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Story Archives: Third Circuit upholds Vidalia sales tax; hotel owner may appeal to Supreme Court


Third Circuit upholds Vidalia sales tax; hotel owner may appeal to Supreme Court
posted Thursday, May 15th, 2008 @ 8:04 amE-mail Story E-mail Story | Print Story Print Story 
The Third Circuit Court of Appeal affirmed last week a 2007 ruling by Judge Kathy Johnson that Vidalia's occupational sales tax is constitutional.

Johnson's ruling was appealed by Comfort Suites hotel owner Virgil Jackson. The Third Circuit affirmed Johnson's ruling on May 7 in favor of the Vidalia Riverfront Development District. Johnson ruled the sales tax was constitutional in Seventh Judicial District Court on Oct. 1, 2007.

"We will take it to the Supreme Court, but I'm not going to comment until I have a chance to talk to my lawyers about the ruling," Jackson said.

Vidalia Mayor Hyram Copeland said, "We're happy with the decision and just want to move forward with it and go from there. Holiday Inn will start construction in October and along with Comfort Suites that will generate $400,000 in revenue which will help us to continue operating the Conference and Convention Center."

Jackson filed a lawsuit in August of 2007 challenging the tax, which his attorneys said in court documents amounted to taxation without representation.

Representing hotel owner Jackson and VFJ Jackson Enterprises were attorneys Joseph R. Ward Jr. of Covington and Brent S. Gore of Ferriday.

Representing the Town of Vidalia, Vidalia Riverfront Development District and the Vidalia Riverfront Authority were Baton Rouge attorneys Charlie Patin Jr. and Max Kees, and Vidalia city attorney Jack McLemore.

Judge J. David Painter made the ruling for the Third Circuit Court.

Jackson claimed in his suit that a six percent tax previously approved by the Legislature at the town's request is "unconstitutional in the manner in which it is being applied..."

Jackson sought a "declaratory judgment issued declaring" the tax "unconstitutional in violation of the Louisiana Constitution and the ordinance passed by the Vidalia Riverfront Development District levying a hotel occupancy tax on the hotel operated by petitioners be null and void and without legal effect," noting that "no vote of the electors residing in the District was taken prior to the enactment of the tax."

In its decision, the Court of Appeal ruled the Plaintiffs failed to meet the burden of showing "clearly and convincingly" that the statute at issue is unconstitutional based on their contentions that the Louisiana Constitution expressly prohibits a local governmental political subdivision from imposing any use or sales tax in excess of three percent. Jackson also argued that if the Legislature grants additional taxing power to a local government subdivision, any such tax must be approved by a majority of the voters in an election called for that purpose.

The Third Circuit ruling said the Constitution expressly permits the legislature to create a special districts

"Therefore we find no error in the trial court's refusal to grant a permanent injunction or in its refusal declaring La.R.S. 33:4709.1 unconstitutional," the court ruled. "For the foregoing reasons, we affirm the trial court's decision in its entirety."

Cost of the appeal were assessed to the plaintiffs.

Jackson opened the 102-room hotel in October 2002.
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