Nucor Steel Louisiana, LLC Versus St. James Parish School Board and Neshelle Nogess in Her Capacity as Tax Administrator of St. James Parish Tax Agency

CourtLouisiana Court of Appeal
DecidedNovember 5, 2021
Docket20-CA-247
StatusUnknown

This text of Nucor Steel Louisiana, LLC Versus St. James Parish School Board and Neshelle Nogess in Her Capacity as Tax Administrator of St. James Parish Tax Agency (Nucor Steel Louisiana, LLC Versus St. James Parish School Board and Neshelle Nogess in Her Capacity as Tax Administrator of St. James Parish Tax Agency) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Nucor Steel Louisiana, LLC Versus St. James Parish School Board and Neshelle Nogess in Her Capacity as Tax Administrator of St. James Parish Tax Agency, (La. Ct. App. 2021).

Opinion

NUCOR STEEL LOUISIANA, LLC NO. 20-CA-247

VERSUS FIFTH CIRCUIT

ST. JAMES PARISH SCHOOL BOARD AND COURT OF APPEAL NESHELLE NOGESS IN HER CAPACITY AS TAX ADMINISTRATOR OF ST. JAMES STATE OF LOUISIANA PARISH TAX AGENCY

ON APPEAL FROM THE BOARD OF TAX APPEALS STATE OF LOUISIANA NO. L00560

November 05, 2021

STEPHEN J. WINDHORST JUDGE

Panel composed of Judges Susan M. Chehardy, Stephen J. Windhorst, and John J. Molaison, Jr.

REVERSED AND REMANDED SJW SMC JJM COUNSEL FOR PLAINTIFF/APPELLANT, NUCOR STEEL LOUISIANA, LLC Jesse R. Adams, III Camanda J. Fergus

COUNSEL FOR DEFENDANT/APPELLEE, ST. JAMES PARISH SCHOOL BOARD AND NESHELLE NOGESS IN HER CAPACITY AS TAX ADMINISTRATOR OF ST. JAMES PARISH TAX AGENCY Drew M. Talbot WINDHORST, J.

Plaintiff/appellant, Nucor Steel Louisiana, LLC (“Nucor” or “appellant”),

appeals the judgment from the Louisiana Board of Tax Appeals (the “BTA”),

granting the exception of prescription filed by defendants/appellees, St. James Parish

School Board and Neshelle Nogess in her capacity as Tax Administrator of St. James

Parish Tax Agency (collectively the “Collector”). For the reasons stated below, we

reverse the BTA’s judgment granting the exception of prescription, deny that

exception, and remand for further proceedings.

FACTS and PROCEDURAL HISTORY

This appeal involves a substantial tax refund claim by Nucor, a direct-reduced

iron (“DRI”) manufacturing facility in St. James Parish. In the course of

constructing its manufacturing facility, Nucor contracted with HYL Technology

S.A. de C.V., Tenova S.P.A., and Tenova Core (collectively, “HYL”) for the design,

engineering and manufacture of a major component of its facility. Soon after

operations began, Nucor experienced production issues with part of the equipment

purchased from HYL, specifically the “Process Gas Heater” (the “PGH”), and, in

November 2014, a portion of the PGH failed. After an investigation, the PGH’s

design was found to be inadequate. As a result, HYL agreed to rebate certain “back

charges” related to the repair and reengineering of the PGH and other components

of the DRI system to Nucor.1 Given the rebate, Nucor paid HYL a total amount of

$183,338,125.05 as opposed to the “contract price” of $197,360,000.00 for the

equipment.

Pursuant to a “direct pay permit” with the Collector, Nucor had accrued and

remitted sales and use tax to the Collector based upon the full contract price with

HYL.2 Because the total payments actually made by Nucor to HYL were less than

1 This agreement was memorialized in a Settlement and Release Agreement on May 29, 2015.

20-CA-247 1 the contract price, Nucor submitted a refund claim for $821,091.61 on January 26,

2016, asserting (1) an overpayment due to Nucor’s calculation of the tax due for the

HYL purchases; (2) a refund based upon the allowance for defective equipment

agreed to by HYL in its reduction of the purchase price rebated to Nucor (“HYL

Claim”); and (3) Nucor’s purchase of hydrated lime used as a material for further

processing in Nucor’s manufacturing facility.

