Appeal from the Louisiana Board of Tax Appeals In and for the
State of Louisiana No. 9069 The Honorable Anthony J. Graphia
(Retired), Chairman Presiding
Gregory E. Bodin Andrew C. Kolb Baton Rouge, Louisiana
Attorneys for Appellant Plaintiff - Security Plan Fire
D. Ryland Alexandria, Louisiana Attorney for Appellee
Defendants - James J. Donelon, in his capacity as
Commissioner of Insurance, State of Louisiana.
BEFORE: WELCH, CRAIN, AND HOLDRIDGE, JJ.
appeal concerns the Board of Tax Appeals'
("BTA") sustaining of a declinatory exception
raising the objection of lack of subject matter jurisdiction
that resulted in the dismissal of a taxpayer's petition
seeking a refund of taxes paid under protest. For the
following reasons, we reverse the BTA's dismissal of the
taxpayer's petition and find that the BTA has subject
matter jurisdiction over the dispute herein.
AND PROCEDURAL HISTORY
by the Commissioner of Insurance
Revised Statutes 22:1476(A)(1) requires the Commissioner of
Insurance for the Louisiana Department of Insurance
("Commissioner") to levy Louisiana Insurance Rating
("LIR") assessments against insurers doing business
in the state in proportion to their gross direct premiums
received in the state in the preceding year, less returned
premiums. The LIR assessments are in the nature of a tax. See
Audubon Ins. Co., v. Bernard, 434 So.2d 1072, 1075
certain percentage of revenue generated by LIR assessments is
deposited by the Commissioner with the state treasurer to be
credited to a special fund created in the state treasury
entitled the Municipal Fire and Police Civil Service
Operating Fund. La. R.S. 22:1476(A)(2) The legislature has
established the manner in which the funds are distributed
amongst the retirement systems to meet actuarial requirements
and other obligations. La. R.S. 22:1476(A)(3); see also
Louisiana Municipal Association v. State, 2004-0227 (La.
1/19/05), 893 So.2d 809, 830. Under La. R.S. 22:1476(A)(2),
monies in the fund shall be invested by the state treasurer
in the same manner as monies in the state general fund and
interest earned on investment of these monies shall be
credited to the state general fund. All unexpended and
unencumbered monies in the fund at the end of the fiscal year
shall revert to the state general fund. La. R.S.
22:1476(A)(2) and (4).
to La. R.S. 22:1476, the Commissioner assessed Security Plan
Fire Insurance Company ("Security") with $134,
483.57 in taxes, representing LIR assessments for 2014 and
corrected assessments for 2012 and 2013 (collectively
referred to herein as "assessments"). In a letter
dated August 6, 2014, the Commissioner classified an LIR
assessment as a tax and informed Security that it had the
right to appeal the assessment by filing a petition with the
BTA. Also, attached were LIR payment coupons, which also set
forth the taxpayer's right to appeal to the BTA and
referred Security to the provisions of La. R.S. 47:1431
August 21, 2014, Security remitted payment for the three
assessments to the Department of Insurance under protest and
requested a refund. Security asserted that as an industrial
fire company, it was not statutorily required to pay LIR
assessments. Security's letter accompanying the payments
noted that should the Department fail to refund said payments
by August 29, 2014, Security would prosecute its appeal with
of the Board of Tax Appeals
Department did not refund Security's payments, and on
August 29, 2014, Security filed a "Petition to Review
Denial of Tax Assessment Refund" with the BTA. The
petition alleged that the BTA had jurisdiction "over
this matter involving the determination of an overpayment or
refund of a tax assessment pursuant to La. R.S.
47:1407(1)." Security named the Commissioner as the
defendant. Attached to the petition was a letter dated August
6, 2014, wherein the Commissioner informed Security that it
had the right to appeal the assessment by filing a petition
with the BTA, as well as the LIR payment coupons that
referred to the taxpayers appeal rights under La. R.S.
47:1431 et seq.
having directed Security to file any appeal associated with
the payment of the assessments with the BTA, on May 19, 2015,
the Commissioner filed a declinatory exception with the BTA
raising the objection of lack of subject matter jurisdiction,
and a peremptory exception raising the objection of the
failure to join parties needed for a just adjudication. In
his peremptory exception, the Commissioner alleged that the
retirement systems that were recipients of the LIR
assessments were necessary parties. In his exception of lack
of subject matter jurisdiction, the Commissioner maintained
that the BTA did not have jurisdiction in the instant matter
because the Commissioner was not a "state
collector" under La. R.S. 47:1418 as amended by the
legislature in 2014. Further, the Commissioner noted that
under the version of La. R.S. 47:1431 in effect at that time,
a petition could only be filed against a "state
collector, " which excluded the Commissioner. Finally,
the Commissioner argued that Security's petition sought
recovery under the payment under protest procedure, which is
governed by La. R.S. 47:1576. Louisiana Revised Statutes
47:1576 requires the Secretary of the Department of Revenue
to be the "sole necessary and proper party defendant in
any such suit;" therefore, according to the Commissioner
no such action can be brought against him.
hearing on the Commissioner's exceptions was held by the
BTA on August 13, 2015. At that time, the parties stipulated
that they did not dispute that LIR assessments are a tax.
Further, counsel for the Commissioner acknowledged the
documents instructed Security to appeal to the BTA; however,
that position was subsequently ...