Court Opinion

ID: 9605627
Source: CourtListenerOpinion
Date Created: 2023-08-22 02:39:26.829326+00
Date Added: 2024-06-11T18:02:29.057167
License: Public Domain

*342Justice Frye
concurring in result.
In two cases, Bailey v. State, 330 N.C. 227, 412 S.E.2d 295 (1991) (Bailey I), cert. denied, 504 U.S. 911, 118 L. Ed. 2d 547 (1992), and Swanson v. State, 335 N.C. 674, 441 S.E.2d 537, cert. denied, 513 U.S. 1056, 130 L. Ed. 2d 598 (1994), this Court held that the protest requirements of N.C.G.S. § 105-267 were valid and enforceable, In Bailey v. State, 348 N.C. 130, 500 S.E.2d 54 (1998) (Bailey II), we held that certain taxpayers were entitled to refunds notwithstanding their failure to comply with the protest requirements of N.C.G.S. § 105-267. This was so, the majority there said, because “the purpose underlying the requirements of section 105-267 is to put the State on notice that a tax, or a particular application thereof, is being challenged as improper so that the State might properly budget or plan for the potential that certain revenues derived from such tax have to be refunded.” Bailey II, 348 N.C. at 166, 500 S.E.2d at 75.
Likewise, in the instant case, the State was put on notice by the filing of a lawsuit challenging the constitutionality of the intangibles tax levied on corporate stock and by the refund demands made pursuant to N.C.G.S. § 105-267 by the plaintiffs designated as Class A. Thus, in this case, as in Bailey II, the State had notice of the possibility that the tax, or a portion thereof, would be declared unconstitutional and had the opportunity to plan and budget for potential refunds. In fact, the United States Supreme Court held that “North Carolina’s intangibles tax facially discriminates against interstate commerce,” Fulton Corp. v. Faulkner, 516 U.S. 325, 346, 133 L. Ed. 2d 796, 814 (1996), and this Court, on remand, held that “the unconstitutional part of N.C.G.S. § 105-203 must be severed,” Fulton Corp. v. Faulkner, 345 N.C. 419, 424, 481 S.E.2d 8, 11 (1997). Therefore, I would hold that the reasoning of Bailey II applies to the Class B plaintiffs in this case, entitling them to a refund of the taxes paid under the unconstitutional intangibles tax scheme, notwithstanding their failure to follow the protest requirements of N.C.G.S. § 105-267.
Accordingly, for the reasons stated herein and not for the reasons stated in the majority opinion, I concur in the result reached by the Court.
Justice Whichard joins in this concurring opinion.