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American Multi-Cinema, Inc. v. Normand

Court of Appeals of Louisiana, Fifth Circuit

March 27, 2019

AMERICAN MULTI-CINEMA, INC. A/K/A AMC THEATERS
v.
NEWELL NORMAND, SHERIFF AND EX-OFF ICIO TAX COLLECTOR FOR THE PARISH OF JEFFERSON

          ON APPEAL FROM THE BOARD OF TAX APPEAL STATE OF LOUISIANA NO. L00215 HONORABLE CADE R. COLE, JUDGE PRESIDING

          Counsel For Plaintiff/Appellee, American Multi-Cinema, Inc. A/K/A amc Theaters Jaye A. Calhoun Linda S. Akchin William J. Kolarik, II

          Counsel For Defendant/Appellant, Newell Normand Sheriff And Ex-Officio Tax Collector, Jefferson Parish And Jefferson Parish Bureau Of Revenue And Taxation Kenneth C. Fonte

          Panel composed of Judges Jude G. Gravois, Robert A. Chaisson, and John J. Molaison, Jr.

          JUDE G. GRAVOIS JUDGE.

         Appellant, Newell Normand, Sheriff and Ex-Officio Tax Collector for the Parish of Jefferson, appeals a judgment of a Louisiana Board of Tax Appeals judge which granted a motion for summary judgment filed by American Multi-Cinema, Inc., a/k/a AMC Theaters, [1] finding that the annual membership fees for AMC's Stubs Rewards Program are not subject to Jefferson Parish sales taxes because those fees are not a taxable "sale of service" for purposes of La. R.S. 47:301(14)(b)(i)(aa). For the following reasons, we affirm.

         FACTS AND PROCEDURAL HISTORY

         AMC Theaters is a business headquartered in Leawood, Kansas, operating movie theaters nationwide, with three locations in Jefferson Parish.[2] Pertinent to this case, on April 1, 2011, AMC introduced a loyalty rewards program to its patrons called the "Stubs Rewards Program," which allows those patrons who purchase a Stubs Rewards membership for $12 per year to accrue "virtual rewards" on the purchases of goods and services at the theaters. For every $100 Stubs Rewards members spend on goods and services at AMC, they accrue a virtual reward of $10 that they can use toward the future purchase of goods and services at the theaters.[3] [4] Stubs Rewards members also get free upgrades on fountain drinks and popcorn and waiver of certain online ticketing fees.

         On June 29, 2015, the Sheriff commenced an audit of AMC's three Jefferson Parish locations for sales/use taxes, for the audit period of June 1, 2011 through May 31, 2015.[5] In its November 2, 2015 audit reports, the Sheriff determined that AMC owed sales taxes on both the sale and the renewal of the membership fees in its Stubs Rewards Program.[6] On December 23, 2015, the Sheriff issued a "Notice of Delinquent Taxes - Formal Assessment" to AMC for each of its Jefferson Parish theater locations, noting the amount of taxes due and notifying AMC that it had thirty calendar days from the date of the notice to appeal to the Board of Tax Appeals for redetermination of the assessments.

         Thereafter, AMC filed a "Petition for Redetermination of Formal Assessment" with the Board of Tax Appeals, arguing that the sale of memberships in the Stubs Rewards Program does not constitute the purchase of a taxable service. Following motion practice and discovery, the parties filed cross-motions for summary judgment. After a hearing on the cross-motions for summary judgment, the Board of Tax Appeals judge rendered a written judgment on March 12, 2018 granting AMC's motion for summary judgment.[7] In his judgment, considering the cross-motions for summary judgment, the Board of Tax Appeals judge found that there was no genuine issue of material fact that the annual fees for membership in AMC's Stubs Rewards Program are not subject to Jefferson Parish sales taxes because those fees are not for the sales of tangible personal property or for sales of any taxable services. Further, there was no genuine issue of material fact that those fees are not for admissions to places of amusement, and are not for "the furnishing, for dues, fees, or other consideration, of the privilege of access to clubs or the privilege of having access to or the use of amusement, entertainment, athletic, or recreational facilities" for purposes of La. R.S. 47:301(14)(b)(i)(aa). Additionally, the Board of Tax Appeals judge found that the assessments that were issued on December 23, 2015 were made in error and no additional sales and/or use taxes, penalty, or interest was owed by AMC. This timely appeal followed.[8]

         ANALYSIS

         After an opportunity for adequate discovery, a motion for summary judgment shall be granted if the motion, memorandum, and supporting documents show that there is no genuine issue as to material fact and that the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(A)(3). A genuine issue of material fact is one as to which reasonable persons could disagree; if reasonable persons could reach only one conclusion, there is no need for trial on that issue and summary judgment is appropriate. King v. Illinois Nat. Ins. Co., 08-1491 (La. 4/3/09), 9 So.3d 780, 784.

         The burden of proof rests with the mover. Nevertheless, if the mover will not bear the burden of proof at trial on the issue that is before the court on the motion for summary judgment, the mover's burden on the motion does not require him to negate all essential elements of the adverse party's claim, action, or defense, but rather to point out to the court the absence of factual support for one or more elements essential to the adverse party's claim, action, or defense. The burden is on the adverse party to produce factual support sufficient to establish the existence of a genuine issue of material fact or that the mover is not entitled to judgment as a matter of law. La. C.C.P. art. 966(D)(1).

         Appellate courts review summary judgments de novo using the same criteria applied by trial courts to determine whether summary judgment is appropriate. Pizani v. Progressive Ins. Co., 98-225 (La.App. 5 Cir. 9/16/98), 719 So.2d 1086, 1087. A de novo review or an appeal de novo is an appeal in which the appellate court uses the trial court's record, but reviews the evidence and law without deference to the trial court's rulings. Wooley v. Lucksinger, 06-1140 (La.App. 1 Cir. 12/30/08), 14 So.3d 311, 352; Sarasino v. State through Department of Public Safety and Corrections, 16-408 (La.App. 5 Cir. 3/15/17), 215 So.3d 923, 928. The decision as to the propriety of a grant of a motion for summary judgment must be made with reference to the substantive law applicable to the case. Muller v. Carrier Corp., 07-770 (La.App. 5 Cir. 4/15/08), 984 So.2d 883, 885.

         ASSIGNMENT OF ...


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