If a Mississippi county failed to pay a school district its share of taxes for years, how far back can the school district claim the unpaid taxes?

Plain-English summary

The Lauderdale County Board of Supervisors discovered that it had failed for years to remit certain tax revenues to the Lauderdale County School District. Specifically, the privilege taxes, railcar taxes, and rental car taxes that under Mississippi statute should have been distributed to the District alongside ad valorem taxes weren't being distributed properly.

The District's attorney asked the AG two questions: how many years can the District seek to be paid, and is there an applicable statute of limitation?

The AG had a clean answer for the legal question and a punt on the factual one.

Legal answer: If the local governing authorities determine the District is owed prior years' taxes, "there is no limit to the number of years the School District can seek to be paid," because § 104 of the Mississippi Constitution provides: "Statutes of limitation in civil causes shall not run against the State, or any subdivision or municipal corporation thereof." The opinion notes § 15-1-51 to the same effect and cites Jones Cnty. Sch. Dist. v. Dep't of Revenue, 111 So. 3d 588, 607 (Miss. 2013), that Section 104 "applies even in a suit between governmental entities."

Factual punt: Whether the District is owed prior years' taxes, and the number of years, "are questions of fact to be made by the local governing authorities, subject to judicial review, and are outside the scope of an official opinion." The opinion stresses that under § 7-5-25 it is limited to prospective questions of state law, "cannot validate or invalidate past actions," and that the opinion "should not be interpreted as a determination that taxes are owed by Lauderdale County to the School District."

Budget reference: The opinion also draws attention to § 37-57-108, "as discussed in MS AG Op., Compton (June 21, 2019)," which opined that delinquent taxes received in the current tax year that exceed the increase limitation in § 37-57-107 "must be deposited into a special account and calculated into the budget for the succeeding fiscal year." It suggests contacting the Technical Assistance Division of the Office of the State Auditor on that point.

What this means for you

School district attorneys and boards

The opinion holds that "if the local governing authorities do, in fact, determine that the School District is owed prior years' taxes," then under § 104 "there is no limit to the number of years the School District can seek to be paid." A time-bar is not a defense the County could raise to such an intergovernmental claim.

Boards of supervisors

The opinion describes the underlying problem as a county that "failed to pay the Lauderdale County School District its share of the privilege taxes, railcar taxes, or rental car taxes." It resolves only that no statute of limitations would bar a valid claim; whether and how much is owed is left to the local boards, subject to judicial review.

What the AG did not decide

The opinion is explicit that it "cannot make the factual determination that the School District is owed prior year's taxes," that it is "limited to prospective questions of state law" under § 7-5-25, and that it "should not be interpreted as a determination that taxes are owed."

Budget mechanics

The opinion flags § 37-57-108 (per the 2019 Compton opinion): delinquent taxes received in the current year that exceed the § 37-57-107 increase limitation "must be deposited into a special account and calculated into the budget for the succeeding fiscal year." It suggests contacting the State Auditor's Technical Assistance Division on that question.

Common questions

Q: How many years of unpaid taxes can the school district claim?
A: The opinion holds that if the local authorities determine the District is owed prior years' taxes, "there is no limit to the number of years the School District can seek to be paid," because § 104 provides that statutes of limitation do not run against the state or its subdivisions.

Q: What is Section 104 of the Mississippi Constitution?
A: The opinion quotes it: "Statutes of limitation in civil causes shall not run against the State, or any subdivision or municipal corporation thereof," and notes § 15-1-51 to the same effect.

Q: Does that apply even between two governmental bodies?
A: Yes. The opinion cites Jones Cnty. Sch. Dist. v. Dep't of Revenue, in which the Mississippi Supreme Court held that Section 104 "applies even in a suit between governmental entities."

Q: Which taxes were involved?
A: The opinion identifies "property carrier and bus taxes, railcar taxes, and motor vehicle rental sales taxes," assessed under §§ 27-19-11, 27-35-501, and 27-65-231 respectively. It notes the property carrier/bus and rental sales taxes "are to be distributed by the county in the same manner as ad valorem tax proceeds" (§§ 27-19-11, 27-65-231(3)), and that railcar taxes "are apportioned between the municipalities and taxing districts within the county based on the number of miles of railroad" (§ 27-35-519).

Q: Did the AG say Lauderdale County actually owes the money?
A: No. The opinion states it "cannot make the factual determination that the School District is owed prior year's taxes" and "should not be interpreted as a determination that taxes are owed."

Background and statutory framework

The opinion arises from a discovery that the Lauderdale County Board of Supervisors "failed to pay the Lauderdale County School District its share of the privilege taxes, railcar taxes, or rental car taxes." The District asked how many years it could seek payment and whether a statute of limitation applied.

The opinion answers through § 104 of the Mississippi Constitution: "Statutes of limitation in civil causes shall not run against the State, or any subdivision or municipal corporation thereof," noting § 15-1-51 to the same effect. It relies on Jones Cnty. Sch. Dist. v. Dep't of Revenue, 111 So. 3d 588, 607 (Miss. 2013), that Section 104 "applies even in a suit between governmental entities," and concludes that "if a determination is made that taxes are owed, there is no limit to the number of years the School District can seek to be paid."

