BYK CHEMIE USA, INC. v. COMMISSIONER OF REVENUE SERVICES,

SC 18878

Judicial District of New Britain

 Taxation; Whether General Statutes § 12-600 Required Plaintiff to Pay the Petroleum Products Gross Earnings Taxes it Owed Prior to Filing an Appeal that Challenged Defendant's Assessment of the Taxes.  The plaintiff initiated this tax appeal, challenging the defendant's assessment of petroleum products gross earnings taxes.  It alleged that the defendant's imposition of the taxes was improper because it was not liable for such taxes under the applicable state statutes.  It further alleged that the imposition of the taxes violated the commerce and due process clauses of the United States constitution.  The defendant moved to dismiss the appeal, claiming that the doctrine of sovereign immunity barred the plaintiff's claims.  It argued that, in violation of General Statutes § 12-600, the plaintiff had failed to pay the taxes that were due prior to its commencement of the appeal.  The trial court granted the motion in part and denied the motion in part.  It stated that General Statutes § 12-597, not § 12-600, is the statutory section that authorizes a taxpayer to appeal the defendant's determination regarding the imposition of the petroleum products gross earnings tax.  It determined that while § 12-597 permits any aggrieved taxpayer to appeal the defendant's decision regarding the petroleum products gross earnings tax, § 12-600 merely requires that the taxes due be paid in full before the filing of an action that challenges the statutory provisions that created the tax.  The court further opined that the relevant legislative history revealed that, in light of its concerns regarding the state budget, the legislature enacted § 12-600 to require oil companies to pay the petroleum products gross earnings tax before instituting any action to challenge the constitutionality of the enactment of the tax.  Based upon the foregoing, the court concluded that the plaintiff was required to prepay the tax only to the extent that it sought to challenge the constitutionality of the statutes that created the tax.  Accordingly, the court granted the defendant's motion to dismiss as to the plaintiff's constitutional claims, but it denied the motion as to the claims that merely alleged that the plaintiff was not subject to the tax.  In this appeal, the Supreme Court will determine whether the trial court's partial denial of the defendant's motion to dismiss was proper.