAM, AND THERIOT, JJ. McDonald, J. dissents and assign reasons, Higginbotham, J. dissents and adopts J. McDonald's reasons.
[2013 1323 La.App. 1 Cir. 2]
The defendant, the City of Baton Rouge and Parish of East Baton Rouge (City) appeals the judgment of the Nineteenth Judicial District Court rendered in favor of the plaintiff, Pot-O-Gold Rentals, LLC (Pot-O-Gold). On motion for summary judgment, the trial court determined that the plaintiffs waste removal services were not taxable as gross proceeds derived from the lease or rental of tangible personal property and ordered the City to refund taxes that had been paid by the plaintiff under protest. For the following reasons, we reverse and remand.
STATEMENT OF THE FACTS
Pot-O-Gold is a Louisiana limited liability company that offers a variety of waste management services. Relevant here, Pot-O-Gold owns portable toilets and holding tanks that it leases to customers, and offers cleaning and sanitation services for these rented toilets and tanks. Pot-O-Gold's related waste management services include the pumping, removing, hauling, and disposal of generated or collected human waste in its rented toilets and tanks. Pot-O-Gold also offers cleaning and sanitation services for portable toilets and holding tanks owned by others and does not require rental customers to purchase its sanitation or cleaning service. However, if a rental customer chooses to reject related sanitation or cleaning service, the customer is charged a higher rental fee.
The present dispute derives from a 2011 sales and use tax compliance audit of Pot-O-Gold's operations conducted by the City for the period from January 1, 2007 through December 31, 2008. The audit revealed that, although Pot-O-Gold collected taxes on its rentals of portable toilets and holding tanks, it had not generally collected taxes for the cleaning or sanitation services it provided in connection with these rentals or for fuel [2013 1323 La.App. 1 Cir. 3] surcharges on such rentals. Thus, the City issued a $69,821.65 assessment to Pot-O-Gold, representing the sum of sales taxes owed ($37,160.92) along with interest ($23,370.14) and penalties ($9,290.59). Pot-O-Gold paid the assessment under protest and filed the instant suit seeking recovery thereof.
ASSIGNMENTS OF ERROR
On appeal, the City argues that the trial court erred in granting Pot-O-Gold's motion for summary judgment. Specifically, the City contends:
1) The trial court erred by allowing the splitting and dividing of proceeds from rental contracts into taxable and nontaxable components.
2) The trial court erred by failing to recognize that services, ordinarily nontaxable if standing alone, may nonetheless be taxable as gross proceeds derived from a lease or rental.
3) The trial court erred by inappropriately relying on and misinterpreting relevant jurisprudence.
4) The trial court erred by relying on non-binding Revenue Rulings and a letter sent by the Louisiana Department of Revenue.
5) The trial court erred by granting Pot-O-Gold's motion for summary judgment even though there were ...