Jon C. McCoy v. Christopher Graham, in his Official Capacity as the Commissioner of the Mississippi Department of Revenue

• Court: Court of Appeals of Mississippi
• Decided: March 11, 2025
• Docket: 2024-CA-00286-COA
• Status: Published

Opinion

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI

NO. 2024-CA-00286-COA

JON C. McCOY APPELLANT

v.

CHRISTOPHER GRAHAM, IN HIS OFFICIAL APPELLEE CAPACITY AS THE COMMISSIONER OF THE MISSISSIPPI DEPARTMENT OF REVENUE

DATE OF JUDGMENT: 02/07/2024 TRIAL JUDGE: HON. J. DEWAYNE THOMAS COURT FROM WHICH APPEALED: HINDS COUNTY CHANCERY COURT, FIRST JUDICIAL DISTRICT ATTORNEY FOR APPELLANT: JAMES GARY McGEE JR. ATTORNEY FOR APPELLEE: NICHOLAS ALEXANDER LOMELI NATURE OF THE CASE: CIVIL - STATE BOARDS AND AGENCIES DISPOSITION: AFFIRMED - 03/11/2025 MOTION FOR REHEARING FILED:

BEFORE BARNES, C.J., McCARTY AND ST. PÉ, JJ.

ST. PÉ, J., FOR THE COURT:

¶1. The Mississippi Department of Revenue (“DOR”) assessed Jon C. McCoy, as the sole

shareholder of United Roofing & Construction of Mississippi (“United”), over $345,000 in

tax liabilities for United’s failure to pay sales tax during two time periods between 2009 and

2016. This Court previously affirmed DOR’s assessment of sales taxes to United. See United

Roofing & Construction of MS Inc. v. Miss. Dept. of Revenue, 319 So. 3d 1164 (Miss. Ct.

App. 2020). McCoy now appeals DOR’s assessment of the sales tax liabilities to him

personally as the “responsible person” and United’s sole shareholder. McCoy argues that

DOR’s assessment of United’s unpaid sales taxes is barred by the statute of limitations, as the assessment was issued after the thirty-six-month deadline set by Mississippi Code

Annotated section 27-65-42 (Rev. 2017). He made this argument to DOR’s Board of Review,

the Mississippi Board of Tax Appeals, and the Hinds County Chancery Court, all of which

upheld DOR’s “responsible person” assessment.

¶2. After reviewing the record and arguments, we find no error and affirm.

FACTS AND PROCEDURAL HISTORY

¶3. United is a Mississippi corporation located in Brandon, and McCoy is its sole

shareholder. United Roofing, 319 So. 3d at 1166-67 (¶2). In 2013, DOR audited United for

a period from July 2009 to August 2013, which resulted in an assessment of $188,501 for

unpaid sales taxes, penalties, and interest. Id. at 1167 (¶4). In 2016, DOR conducted a second

audit on United for a period from September 2013 through April 2016; this audit resulted in

a $157,074 assessment for unpaid sales taxes, penalties, and interest. Id. at (¶6). United

appealed these assessments to DOR’s Board of Review, an internal-hearing tribunal, which

upheld the assessments. Id. at 1167-68 (¶6). United then appealed those rulings to the Board

of Tax Appeals, which upheld the Board of Review’s orders. Id. United appealed those

rulings to the Rankin County Chancery Court, where the two appeals were consolidated. Id.

at (¶7).

¶4. After motions and a hearing, the chancery court granted summary judgment in favor

of DOR, finding that United had been properly assessed $422,611 for both audit periods,

with interest beginning to accrue. Id. at 1167-68 (¶7). United appealed to this Court, which

affirmed the chancery court’s finding that United’s roofing services were subject to

2 Mississippi sales taxes. Id. at 1173-74 (¶30). This Court denied United’s motion for

rehearing, and the Mississippi Supreme Court denied United’s petition for writ of certiorari.

United Roofing & Construction of MS Inc. v. Miss. Dept. of Revenue, No. 2019-CT-00570-

COA (Miss. Jun. 15, 2021) (order denying writ of certiorari). The mandate was issued from

this Court on July 6, 2021.

