If a Mississippi county failed to pay a school district its share of taxes for years, how far back can the school district claim the unpaid taxes?
Plain-English summary
The Lauderdale County Board of Supervisors discovered that it had failed for years to remit certain tax revenues to the Lauderdale County School District. Specifically, the privilege taxes, railcar taxes, and rental car taxes that under Mississippi statute should have been distributed to the District alongside ad valorem taxes weren't being distributed properly.
The District's attorney asked the AG: how far back can the District seek payment? Is the three-year statute of limitations in § 15-1-49 going to bar older claims?
The AG had a clean answer for the legal question and a punt on the factual one.
Legal answer: No statute of limitations applies. Section 104 of the Mississippi Constitution provides: "Statutes of limitation in civil causes shall not run against the State, or any subdivision or municipal corporation thereof." § 15-1-51 says the same thing. The Mississippi Supreme Court in Jones County School District v. Department of Revenue, 111 So. 3d 588 (Miss. 2013), confirmed that Section 104 applies even in suits between governmental entities. So if Lauderdale County actually owes the school district money, there's no time-bar on collecting it.
Factual punt: Whether the District is actually owed prior years' taxes, and the specific amount, are factual questions for the local governing authorities (the County and the District) to determine, subject to judicial review. The AG can't make that call. § 7-5-25 limits AG opinions to prospective questions of state law; the AG cannot validate or invalidate past actions or determine factual amounts owed.
Bonus reference: The opinion drops a footnote-style nudge to § 37-57-108 and a prior 2019 Compton opinion. The earlier Compton opinion explains that any delinquent taxes received in the current tax year that exceed the increase limitation in § 37-57-107 must go into a special account and be calculated into the next year's budget. This matters because if the District suddenly receives years of back taxes in one lump, that money may have to be carried over rather than spent immediately.
So practical bottom line: the District can pursue the full backlog without running into a time-bar, and the County's auditor and supervisors should expect to be doing a multi-year reconciliation.
What this means for you
If you are a Mississippi school district attorney or business manager
Section 104 is your friend on past underpayments by the county. There's no three-year cap. If you discover a multi-year underpayment of any tax distribution owed to your district, you can pursue the full amount. Document the calculation carefully and get the State Auditor involved early; the Office of the State Auditor's Technical Assistance Division can help with the budget mechanics under § 37-57-108.
If you are on a Mississippi board of supervisors
A backlog of underpayments to your school district doesn't go away with time. If the county has been missetting tax distributions for years, you have to settle up. Build the analysis with your county auditor and counsel, and don't assume that older years are off the table.
If you are at the Office of the State Auditor
This kind of intergovernmental claim is in your wheelhouse. The Technical Assistance Division can help reconcile multi-year tax distributions and advise on § 37-57-108 budget mechanics. Counties and school districts will likely come to you for help when these claims surface.
If you are a county tax collector or county administrator
Audit your distribution mechanics annually. Under § 27-19-11 (privilege taxes on certain vehicles), § 27-35-501 et seq. (railcar property taxes), and § 27-65-231 (motor vehicle rental sales taxes), the county is responsible for distributing portions of these taxes to municipalities and school districts. Errors compound. A clean annual reconciliation can prevent the Lauderdale-style problem.
If you are a private litigant suing a Mississippi political subdivision
Note the asymmetry. Section 104 protects governmental plaintiffs from statute-of-limitations defenses but doesn't help private plaintiffs suing the state. Private claims against the state are subject to whatever statute of limitations applies; only government-vs-government cases get the no-limitations treatment.
Common questions
Q: What is Section 104 of the Mississippi Constitution?
A: It's a constitutional rule that statutes of limitation in civil cases do not run against the state, its subdivisions, or its municipal corporations. The text: "Statutes of limitation in civil causes shall not run against the State, or any subdivision or municipal corporation thereof." Section 15-1-51 of the Code restates the same principle.
Q: Does this apply to all kinds of governmental claims?
A: It applies broadly to civil causes brought by the state or its subdivisions. The Mississippi Supreme Court in Jones County School District confirmed it applies even in suits between governmental entities. Specific statutes can sometimes override Section 104 by setting their own time limits, but the general rule is no time-bar.
Q: What about claims against the government?
A: Section 104 protects governmental claimants. Claims against the government generally have their own time limits, often shorter than for private parties (notice requirements, Mississippi Tort Claims Act limitations, etc.). Section 104 does not lower those.
Q: What kinds of taxes were involved here?
A: Three:
- Privilege taxes on certain vehicles (property carrier and bus taxes), assessed under § 27-19-11. These are distributed by the county in the same manner as ad valorem tax proceeds.
- Railcar taxes, assessed under § 27-35-501. These are apportioned among municipalities and taxing districts within a county based on the miles of railroad in each, per § 27-35-519.
- Motor vehicle rental sales taxes, assessed under § 27-65-231 and distributed in the same manner as ad valorem taxes per § 27-65-231(3).
Q: How does the school district figure out how much is owed?
A: The county tax collector's records of receipts and distributions for each tax year, combined with statutory distribution formulas. The county auditor and the State Auditor's Technical Assistance Division can help with the calculation.
Q: What's the deal with § 37-57-108?
A: It addresses what happens when a school district receives delinquent taxes that exceed the year-over-year increase limitation in § 37-57-107. The excess goes into a special account and is calculated into the budget for the next fiscal year, rather than being spent in the current year. The AG flagged this so the District doesn't trip the cap inadvertently.
