SMITH INTERNATIONAL, INC.
KIMBERLY ROBINSON, SECRETARY, LOUISIANA DEPARTMENT OF REVENUE
Appeal from the Louisiana Board of Tax Appeals State of
Louisiana Docket No. 10498 Board of Tax Appeals Members
Presiding: Judge Anthony J. "Tony" Graphia (ret.),
Chairman; Cade R. Cole, Vice-Chairman; and Frances
Miranda Y. Scroggins Antonio Ferachi Debra Morris Brian
DeJean Baton Rouge, Louisiana Counsel for Defendant/
Appellant Kimberly Robinson, Secretary, Louisiana Department
S. Angelico Cheryl M. Kornick Jeffrey P. Birdsong New
Orleans, Louisiana Counsel for Plaintiff/Appellee Smith
BEFORE: WHIPPLE, C.J., McCLENDON, HIGGINBOTHAM, CRAIN
AND LANIER JJ.
defendant, the Louisiana Department of Revenue, through its
Secretary, Kimberly Robinson (the Department), appeals a
judgment of the Louisiana Board of Tax Appeals (the Board)
that denied its exception of lack of subject matter
jurisdiction and determined that no penalties were due from
the taxpayer plaintiff, Smith International, Inc. (Smith
International). For the reasons that follow, we affirm.
AND PROCEDURAL HISTORY
International is engaged in the oil and gas equipment and
services business in the State of Louisiana. Smith
International timely filed its Louisiana corporate income and
franchise tax returns for the 2008 through 2010 tax periods.
Payment was submitted with the returns. Subsequently, the
Department conducted an audit and determined that additional
income and franchise taxes were due. Smith International
received a Notice of Assessment, dated December 22, 2016,
assessing additional corporate income and franchise tax for
the tax period of January 1, 2008, through December 31, 2010.
The Department also assessed interest and
penalties. Smith International submitted payment for
the additional income and franchise tax, as well as the
interest, as shown on the assessment. However, Smith
International did not submit payment for the penalties.
Smith International filed a timely appeal with the Board,
disputing the penalty portion of the assessment. In response,
the Department filed an exception raising the objection of
lack of subject matter jurisdiction, which was referred to a
hearing on the merits.
the hearing, the Board signed a judgment on April 10, 2018,
denying the Department's exception of lack of subject
matter jurisdiction. The Board's judgment also found that
Smith International was not liable for the penalties assessed
by the Department. The Department appealed the Board's
judgment to this court,  and assigns the following as error:
1. The Board erred by denying the lack of subject matter
jurisdiction exception filed by the Department; and
2. The Board erred by failing to hold Smith International
liable for the late payment penalty assessed under LSA-R.S.
legislature created the Board to act as an appeal board to
hear and decide disputes between a taxpayer and the State.
See LSA-R.S. 47:1401. The Board acts as a trial court in finding
facts and applying the law. St. Martin v. State,
09-0935 (La. 12/1/09), 25 So.3d 736, 740. Judicial review of
a decision of the Board must be rendered upon the record
before the Board and is limited to facts on the record and
questions of law. See Barfield v. Bolotte, 15-0847
(La.App. 1 Cir. 12/23/15), 185 So.3d 781, 785, writ
denied. 16-0307 (La. 5/13/16), 191 So.3d 1058.
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 in the entire record. Additionally,
when the assignments of error reflect that the main issue
involves a purely legal question regarding the proper
interpretation of a statute, our review is de novo
in the sense that we give no deference to the factual
findings or legal conclusions of the tribunals below. We are
free to make our own determinations of the correct legal
meaning of the appropriate statutes and render judgment on
the record. Barfield, 185 So.3d at 785.
Board has correctly applied the law and adhered to correct
procedural standards, its judgment should be affirmed absent
a clearly erroneous finding of fact. St. Martin, 25
So.3d at 740.
interpreting statutes, we begin with the well-settled premise
that taxing statutes must be strictly construed against the
taxing authority, and where a tax statute is susceptible of
more than one reasonable interpretation, the construction
favorable to the taxpayer is adopted. Cleco Evangeline,
LLC v. Louisiana Tax Com'n, 01-0561 (La.App. 1 Or.
6/22/01), 808 So.2d 740, 744, aff'd, 01-2162
(La. 4/3/02), 813 So.2d 351.
law is clear and unambiguous and its application does not
lead to absurd consequences, the law shall be applied as
written and no further interpretation may be made in search
of the intent of the legislature. LSA-C.C. art. 9. This
principle applies to tax statutes. Cleco Evangeline,
808 So.2d at 744. It is a recognized rule of statutory
construction that the court must give the words of a law
their generally prevailing meaning (except that words which
are words of art or technical terms must be given their
technical meaning). LSA-C.C. art. 11. Further, when the words
of a law are ambiguous, their meaning must be sought by
examining the context in which they occur and the text of the
law as a whole. LSA-C.C. art. 12. When the language is
susceptible of different meanings, it must be interpreted as
having the meaning that best conforms to the purpose of the
law. LSA-C.C. art. 10.
presumed that every word, sentence, or provision in the law
was intended to serve some useful purpose; that some effect
is to be given to each such provision; and that no
unnecessary words or provisions were used. The meaning of a
statute is to be interpreted by looking to all the sections
taken together so that no section, clause, sentence or word
becomes superfluous or meaningless. Cleco
Evangeline, 808 So.2d at 744.
if a statute is not clear on its face, the meaning must be
determined. Statutory interpretation is the province of the
judiciary. The paramount consideration in interpreting a
statute is ascertaining the legislature's intent and the
reasons that prompted the legislature to enact the law.
Cleco Evangeline, 808 So.2d at 744.
instant matter, the Department first contends that the Board
lacked jurisdiction over the penalty issue. It asserts that
the Board's jurisdiction for penalties is limited to the
waiver of penalties. The Department also argues that the
Board lacked jurisdiction to "redetermine" the
assessment of penalties where the taxpayer agreed with the
tax and interest found to be due following an audit.
Secondly, the Department argues that the penalties were
lawfully imposed and are due, as Smith International did not
follow the taxing laws when filing its returns and remitting
payments. In opposition, Smith International maintains that
the Board correctly found that the imposition of the
penalties in the Notice of Assessment was contrary to law
because the penalty provisions are not applicable.
Revised Statutes 47:1407 ...