Boise Cascade Corporation, Appellant v. Director of Revenue, Respondent.

This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court. Opinion

Case Style: Boise Cascade Corporation, Appellant v. Director of Revenue, Respondent. Case Number: SC83869 Handdown Date: 02/26/2002 Appeal From: Petition for Review of a Decision of the Administrative Hearing Commission, Hon. Sharon Busch Counsel for Appellant: Michael R. Annis, Janette M. Lohman and Eric G. Enlow Counsel for Respondent: James R. Layton Opinion Summary: Since its inception in 1973, section 143.431, RSMo, required that an affiliated group of corporations had to file a consolidated federal income tax return and derive at least 50 percent or more of its income within Missouri to qualify to file a consolidated Missouri income tax return. Because neither Boise Cascade Corporation nor any of its subsidiaries reached this income threshold, they filed separate state income tax returns for the tax years 1995 through 1997. Then, in General Motors Corp. v. Dir. of Revenue, 981 S.W.2d 561 (Mo. banc 1998), this Court severed the income threshold requirement from section 143.431.1(3), finding it violated the Commerce Clause. Boise Cascade subsequently filed amended state tax returns for the 1995 through 1997, claiming refunds for each of those years. Both the director of revenue and then the administrative hearing commission denied the claims. Boise Cascade appeals. REVERSED AND REMANDED. Court en banc holds: Federal due process requires states to offer taxpayers procedural safeguards against unlawful exactions, which they may do by offering taxpayers a pre- or post-deprivation remedy or both. Missouri law purports to offer both alternatives for contesting the validity of a tax. Due process also requires taxpayers to be afforded a meaningful opportunity to secure relief for taxes already paid pursuant to a tax scheme that has been found unconstitutional. Because this Court's holding in General Motors must be applied retroactively to similarly situated litigants, Boise Cascade must be afforded some sort of remedy. In this circumstance, however, neither the state's pre- and

post-deprivation remedies pass constitutional muster. Because the state failed to make available a meaningful pre- or post-deprivation remedy for its unlawful collection of income taxes under section 143.431.1, this case is remanded for recalculation of tax liability under the amended consolidated returns Boise Cascade filed. Citation: Opinion Author: PER CURIAM Opinion Vote: REVERSED AND REMANDED. All concur. Opinion: Boise Cascade Corporation, the parent of an affiliated group of corporations collectively referred to as Boise Cascade Group, seeks review of a decision of the Administrative Hearing Commission affirming the Director of Revenue's denial of three applications for a refund of income taxes paid by Boise Cascade, Boise Cascade Office Products Corporation, and BCT, Inc. as separate companies for the years 1995 and 1996, and in conjunction with another Boise Cascade subsidiary, OAPI, Inc., for 1997. The separate companies of Boise Cascade Group paid these taxes on a separate return due to a statutory provision restricting consolidated filings, which this Court found unconstitutional in General Motors Corp. v. Director of Revenue, 981 S.W.2d 561 (Mo. banc 1998). Because resolution of the issues involves the construction of revenue laws, this Court has jurisdiction. Mo. Const. art. V, sec. 3. For the same reasons set out in Eddie Bauer, Inc. v. Dir. of Revenue, __ S.W.3d __ (Mo. banc 2002) (No. SC83870, handed down this day), the decision of the AHC is reversed and remanded for recalculation of income tax liability for the amended consolidated returns of Boise Cascade Group. All concur. Separate Opinion: None This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court.