The Lafayette Parish School Board has suffered another legal setback at the hands of the Third Circuit Court of Appeal, which ruled this week that a Lafayette entrepreneur whose restaurant went out of business is not personally liable for sales taxes the business failed to pay to the school system.
In the case of Lafayette Parish School Board versus Reginald Simmons, et al, the appeals court reversed a lower court ruling awarding the board a $12,468 judgement against Simmons, whose company, AJS Investments, LLC, operated the Original Italian Pie in Lafayette. The restaurant opened in October 2007. AJS Investments filed for bankruptcy in February 2008 and the restaurant closed in April 2008.
Court documents show that the restaurant did not pay sales taxes to the school board during the time it was open. However, the Third Circuit ruled that the school board failed to meet the benchmarks for proving that Simmons was personally responsible for the business’ tax liability: “Considering that taxing statutes are strictly construed against the taxing authority, we do not find, under the facts of this case, that the School Board met its burden of showing the taxes were collected and willfully not remitted. Therefore, the trial court’s judgment in favor of the School Board is reversed,” Judge Sylvia R. Cooks writes in the ruling
The loss is the most recent of three defeats for the school board at the appellate level this year. In February, the Third Circuit reversed a lower court ruling
and ordered the board to return more than $443,000 in use taxes assessed to Scientific Drilling International Inc. for equipment stored in Lafayette Parish but not used in the parish. Scientific had paid the taxes under protest and appealed to the Third Circuit.
Also in February, the appeals court released a judgment upholding a lower court ruling
finding that the board cannot sue an architectural firm for water intrusion problems at N.P. Moss Middle School.