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Fuller, Wallace Score Victory in Court of Appeals

Louis Fuller and Katie Wallace represented Equifax, Inc. and Equifax Credit Information Services, Inc., in a Mississippi income tax case recently decided by the Mississippi Court of Appeals.  The taxpayer had appealed an assessment of income tax based upon the application by the Mississippi State Tax Commission (now Department of Revenue) of an alternative method of apportionment to determine the taxpayer’s Mississippi taxable income.  The Chancery Court upheld the assessment on the grounds that the taxpayer had not shown that the Commission’s final ruling was “arbitrary and capricious”.  In a case of first impression involving the recently-amended statute that governs all tax appeals in Mississippi,  the Appeals Court in a 9-1 decision reversed and remanded the case to the Chancery Court, ruling that under the provisions of the applicable statutes, judicial appeals of administrative decisions of the Department of Revenue are tried de novo and that the case must be decided by a preponderance of the evidence. With respect to a separate issue, also one of first impression, the Appeals Court also ruled that the Department bore the burden of proving that alternative apportionment was proper.  This case has sparked nationwide interest and amicus briefs were filed by the Institute of Professionals in Taxation on behalf of the taxpayer and the Multistate Tax Commission on behalf of the Department of Revenue.

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