¶5. On January 10, 2022, DOR issued a responsible person assessment to McCoy for

United’s sales tax liabilities. See Miss. Code Ann. § 27-65-55(2) (Rev. 2017). McCoy

appealed that assessment to the Board of Review, arguing that the assessment was issued

after the thirty-six-month statute of limitations in section 27-65-42. The Board of Review

upheld the assessment, and McCoy appealed to the Mississippi Board of Tax Appeals. The

Board of Tax Appeals also upheld the assessment, finding that the tax liability became final

on July 6, 2021, after all administrative and judicial appeals had been exhausted, and

therefore the responsible person assessment was timely.

¶6. McCoy appealed to the Hinds County Chancery Court. McCoy argued that sales tax

assessments became final once DOR issued an assessment to the taxpayer and that DOR had

thirty-six months from those assessment dates to make a reasonable person assessment.1

1 “Under state and federal law, if [an organization] fails to collect and pay over [certain] taxes, penalties may be assessed against a ‘responsible person,’ which, in broad terms, means someone who exercises significant authority over the [organization’s] finances.” Donovan v. Burwell, 199 So. 3d 725, 727 n.1 (Miss. Ct. App. 2016); see also Miss. Code Ann. § 27-65-55(2). McCoy does not argue that he is not a responsible person under section 27-65-55(2). This raises the question of whether McCoy even has standing to make the statutory argument he makes here; section 27-65-55(2) also states that “[a] person being assessed under this subsection may appeal his liability under Section 27-77-5 solely regarding the issue of the ownership interest and management requirements of this subsection.” However,

3 DOR filed a motion to dismiss under Rule 12(b)(6) of the Mississippi Rules of Civil

Procedure, arguing that the plain statutory language supported the Board of Tax Appeals’

findings and that the assessments were not untimely. McCoy filed a response, asserting facts

outside the record, and DOR objected to the additional evidence. At a hearing on the motion,

the chancellor agreed to consider McCoy’s additional evidence and noted that he would treat

DOR’s motion as a motion for summary judgment rather than a Rule 12(b)(6) dismissal.2

¶7. After the hearing, the chancellor granted DOR’s motion for summary judgment. The

chancellor noted that Mississippi Code Annotated section 27-65-57 (Rev. 2017) bars DOR

from collecting unpaid sales taxes until the taxpayer has received “notice and demand” and

only “if such person has not filed a timely appeal to the board of review as provided by law.”

The chancellor also noted that Mississippi Code Annotated section 27-77-7(1) (Rev. 2017)

provided that all Board of Tax Appeals orders were final unless the taxpayer or DOR timely

appealed the decision. Finally, the chancellor went through the procedural history of

McCoy’s appeals, concluding that the appeal of the original sales tax assessment did not

become final until this Court issued its mandate on July 6, 2021. The chancellor found that

because DOR issued its responsible person assessment six months later, on January 6, 2022,

the responsible person assessment was issued within the thirty-six-months statutory period.

The chancellor therefore found no genuine issues of material fact and granted summary

as DOR has not raised this as a bar to McCoy’s claims, we decline to address it. 2 “If, on a motion to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56 . . . .” M.R.C.P. 12(b).

4 judgment in DOR’s favor.

ANALYSIS

¶8. We apply a de novo standard when reviewing a chancery court’s grant of summary

judgment. Miss. Dep’t of Revenue v. Comcast of Georgia/Virginia Inc. 300 So. 3d 532, 535

(¶12) (Miss. 2020). We review de novo all questions of law. Id. A motion for summary

judgment should be granted only when there is no genuine issue of material fact. M.R.C.P.

56(c). Although the chancellor allowed McCoy to assert facts beyond the pleadings, the

parties do not argue that this appeal presents a factual dispute. Indeed, McCoy raises only one

issue on appeal: whether the chancellor erred in interpreting the statutes to find DOR’s

assessment timely.

¶9. When interpreting statutes, we cannot read them in isolation. “It is a well-settled rule

of statutory construction that when two statutes pertain to the same subject, they must be read

together in light of legislative intent.” Lewis v. Hinds Cnty. Cir. Ct., 158 So. 3d 1117, 1123

(¶17) (Miss. 2015) (internal quotation marks omitted); see also In pari Materia, Black’s Law

Dictionary 941 (12th ed. 2024) (Latin meaning “in the same matter”; “on the same subject.”).

