OF JUDGMENT: 08/04/2015
COUNTY CHANCERY COURT TRIAL JUDGE: HON. FRANKLIN C. McKENZIE,
ATTORNEYS FOR APPELLANT: C. TED SANDERSON, JR. LESLIE BOUNDS
CHARLES WEIL GOLDBERG, JR.
ATTORNEYS FOR APPELLEE: JAMES L. POWELL SYLVIE D. ROBINSON
RANDOLPH, P.J., KING AND BEAM, JJ.
RANDOLPH, PRESIDING JUSTICE.
After this Court held in Jones County School District v.
Mississippi Department of Revenue, 111 So.3d 588 (Miss.
2013), that a school district was not liable for oil and gas
severance taxes on royalties derived from oil and gas
production on sixteenth-section land, the Chancery Court of
Wayne County held that Wayne County School District (WCSD)
was owed interest by the Mississippi Department of Revenue
(MDOR) on its overpayment of severance taxes at the rate of
one percent (1%) per month. The chancellor determined, based
on Section 27-65-53 of the Mississippi Code, that the payment
should start on June 5, 2013, ninety days after this
Court's ruling in Jones County. Finding that the
chancellor correctly applied the statute, we affirm the
judgment of the chancery court.
OF FACTS AND PROCEEDINGS BELOW
On October 7, 2008, WCSD filed a claim for refund of
severance taxes paid to MDOR on oil and gas production from
sixteenth-section lands located within the county. WCSD
supplemented its claim on June 7, 2011, and on April 10,
2013, for a total refund claim in the amount of $2, 345, 560.
MDOR denied WCSD's initial claim for a refund, arguing
that no express exemption from taxation was provided for
school districts and sixteenth-section lands in the oil and
natural gas severance tax statutes of the Mississippi Code.
While WCSD's refund claim was pending, the Jones County
School District (JCSD) filed suit against MDOR, after it was
denied a similar refund request. On May 5, 2011, the chancery
court entered its Final Judgment, reversing MDOR's denial
of refund claims to JCSD. On March 7, 2013, this Court issued
its opinion finding that school districts were not liable for
oil and gas severance taxes on sixteenth-section royalty
interests. Jones County Sch. Dist. v. Dep't of
Revenue, 111 So.3d 588, 605 (Miss. 2013). This Court
also held that no statutes of limitation applied to the
school district's refund claims. Id. at 607.
Following this Court's holding, MDOR agreed to pay
WCSD's refund claim and began making payments in January
2014. WCSD filed its Complaint for Declaratory Judgment on
April 9, 2014, seeking interest on its refund claim at the
rate of one percent, beginning ninety days after WCSD filed
its application for refund. As of the date of this appeal,
MDOR has refunded WCSD $2, 345, 560 for oil and gas severance
taxes and $26, 927.02 in interest.
On July 22, 2014, a hearing was held on WCSD's complaint.
WCSD argued that Section 27-65-53 of the Mississippi Code
mandated that MDOR pay interest beginning ninety days after
the application for refund was filed and ending on the date
full payment was made. MDOR argued that interest would not
begin to accrue until MDOR finalized the amount of refund
owed. However, MDOR conceded that the more accurate date
would be the date that the Supreme Court made its ruling.
The chancellor held that:
the 90-day time for payment of the refund commenced on the
date that the Supreme Court determined that the tax was
unlawful. At that point in time, the Department had 90 days
to refund to the Wayne County School District the amount of