Sales Tax Articles
State Activity Update - January 2004
Retroactive Exclusion from Use Tax Unconstitutional in Louisiana?
The Louisiana Supreme Court has vacated and remanded to the trial court an appellate court's decision holding that the retroactive exclusion of sales and use tax on cellular, PCS or wireless telephones and their accessories provided in conjunction with the sale of telecommunications service was unconstitutional.
The Louisiana Court of Appeal originally held that a retroactive exclusion from use tax was unconstitutional because it retroactively eliminated the sales or use tax owed by cellular, PCS or wireless dealers in violation of Article VII, Section 15 of the Louisiana Constitution. Article VII, Section 15 provides that the legislature may not release or extinguish any indebtedness, liability or obligation of a corporation or individual to the state, a parish or a municipality.
The retroactive exclusion was enacted by the Legislature after the parties had perfected the appeal in the court of appeal, but prior to oral arguments. Louisiana law requires that liti-gants must raise constitutional issues in the trial court and not in the appellate court. The constitutional challenge must be specifically pleaded and the grounds for that challenge identified. The Tax Collector raised the issue of unconstitutionality in an appellate brief and not in a pleading. The case was remanded to properly raise the issue regarding the statute's constitutionality before the trial court.
A dissenting opinion stated that the constitutional issue was thoroughly briefed and argued in front of both the court of appeal and the supreme court, and was now ripe for resolution.
(Unwired Telecomm Corp., v Parish of Calcasieu, Louisiana Supreme Court, Docket No. 03-CA-0732, De-cided 12/12/03.) 01/04
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