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Duncan Oil, Inc. v. Calcasieu Parish School Board

Court of Appeals of Louisiana, Third Circuit

February 28, 2018

DUNCAN OIL, INC.
v.
CALCASIEU PARISH SCHOOL BOARD

         APPEAL FROM THE LOUISIANA BOARD OF TAX APPEALS LOCAL TAX DIVISION, NO. L00130 CADE R. COLE, LOCAL TAX JUDGE

          Russell J. Stutes, Jr. Stutes & Lavergne, LLC Counsel for Defendant/Appellee: Calcasieu Parish School Board.

          Lauren B. Bailey Attorney at Law Counsel for Plaintiff/Appellant: Duncan Oil, Inc.

          Court composed of Sylvia R. Cooks, Elizabeth A. Pickett, and Phyllis M. Keaty, Judges.

          PHYLLIS M. KEATY, JUDGE

         Plaintiff filed a petition with the Louisiana Board of Tax Appeals (the Board) for a redetermination of sales tax assessed against it by Defendant. After a trial, the Board rendered judgment granting in part and denying in part the petition, setting forth the amount of tax owed by Plaintiff to Defendant and awarding Defendant interest, penalties, and attorney fees. Plaintiff appeals. Because Plaintiff has not shown that the Board's judgment was manifestly erroneous, we affirm.

         FACTS AND PROCEDURAL HISTORY

         Duncan Oil, Inc. (Duncan) specializes in oil and gas exploration and development. It owned three active and producing wells in Calcasieu Parish during the time relevant to this matter. On March 6, 2015, the Calcasieu Parish School Board (CPSB) assessed Duncan with $59, 894.44 in sales and/or use tax, interest, penalties, and audit costs covering December 2010 through December 2013 (the Taxable Period). Soon afterward, Duncan petitioned the Board for a redetermination of the assessment against it, arguing that the CPSB had improperly classified non-taxable cleaning services as taxable repair services; improperly classified non-taxable charges as taxable gross proceeds in conjunction with a lease or rental; improperly classified other non-taxable services and charges as taxable services. Trial took place in June 2015, following which the Board took the matter under advisement. The Board issued a seven-page Order With Written Reasons on July 14, 2016, denying in part and granting in part Duncan's petition for redetermination, dismissing Duncan's claim and upholding the tax assessment subject to the modifications noted therein, awarding the CPSB audit costs and all applicable interest and penalties, along with attorney fees of ten percent of the amount due. Judgment was signed on August 30, 2016, in accordance with the previously issued written reasons, providing, in pertinent part, as follows:

V. The total amount due on the assessment of sales and use tax issued by the Calcasieu Parish School Board to Duncan Oil, Inc. for the period of December 2010 through December 2013 is calculated as follows:

Tax:

$26, 361.86

Interest through 8/31/16:

$19, 773.89

Penalties:

$ 6, 960.56

Attorney's Fees:

$ 5, 309.63

Audit Cost:

$ 7, 908.56

TOTAL

$66, 314.50

         Duncan timely appealed and is now before this court asserting the following assignments of error:

1. The trial court erred in finding non-taxable cleaning services as taxable repairs under R.S. 47:301(14)(g).
2. The trial court erred in finding non-taxable services in conjunction with rentals as taxable services under R.S. 47:302(B).
3. The trial court erred in awarding penalties, attorney's fees under R.S. 47:337.13.1, and audit costs under R.S. 47:337.75.

         DISCUSSION

         The standard of review applicable to this appeal was explicitly set forth by the Louisiana Supreme Court in International Paper, Inc. v. Bridges, 07-1151, pp. 9-10 (La. 1/16/08), 972 So.2d 1121, 1127-28 (quoting St. Pierre's Fabrication and Welding, Inc. v. McNamara, 495 So.2d 1295 (La.1986)):

Judicial review of a decision of the Board is rendered upon the record as made up before the Board and is limited to facts on the record and questions of law. The Board's findings of fact should be accepted where there is substantial evidence in the record to support them and should not be set aside unless they are manifestly erroneous in view of the evidence on the entire record.
As the [Collector of Revenue v.] Murphy Oil Co.[, 351 So.2d 1234 (La.App. 4 Cir. 1977)] court annunciated:
In this type of case, the Board acts as a trial court, its findings of fact should be accepted where there is substantial evidence in the record to support them, and should not be set aside unless they are manifestly erroneous in view of the reliable, probative and substantial evidence on the whole record. If the Board has correctly applied ...

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