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SEPTEMBER 04, 1985




This appeal arises out of a more than ten year old effort on the part of DeSoto County, Mississippi, to make a real estate developer pay its taxes. By virtue of the enactment of Senate Bill No. 1846, Laws of Mississippi, 1972, now codified in Miss. Code Ann. 37-57-113, et seq., (Supp. 1984), the state has authorized imposition of a school building tax upon the construction and sale of new dwellings. As one engaged in the construction of new dwellings or apartments in DeSoto County from time to time, W. H. Hopper & Associates, Inc. was subject to the new tax and brought an action in the Chancery Court of DeSoto County, Mississippi challenging the constitutionality of the enforcement of the tax against it. That matter was ultimately presented to this Court which, via an opinion not designated for publication, upheld the constitutionality of the taxing enactment and rejected Hopper's appeal. See W. H. Hopper & Associates, Inc. v. McElroy, 385 So. 2d 1305 (Miss. No. 51,932, decided July 23, 1980).

On July 7, 1981 - approximately a year following the termination of the constitutionality litigation, DeSoto County, Mississippi brought this action in the County Court of DeSoto County. The complaint named the Hopper corporation and Maryland Casualty Company, its surety, as defendants and sought recovery of school building taxes owed in the amount of $5,000.00 plus interest from March 12, 1974. Hopper *fn1 and its surety answered and in due course the matter was litigated before the County Court which on November 30, 1982, entered final judgment in favor of Hopper and Maryland Casualty and against DeSoto County on grounds that the County had failed to meet its burden of proof with respect to the taxes claimed to be owed.

 Thereafter, DeSoto County perfected an appeal to the Circuit Court of DeSoto County which received written briefs and oral arguments from all parties. The Circuit Court held that the County Court had incorrectly placed the burden of proof on the County and thereupon reversed and entered

 judgment finally in favor of DeSoto County and against Hopper and its surety in the amount of $5,000.00 plus interest from March 17, 1974, plus costs. This order was entered May 6, 1983. The Hopper corporation now appeals to this Court. *fn2

 Miss. Code Ann. 37-57-113 (Supp. 1984) empowers the board of supervisors of certain counties to impose an excise or transfer tax upon the sale or construction of all new family units with the proceeds of the tax to go for capital improvements of the public schools. By resolution the Board of Supervisors of DeSoto County imposed the tax.

 In practice, DeSoto County offered persons subject to the tax two options with respect to time of payment. The taxpayer could pay at the time the building permit was obtained, or, if the taxpayer wished to defer payment, he could do so by filing a bond with a good and sufficient surety guaranteeing payment of the tax. This latter alternative allowed developers such as Hopper the convenience of not having to pay the tax until they completed the sale of the new dwelling units and actually got their sale proceeds in hand.

 On March 12, 1974, the Hopper corporation filed with the County a school building tax payment bond in the amount of $5,000.00 with respect to which it was principal and Maryland Casualty Company was surety. The condition of the bond - which is of some significance in the determination of this action - is as follows:

 THE CONDITION of the above obligation is such that the above bounden Principal constructs dwelling houses or apartments in DeSoto County from time to time, and as a result owes the tax imposed by DeSoto County on May 3, 1972 under authority of Senate Bill 1846, Laws of Mississippi of 1972, sometimes referred to as the School Building Tax, and the Principal has requested the privilege of the deferring payment of the tax until final inspection or occupancy of the dwelling unit, whichever occurs first, and the County has consented to the deferment provided the Principal make bond for the tax. This bond secures to the County all taxes, and penalties due by the Principal to the County under said law and is in the estimated maximum sum that will be due the County at any one time. In the event the Principal is found to owe more tax than

 covered by this Bond, the County may require an additional or supplemental bond, and in such case, the liability of the surety will be pro-rated with sureties on such other bonds. This Bond shall remain in effect until cancelled in writing, and the liability of the surety shall terminate when all taxes due at the time of cancellation have been paid.

 DeSoto County has now called upon the Hopper corporation and its surety for payment of the $5,000.00 which payment has not only been declined but resisted mightily.

 A few preliminary comments regarding the burden of proof are required. We have little if any authority directed to the point in a taxation context and, perhaps not surprisingly, the County and Circuit Judges differed regarding their understanding of the burden of proof in such cases. In an action to recover taxes allegedly due and unpaid, any local taxing authority - a county, municipality, special taxing district, or whatever - shall have the burden of proof. Board of Supervisors of Warren County v. Craig, ___ Miss. ___, 29 So. 821 (1901); 84 C.J.S. Taxation 711, p. 1393. Before the taxing authority may recover judgment against the taxpayer, all factual prerequisites to the existence of the obligation on the part of the taxpayer to pay the tax must be proved by the taxing authority by a preponderance of the evidence. Put otherwise, the trier of the facts is required, before final judgment can be entered in favor of the taxing authority, to find by a preponderance of the evidence the existence of all facts prerequisite to imposition of the obligation to pay the tax.

 In reviewing this matter, we note that the County Court correctly held that this burden of proof was incumbent upon DeSoto County as the plaintiff/taxing authority. That Court held that the evidence offered by the County was insufficient as a matter of law to sustain the County's burden of proof. The Circuit Court on appeal was required to review any such factual determinations under our familiar substantial evidence rule, and we are subject to a similarly limited scope of review as the matter now stands. Davis v. Clement, 468 So. 2d 58, ...

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