Severance lax: Mississippi; Royalty Owners Administrative Law: Scope of Judicial Review

摘要

The School Board received royalty payments from several oil and gas leases that it executed. The lessee, Venture Oil & Gas, Inc., withheld from the payments the School District's proportionate share of oil and gas severance taxes and remitted those taxes to the State. In 2006, both the District and Venture learn of three attorney-general opinions that concluded that school districts who lease certain lands are not subject to the severance tax. Both the District and Venture request a nearly $250,000 refund from the Mississippi Department of Revenue (MDOR) for the taxes paid in prior years. In addition, the District and Venture request a refund of administrative expense taxes imposed by the State Oil & Gas Board that Venture had paid and deducted from the District's royalty payments. MDOR rejected the refund request. The State Oil & Gas Board initially granted a refund of $8,338, but later changed its position requiring school districts to pay the tax. The District appealed the MDOR decision and further requested additional refunds from royalty payments from lessees other than Venture. A second lawsuit was filed by the District against all of its lessees, including Venture which was later amended to include MDOR and the State Oil & Gas Board as defendants. The two suits were consolidated and all parties filed motions for summary judgment.