Opinion ID: 1663452
Heading Depth: 2
Heading Rank: 3

Heading: Occupational License Taxes

Text: The Revised Statutes permit local municipalities and parishes to impose occupational license taxes on all businesses within their jurisdiction. See La.Rev.Stat. § 47:341(A). The amount of the tax is based on the type of business being conducted and the level of gross sales generated by the business within the preceding calendar year. The parties stipulated at trial to the amount of gross sales by Elevating Boats for all of the years in question. In contrast, the parties disputed whether Elevating Boats is a retail dealer in merchandise, services, and rentals subject to the tax of La.Rev.Stat. § 47:354 or a wholesale dealer in merchandise, service, and rentals subject to the tax of § 47:355. Under §§ 47:354 & 355, a retailer pays roughly three times as much for an occupational license tax as a wholesaler. Before addressing this issue, we must determine if any of the taxes have prescribed.
Unlike sales and use taxes, the Revised Statutes regarding occupational license taxes provide no counterpart to § 33:2718.4's interruption of the prescriptive period on the filing of a fraudulent sales and use tax return. Thus, the general provision in the Constitution controls: Taxes, except real property taxes, and licenses shall prescribe in three years after the thirty-first day of December in the year in which they are due, but prescription may be interrupted or suspended as provided by law. La. Const. art. VII, § 16. According to La.Rev.Stat. § 47:343, the occupational license taxes are due on January 1st of every year and are considered delinquent if not paid by the last day of February in the year due. Thus, the prescriptive period on occupational license taxes is just one day short of four years (i.e. taxes due January 1, 1995 prescribe on December 31, 1998). The Rule for Taxes covered years 1991-1994 and the occupational license taxes for the earliest year in that Rule, 1991, were due on January 1, 1991 and set to prescribe on December 31, 1994. Thus, the occupational license taxes sought in that Rule were not prescribed when the Rule was filed on December 30, 1994. The assessment on June 13, 1995 of the occupational license taxes was for the tax years 1988 to 1990. [22] Occupational license taxes for the latest year in the assessment, 1990, were due on January 1, 1990 and set to prescribe on December 31, 1993. Thus, unless prescription has been interrupted or suspended, the occupational license taxes for the years 1988 to 1990 were prescribed when the assessment was made on June 13, 1995. As pointed out above, there is no counterpart to La.Rev.Stat. § 33:2718.4 regarding occupational license taxes. Thus, the three year prescriptive period in the Constitution applies and the occupational license taxes for the tax years 1988 to 1990 are prescribed. We now turn to the dispute regarding the amount of the occupational license tax for the four unprescribed years: 1991, 1992, 1993, and 1994.
The amount of the delinquent occupational license taxes depends upon whether Elevating Boats is a retailer (the district court's finding) or a wholesaler (the court of appeal's finding). Retail dealers in merchandise, services, and rentals include: [b]usinesses engaged in leasing, renting, or licensing the use of movable property, [r]epair businesses, [r]etail dealers in boats, and [t]ransportation businesses among others. See La.Rev.Stat. § 47:354(B)(28), (41), (43), & (58). On the other hand, a wholesale dealer in merchandise, services, or rentals is any person who sells [merchandise, services, or rentals] to other dealers who in turn resell and includes retail or wholesale dealers in building materials and shipbuilders among others. See La.Rev.Stat. §§ 47:342(12), 355(B)(1). Finally, the occupational license tax must be based on the type of business activity which constitutes the major portion of the gross receipts, fees, or commission of the business. See La.Rev.Stat. § 47:347; see also id. at § 47:346. At trial, the Sheriffs expert witness in accounting and auditing, James J. Hand, III, a certified public accountant, testified that he determined that Elevating Boats was a retailer pursuant to La.Rev.Stat. § 47:354. Primarily, he based this conclusion on the fact that Nettie Dean identified Elevating Boats as a retailer in the occupational license application filed in St. Bernard Parish in August of 1994. Further, he noted that Elevating Boats's chief business is the rental of boats, which is a retail activity under § 47:354. Therefore, he concluded that Elevating Boats was a retailer. On the other hand, Ray Ladouceur, also a certified public accountant, was called by Elevating Boats as an expert witness in accounting and occupational license tax matters. Ladouceur testified that Elevating Boats is a wholesaler pursuant to La. Rev.Stat. § 47:355 based upon his discussions with Doug Dean. Specifically, Dean conveyed to him that Elevating Boats's primary business activity was the building of ships, a business specifically described as a wholesaler's activity in § 47:355. Further, Ladouceur noted that his understanding of the business was that its rental activity involved renting boats to entities that, in turn, rented them to other individuals or companies. Thus, he concluded that Elevating Boats was a wholesaler. Hilton T. Ponthier, a certified public accountant called by Elevating Boats to testify regarding the fixed asset additions portion of this case, testified on cross examination regarding Elevating Boats's business activities. Specifically, Ponthier, Elevating Boats's own witness, admitted that his examination of the records of Elevating Boats led him to conclude that over half of Elevating Boats's income is derived from the leasing or renting of elevating boats. The renting of movable property is an activity of a retailer under La.Rev.Stat. § 47:354. Based on the testimony of the three experts, the district court concluded that Elevating Boats was a retailer pursuant to La.Rev.Stat. § 47:354. The determination of whether or not Elevating Boats is a wholesaler or a retailer is a mixed question of law and fact, and the district court's ruling is entitled to deference by the appellate courts. See Carbon v. Allstate Ins. Co., 97-3085, p. 10 n. 3 (La.10/20/98), 719 So.2d 437, 442 n. 3; Boykin v. Louisiana Transit Co., 96-1932, p. 11 (La.3/4/98), 707 So.2d 1225, 1231. The testimony and exhibits at trial support the finding of the district court that Elevating Boats is a retailer subject to the tax of La.Rev.Stat. § 47:354; thus, we find no manifest error in the trial judge's conclusion in this regard. Therefore, we reinstate the trial court's judgment. [23]