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Inc. v. Foster

Court of Appeals of Louisiana, Fourth Circuit

September 25, 2019

AARON'S, INC.
v.
NORMAN S. FOSTER, DIRECTOR OF FINANCE AND EX-OFFICIO TAX COLLECTOR OF ORLEANS PARISH; ERROL G. WILLIAMS, ASSESSOR FOR ORLEANS PARISH; AND THE LOUISIANA TAX COMMISSION

          APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2017-01063, DIVISION "F" HONORABLE CHRISTOPHER J. BRUNO, JUDGE

          JOHN W. COLBERT JUSTIN P. LEMAIRE STONE PIGMAN WALTHER WITTMANN L.L.C. COUNSEL FOR PLAINTIFF/APPELLANT, AARON'S, INC.

          JOHN J. WEILER CHRISTIAN N. WEILER REESE F. WILLIAMSON WEILER & REES, LLC COUNSEL FOR DEFENDANT/APPELLEE, ERROLL G. WILLIAMS, ASSESSOR FOR ORLEANS PARISH

          BRIAN A. EDDINGTON COUNSEL FOR AMICUS CURIAE, THE LOUISIANA ASSESSORS' ASSOCIATION

          Court composed of Judge Terri F. Love, Judge Rosemary Ledet, Judge Dale N. Atkins

          JUDGE TERRI F. LOVE JUDGE.

         This appeal arises from the plaintiff's payment of ad valorem taxes under protest. Plaintiff operates stores in the lease-to-own personal property business. Plaintiff claimed an exemption from the Orleans Parish ad valorem taxes because the personal property was being used in the homes of its customers. Plaintiff and the tax assessor filed motions for summary judgment, contending each was entitled to judgment as a matter of law. The trial court granted the tax assessor's motion for summary judgment, finding that no exemption applied to the plaintiff.

         We do not find that plaintiff proved that an ad valorem tax exemption was provided for by the Louisiana Constitution for its leased personal property. Art. VII, §21(C)(9) of the Louisiana Constitution applies to owners using their property in their home, as opposed to a commercial owner leasing out personal property to customers for use in their homes. Further, La. R.S. 9:3362 requires that rental-purchase agreements be treated as sales for state and local sales tax purposes, not for ad valorem tax purposes. The tax assessor's motion for summary judgment was properly granted and the judgment of the trial court is affirmed.

         FACTUAL BACKGROUND AND PROCEDURAL HISTORY

         Aaron's, Inc. ("Aaron's") is a Georgia corporation that operates fifty company-owned stores in Louisiana, which focus primarily on the rent-to-own personal property business.

         In 2017, Aaron's received two ad valorem tax bills from the City of New Orleans: 1) #207101228 - $18, 348.81 and 2) #39P232411 - $5, 383.12 for a total of: $23, 731.93. Aaron's paid the 2017 ad valorem taxes assessed by the City of New Orleans under protest. Aaron's then filed a Petition for Recovery of Ad Valorem Tax Paid Under Protest against Norman S. Foster, in his official capacity as Director of Finance and Ex-officio Tax Collector of Orleans Parish; Erroll G. Williams, in his official capacity as the Assessor for Orleans Parish; and the Louisiana Tax Commission. Aaron's contended that it paid $16, 754.32 under protest. However, Aaron's did not dispute that the remaining $6, 977.61 was owed.

         Aaron's and Assessor Williams entered into Joint Stipulations as to the type of business Aaron's conducts and attached copies of Aaron's standard lease agreement, lease order form, and a letter to Mr. Foster documenting the payment under protest to the stipulations. Aaron's then filed a Motion for Summary Judgment contending that it was entitled to judgment as a matter of law because an exemption from ad valorem taxation was clear and unambiguous. Assessor Williams also filed a Motion for Summary Judgment averring that Aaron's was not entitled to an exemption, as a matter of law. After the parties filed oppositions and replies, the trial court held a hearing wherein it stated:

. . . I think the - - it seems to me the intent of the Constitutional Article 7, Section 21 is designed to - - I know they maybe did not envision a rental - - furniture rental company at the time. Certainly it was designed to avoid taxation on my personal property of my home.
I think what you are trying to do is take advantage of that provision to apply it to a commercial lender of furniture - - commercial lender/seller of furniture to avoid paying your share of taxes; your obligation to pay your tax under inventory is what we are talking about here. That is not - - that is not what this was intended to cover.
I think that Aaron's view of the Constitution Article Section 7 [sic], 21 is a bit ambitious. I do not think that this Constitution article was designed to protect Aaron's from paying ad valorem taxes on its inventory particularly when the property remains - - particularly when Aaron's remains the owner of the property. Even though the renter can become the owner it does not necessarily happen. ...

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