¶10. McCoy argues that United’s liability became final on the dates of DOR’s assessment

notices: March 20, 2015, and December 12, 2016. He claims the chancellor erred by relying

on statutes regarding DOR’s ability to collect an assessment and procedural appellate rules.

McCoy grounds his argument in statutes that establish the dates that taxes become payable

and are considered a debt to the State. He quotes, “The tax imposed by this chapter or

damages assessed or interest applied by authority of this chapter shall constitute a debt due

5 [to] the State of Mississippi from the time the tax is due until it is paid . . . , ” concluding that

the sales tax assessments became final and due “as of the date of the related assessment

notice.” Miss. Code Ann. § 27-65-41 (Rev. 2017).

¶11. He conveniently ignores the end of that statute, which provides that the debt owed to

the State is “subject to . . . the statute of limitations set forth in Section 27-65-42.” Id. That

law states that the taxes are due and must be assessed “within thirty-six (36) months from the

date the return was filed except as otherwise provided in” the responsible person statute. Id.

§ 27-65-42. The responsible person statute specifies that the thirty-six-month assessment

period owed to the “responsible person” “begin[s] to run after the liability of the corporation

or limited liability company becomes final.” Id. § 27-65-55(2).

¶12. McCoy provides no support for his conclusion that the “statutory authorities therefore

indicate that a sales tax assessment becomes ‘final’ and due to the State of Mississippi as of

the date of the related assessment notice.” But looking at other statutes in the same matter,

the law is clear about the finality of a tax liability determination.

¶13. “Any taxpayer aggrieved by an assessment of tax by the agency . . . who wishes to

contest the action of the agency” must file a written appeal to the Board of Review “within

sixty (60) days from the date the agency mailed or delivered” the assessment. Miss. Code

Ann. § 27-77-5(1) (Supp. 2020). Once the Board of Review has made its determination, the

taxpayer has sixty days to appeal that decision to the Board of Tax Appeals. Id. § 27-77-5(3).

If the taxpayer does not appeal, the Board of Review’s determination is “final and not subject

to further review by the Board of Tax Appeals or a court,” and DOR may “proceed to

6 collect” the assessment. Id. § 27-77-5(3)-(4).

¶14. If the taxpayer files a timely written appeal to the Board of Tax Appeals, and the

Board of Tax Appeals reaches a determination, then “the findings and order of the Board of

Tax Appeals . . . shall be final unless the . . . taxpayer” appeals the decision to chancery

court. Id. § 27-77-7(1). Once the chancery court has made its determination, either the

agency or the taxpayer (or both) have “the right to appeal from the order of the chancery

court to the Supreme Court as in other cases.” Id. § 27-77-7(5). A matter becomes final upon

the issuance of a mandate from either this Court or the Supreme Court. See M.R.A.P. 41; see

also City of Cleveland v. Mid-South Assoc. LLC, 94 So. 3d 1049, 1050-51 (¶5) (Miss. 2012)

(“[A]fter a final decree had been entered in [the Supreme] [C]ourt, . . . the cause was at an

end.” (quoting George v. Caldwell, 98 Miss. 820, 54 So. 316 (1911))).

¶15. Reading these statutes together illustrates that the underlying tax assessment is not

final until appellate review procedures—both administrative and judicial—have been

exhausted or rendered unavailable by the taxpayer’s failure to timely appeal. McCoy availed

himself of administrative and judicial review, which reached its final conclusion on July 6,

2021. On this date, “the cause was at an end.” The thirty-six-month clock began ticking, and

DOR filed its assessment as to McCoy on January 10, 2022, well within section 27-65-

55(2)’s requirements.

¶16. As a final matter, we note that if we were to accept McCoy’s argument that the

assessment becomes final on the day the tax assessment is made, it would undermine the

entire tax appeals process; a “responsible person” could initiate an appeal and work within

7 the appellate process to ensure the State could not assess him personally within the thirty-six-

month time frame. This cannot be the intent of our tax statutes.

CONCLUSION

¶17. We affirm the chancellor’s order granting summary judgment in DOR’s favor because

DOR filed its responsible person assessment within thirty-six months from the date United’s

tax liability became final.

¶18. AFFIRMED.

BARNES, C.J., CARLTON AND WILSON, P.JJ., WESTBROOKS, McDONALD, LAWRENCE, McCARTY, EMFINGER AND WEDDLE, JJ., CONCUR.