On April 13, 2016, the Collector acknowledged receipt of the refund claim by

letter and requested additional documentation from Nucor. In May 2016, the

Collector refunded the portion of the refund claim related to hydrated lime. Over

the next several months, Nucor provided additional data to the Collector regarding

the refund claim and the ongoing audit. The refund claim sought the refund of sales

tax paid on the June 2012 through October 2013 sales and use tax returns. The

Collector reviewed the invoices for this period as part of its audit. Throughout the

period of the review, Nucor and the Collector entered into several “Agreement to

Suspend Prescription of Taxes” that applied through October 15, 2017.3

The Collector prepared timelines dated September 14, 2016 and November

17, 2016 regarding the audit, which reflect that the Collector was diligently working

with Nucor in reviewing the refund claim. This included requesting data, hiring

outside counsel, reviewing invoices and contracts, touring the Nucor Facility,

issuing a refund determination letter (wherein she outlined all of the actions she had

taken, her legal basis for denying the claim and outlining Nucor’s appeals rights),

holding a redetermination hearing, and ultimately confirming her decision to deny

the refund claim.

2 A “direct pay permit” allows the Louisiana Department of Revenue to authorize certain sales tax dealers to pay directly to the Department. Qualifying entities will be issued a direct pay permit to provide to their suppliers instead of paying sales tax on authorized purchases or leases. 3 The last “Agreement to Suspend Prescription of Taxes” suspended the running of the period of prescription against the assessment and collection of any sales or use taxes, interest and/or penalties due and owing, and any claim for refund by Taxpayer against Collector for the year(s) January l, 2011 through December 31, 2013 until October 15, 2017.

20-CA-247 2 Appellant’s brief, pp. 5-15, contains a complete detailed factual chronology

of the interaction between Nucor and the Collector related to the claim and the

evaluation process from the beginning through the appeal and decision of the BTA.

Its accuracy is supported by the record. We also take note of Ms. Nogess’ estimable

qualifications, and that at all times pertinent, she had legal counsel.

On July 26, 2017, the Collector toured Nucor’s facility, and in an email dated

the next day, the Collector stated that the tour provided perspective on critically

important facts relevant to the legal issues that will help them make determinations

on Nucor’s refund claim. In August, the parties negotiated a confidentiality

agreement related to Nucor providing the Collector with the Settlement Agreement

with HYL and other confidential data. That month, Nucor provided the Collector

with warranty information, a detailed breakdown of the rebate, and other information

regarding the HYL claim.

In September 2017, Nucor provided the Collector with a full copy of the

Settlement Agreement with HYL, as HYL finally agreed to a full disclosure of the

Agreement. The Collector also issued a “preliminary report” which indicated that

two portions of the refund claim were still in progress. Following this report, Nucor

and the Collector continued to exchange information. In October 2017, Nucor

resubmitted its refund claim. The Collector continued to correspond with Nucor

through February 2018 regarding different aspects of the refund claim and finally

made a determination. The record contains correspondence between the parties

during this period discussing issues related to the refund claim, indicating the

Collector was meeting with outside counsel to assist in her consideration of the

refund claim, and requesting additional information.

The Collector finally sent Nucor a refund claim determination letter, denying

Nucor’s refund claim on February 23, 2018. In the letter, the Collector set forth the

various actions the Collector took in considering the refund claim. The Collector

20-CA-247 3 also informed Nucor of its right to seek reconsideration or redetermination, and/or

to appeal the denial of the refund claim. Specifically, the Collector stated the

following:

Should Nucor disagree with or dispute the Collector’s final determination, pursuant to La. R.S.

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Nucor Steel Louisiana, LLC Versus St. James Parish School Board and Neshelle Nogess in Her Capacity as Tax Administrator of St. James Parish Tax Agency, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nucor-steel-louisiana-llc-versus-st-james-parish-school-board-and-lactapp-2021.