Louisiana Record

Wednesday, February 26, 2020

1st Circuit Court of Appeal court affirms 'oceangoing barge' tax ruling

By David Hutton | Feb 3, 2018

General court 06

BATON ROUGE — The Louisiana 1st Circuit Court of Appeal has upheld a lower court ruling of summary judgment and dismissal of a demand for a tax refund on certain property and rejecting a request for a new trial in a dispute over barge taxes.

The panel hearing the case included Judges Toni M. Higginbotham, Guy Holdridge and Allison Penzato, who wrote the opinion of the court.

Neeb Service LLC filed a complaint against Erroll G. Williams, Orleans Parish assessor, and Norman Foster, finance director for the city of New Orleans, in an effort to recover taxes it paid under protest, plus interest.

Neeb Service appealed the decision of the 19th Judicial District Court granting summary judgment and dismissing its petition for refund of ad valorem taxes -- those paid on the value of a property -- paid under protest and a judgment denying Neeb's motion for new trial and taxing it with all costs.

Neeb owns Captain Jim, a floating crane barge used to transfer cargo between river barges and oceangoing vessels.

At the end of 2014, the company received a 2015 business personal property tax bill for the Captain Jim from New Orleans' Treasury Bureau.

The company paid the assessed tax of $48,945.14, according to court records. It included a letter to the city stating it paid the taxes under protest, claiming the vessel is exempt from ad valorem taxation.

According to court records, Williams filed a motion for summary judgment, maintaining that the Captain Jim doesn’t qualify for the ad valorem tax exemption under Louisiana state law because it isn’t "an oceangoing barge.”

Neeb requested written reasons and also filed a motion for a new trial, to which Williams opposed.

The assessor then filed a motion to impose court costs.

On April 10, the trial court denied Neeb’s motion for a new trial and ordered the company to be taxed with the assessor’s deferred costs.

On appeal, Neeb argued the trial court erred when it ruled a barge must be “oceangoing” to be exempt from the ad valorem taxes under state law.

Neeb further argued that it was this error that led the trial court to grant summary judgment to Williams.

Penzato wrote that a key issue in the case is the proper interpretation of La. Const. Art.7, Sec. 21(C)(l6).

In part, it states that “ships and oceangoing tugs, towboats, and barges engaged in international trade and domiciled in Louisiana ports” shall be exempt from ad valorem taxation.

Moreover, it states the exemption “shall not apply to harbor, wharf, shed, and other port dues or to any vessel operated in the coastal trade of the states of the United States.”

The court wasn’t swayed by Neeb’s argument that the trial court erred when it ruled a barge must be “oceangoing.”

"Accordingly,  based upon the language of the statute, as well as the legislative history, we construe the word "oceangoing" to modify all three nouns that follow, namely, ‘tugs, towboats, and barges,’” Penzato wrote. “Thus, we find that a barge must be oceangoing to be exempt from ad valorem taxes under La. Const. Art. 7, Sec. 21(C)(l6).”

Moreover, the assessor met his burden of proof by pointing out that Neeb was wrong in claiming that Captain Jim was an oceangoing barge. As a result, there was no error in granting summary judgment, the court said.

“Since the record demonstrates that there are no genuine issues of material fact and that assessor is entitled to judgment as a matter of law, the summary judgment was properly granted,” Penzato concluded. “Therefore, we affirm the Dec. 21, 2016 judgment of the trial court.”

The court also ordered that Neeb pay the costs of the appeal.  

In a concurring opinion, Holdridge noted he didn’t agree that a vessel had to have spent actual time in the ocean for it to be exempt from taxation for the taxable year.

“To be exempt, the tugs, tow-boats and barges only have to be capable of being ‘ocean-going’ like a ship,” Holdridge wrote. “However, in this case, I agree that the plaintiff failed to produce evidence to create a genuine issue of fact that the Captain Jim was an 'ocean-going barge’ that is, a barge capable of being used in the ocean.”

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Louisiana First Circuit Court of Appeal