For context, the opinion identifies the three taxes and their distribution rules: property carrier and bus taxes (§ 27-19-11) and motor vehicle rental sales taxes (§ 27-65-231, distributed as ad valorem under § 27-65-231(3)), and railcar taxes (§ 27-35-501, apportioned among municipalities and taxing districts by railroad mileage under § 27-35-519). It also draws attention to § 37-57-108 and the 2019 Compton opinion regarding delinquent taxes that exceed the § 37-57-107 increase limitation, which must be placed in a special account and calculated into the next fiscal year's budget. Throughout, the opinion confines itself to the legal time-bar question, leaving the factual determination of whether taxes are owed to the local boards.

Citations and references

Constitution:

• Miss. Const. § 104 (statutes of limitation do not run against the state or political subdivisions)

Statutes:

• Miss. Code Ann. § 7-5-25 (AG opinion authority)
• Miss. Code Ann. § 15-1-51 (statutes of limitations do not run against the state)
• Miss. Code Ann. § 27-19-11 (privilege taxes on certain motor vehicles, distributed as ad valorem)
• Miss. Code Ann. § 27-35-501 (railcar taxes)
• Miss. Code Ann. § 27-35-519 (apportionment of railcar taxes)
• Miss. Code Ann. § 27-65-231 (motor vehicle rental sales tax)
• Miss. Code Ann. § 27-65-231(3) (distribution of rental sales tax as ad valorem)
• Miss. Code Ann. § 37-57-107 (school district millage cap)
• Miss. Code Ann. § 37-57-108 (handling of delinquent taxes exceeding the cap)

Cases:

• Jones Cnty. Sch. Dist. v. Dep't of Revenue, 111 So. 3d 588 (Miss. 2013) (Section 104 applies in suits between governmental entities)

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2024/02/J.Compton-February-8-2024-Payment-of-Past-Due-Taxes.pdf

Original opinion text

February 8, 2024

John G. Compton, Esq.
Attorney, Lauderdale County School District
Post Office Box 845
Meridian, Mississippi 39302-0845

Re: Payment of Past Due Taxes

Dear Mr. Compton:

The Office of the Attorney General has received your request for an official opinion.

Background

According to your request, it was recently discovered that the Lauderdale County Board of Supervisors ("Board of Supervisors") failed to pay the Lauderdale County School District ("School District") its share of the privilege taxes, railcar taxes, or rental car taxes.

Questions Presented

1. How many years can the School District seek to be paid?

2. Is there an applicable statute of limitation that would apply to seeking payment of past taxes due the School District from the Board of Supervisors?

Brief Response

While this office cannot make the factual determination that the School District is owed prior year's taxes, if such determination is made by the local governing authorities, there is no limit on the number of years the School District may seek to be paid because Section 104 of the Mississippi Constitution provides that statutes of limitation shall not run against the State or political subdivisions.

Applicable Law and Discussion

Opinions of this office are limited to prospective questions of state law. Miss. Code Ann. § 7-5-25. This office cannot not validate or invalidate past actions. Therefore, to the extent that your question deals with past action, we must decline to respond with an official opinion, and we offer no opinion on prior payments or the validity or amount of the alleged taxes owed. This opinion should not be interpreted as a determination that taxes are owed by Lauderdale County to the School District. By way of information only, we offer the following.

We understand that the taxes you reference in your request are property carrier and bus taxes, railcar taxes, and motor vehicle rental sales taxes, which are levied or assessed in accordance with Sections 27-19-11, 27-35-501, and 27-65-231 of the Mississippi Code, respectively. The property carrier and bus taxes and motor vehicle rental sales taxes are to be distributed by the county in the same manner as ad valorem tax proceeds. Miss. Code Ann. §§ 27-19-11 and 27-65-231(3). The railcar taxes are apportioned between the municipalities and taxing districts within the county based on the number of miles of railroad within the municipalities taxing districts. Miss. Code Ann. § 27-35-519.

Whether the School District is owed prior years' taxes by the County or the specific number of years the School District may be paid are questions of fact to be made by the local governing authorities, subject to judicial review, and are outside the scope of an official opinion. However, if the local governing authorities do, in fact, determine that the School District is owed prior years' taxes, Section 104 of the Mississippi Constitution provides that "[s]tatutes of limitation in civil causes shall not run against the State, or any subdivision or municipal corporation thereof." See also Miss. Code Ann. § 15-1-51 (stating same). The Mississippi Supreme Court has held that Section 104 applies even in a suit between governmental entities. Jones Cnty. Sch. Dist. v. Dep't of Revenue, 111 So. 3d 588, 607 (Miss. 2013). Therefore, if a determination is made that taxes are owed, there is no limit to the number of years the School District can seek to be paid.

We also draw your attention to Section 37-57-108 as discussed in MS AG Op., Compton (June 21, 2019) (opining that any amount of delinquent taxes received in the current tax year by the school district that exceeds the increase limitation described in Section 37-57-107 must be deposited into a special account and calculated into the budget for the succeeding fiscal year). You may wish to contact the Technical Assistance Division of the Office of the State Auditor for any questions regarding the applicability of this statute to your situation.

If this office may be of any further assistance to you, please do not hesitate to contact us.

Sincerely,

LYNN FITCH, ATTORNEY GENERAL

By: /s/ Beebe Garrard
Beebe Garrard
Special Assistant Attorney General