ST. MARY PARISH SALES AND USE TAX DEPARTMENT AND BARRY DUFRENE, IN HIS CAPACITY AS THE DULY APPOINTED DIRECTOR OF THE ST. MARY PARISH SALES AND USE TAX DEPARTMENT
Appealed from the Sixteenth Judicial District Court In and for the Parish of St. Mary, State of Louisiana. Suit Number 123761. Honorable Edward M. Leonard, Jr., Presiding.
William M. Backstrom, Jr., Matthew A. Mantle, New Orleans, LA, Counsel for Plaintiff/Appellee, GameStop, Inc.
Robert R. Rainer, Drew M. Talbot, Frederick Mulhearn, Baton Rouge, LA, Counsel for Defendant/Appellant, St. Mary Parish Sales and Use Tax, Department.
BEFORE: GUIDRY, THERIOT, AND DRAKE, JJ.
[2014 0878 La.App. 1 Cir. 2]
Defendants/Appellants, St. Mary Parish Sales and Use Tax Department and Barry Dufrene, in his capacity as the duly appointed Director of the St. Mary Parish Sales and Use Tax Department (collectively " the Department" ), appeal from a judgment of the district court granting summary judgment in favor of plaintiff, GameStop, Inc., and ordering the Department to refund to GameStop the total amount that it paid under protest, plus interest and penalties. For the reasons that follow, we affirm.
FACTS AND PROCEDURAL HISTORY
GameStop is a retailer that sells new and used video game hardware, software, and accessories to retail customers at stores located in St. Mary Parish, as well as other locations around the world. As part of its regular course of business, GameStop also accepts used games from its customers if it determines that the game is in a resalable or refurbishable condition. In these " trade-in" transactions, the customer can choose to: 1) receive cash for the video game; 2) trade-in the video game and apply the trade-in amount toward the purchase of another video game at GameStop; or 3) receive the determined trade-in amount for the video game on an " Edge Card" to be used by the customer at GameStop at a later date.
An Edge Card is a stored value card, obtained by a customer for free when he/she subscribes to Game Informer magazine, which can be loaded with the customer's trade-in credit and may be used as payment for future purchases. An Edge Card resembles a credit card, and each Edge Card has a unique number that is found on the back of the card and is also contained within the card's magnetic [2014 0878 La.App. 1 Cir. 3] strip. When a customer purchases a new game and applies the trade-in credit contained on his or her Edge Card, GameStop collects sales tax on the sales price of the game, minus the trade-in amount.
The Department conducted an audit of the books and records of GameStop for the tax periods December 1, 2005, through December 31, 2007, and determined that GameStop owed additional taxes, interest, and penalties. The Department issued a notice of assessment pursuant to La. R.S. 47:337.51, assessing additional taxes allegedly due for the taxable periods in the
amount of $5,258.21, plus interest in the amount of $2,545.32 and a penalty in the amount of $1,314.59. GameStop filed a written protest with the Department. Following a hearing on GameStop's protest, the Department issued a revised notice of assessment, assessing additional taxes allegedly due in the amount of $5,258.00, ...