Q: Should the District sue the County, or work it out administratively?
A: That's a strategic call. Section 104 means the legal claim is open-ended in time, but the factual reconciliation can usually be done administratively if both boards cooperate. Suit may only be needed if the County contests the underpayment.
Q: Could interest also be owed on the underpaid amounts?
A: That depends on the specific statutes governing each tax distribution and on principles of governmental immunity. The opinion does not address interest. Local counsel and the State Auditor should evaluate.
Background and statutory framework
Section 104 of the Mississippi Constitution is unusual nationally. Most state constitutions don't have this kind of express anti-laches provision for governmental claimants. Mississippi's drafters apparently wanted to ensure the state and its subdivisions could pursue claims without time pressure.
The provision has practical bite when intergovernmental obligations run for years before being recognized. Tax distribution errors, contractual underperformance, statutory underpayments: these can compound, and Section 104 means the receiving entity has no time-bar to overcome.
The companion statute, § 15-1-51, restates the constitutional rule: "Statutes of limitations in civil cases shall not run against the State, or any subdivision or municipal corporation thereof." It's belt-and-suspenders.
§ 15-1-49 is the general three-year residual statute of limitations for "all actions for which no other period of limitation is prescribed." The AG's analysis: § 15-1-49 doesn't apply to claims by political subdivisions because of Section 104.
The Mississippi Supreme Court's decision in Jones County School District v. Department of Revenue, 111 So. 3d 588 (Miss. 2013), made the inter-governmental application explicit. The Court held Section 104 applies "even in a suit between governmental entities," removing any doubt about whether one Mississippi public body could plead a limitations defense against another.
§ 37-57-107 (the millage cap, controlling year-over-year ad valorem revenue growth for school districts) and § 37-57-108 (handling of certain tax receipts that exceed the cap) are the budget machinery for school districts. The AG's reference to these provisions is a reminder that recovering many years of back-taxes in a lump may trigger the carryover requirement, which affects how the recovered funds can actually be spent.
The opinion is also a clean illustration of the AG's procedural limits:
- AG opinions address prospective questions of state law (§ 7-5-25).
- The AG can't validate or invalidate past actions.
- Factual determinations (whether the taxes are owed, the amount) belong to local boards subject to judicial review.
Citations and references
Constitution:
- Miss. Const. § 104 (statutes of limitation do not run against the state or political subdivisions)
Statutes:
- Miss. Code Ann. § 7-5-25 (AG opinion authority)
- Miss. Code Ann. § 15-1-49 (three-year residual statute of limitations)
- Miss. Code Ann. § 15-1-51 (statutes of limitations do not run against the state)
- Miss. Code Ann. § 27-19-11 (privilege taxes on certain motor vehicles, distributed as ad valorem)
- Miss. Code Ann. § 27-35-501 (railcar taxes)
- Miss. Code Ann. § 27-35-519 (apportionment of railcar taxes)
- Miss. Code Ann. § 27-65-231 (motor vehicle rental sales tax)
- Miss. Code Ann. § 27-65-231(3) (distribution of rental sales tax as ad valorem)
- Miss. Code Ann. § 37-57-107 (school district millage cap)
- Miss. Code Ann. § 37-57-108 (handling of delinquent taxes exceeding the cap)
Cases:
- Jones Cnty. Sch. Dist. v. Dep't of Revenue, 111 So. 3d 588 (Miss. 2013) (Section 104 applies in suits between governmental entities)
Source
- Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
- Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2024/02/J.Compton-February-8-2024-Payment-of-Past-Due-Taxes.pdf
Original opinion text
February 8, 2024
John G. Compton, Esq.
Attorney, Lauderdale County School District
Post Office Box 845
Meridian, Mississippi 39302-0845
Re: Payment of Past Due Taxes
Dear Mr. Compton:
The Office of the Attorney General has received your request for an official opinion.
Background
According to your request, it was recently discovered that the Lauderdale County Board of Supervisors ("Board of Supervisors") failed to pay the Lauderdale County School District ("School District") its share of the privilege taxes, railcar taxes, or rental car taxes.
Questions Presented
-
How many years can the School District seek to be paid?
-
Is there an applicable statute of limitation that would apply to seeking payment of past taxes due the School District from the Board of Supervisors?
Brief Response
While this office cannot make the factual determination that the School District is owed prior year's taxes, if such determination is made by the local governing authorities, there is no limit on the number of years the School District may seek to be paid because Section 104 of the Mississippi Constitution provides that statutes of limitation shall not run against the State or political subdivisions.
Applicable Law and Discussion
Opinions of this office are limited to prospective questions of state law. Miss. Code Ann. § 7-5-25. This office cannot not validate or invalidate past actions. Therefore, to the extent that your question deals with past action, we must decline to respond with an official opinion, and we offer no opinion on prior payments or the validity or amount of the alleged taxes owed. This opinion should not be interpreted as a determination that taxes are owed by Lauderdale County to the School District. By way of information only, we offer the following.
We understand that the taxes you reference in your request are property carrier and bus taxes, railcar taxes, and motor vehicle rental sales taxes, which are levied or assessed in accordance with Sections 27-19-11, 27-35-501, and 27-65-231 of the Mississippi Code, respectively. The property carrier and bus taxes and motor vehicle rental sales taxes are to be distributed by the county in the same manner as ad valorem tax proceeds. Miss. Code Ann. §§ 27-19-11 and 27-65-231(3). The railcar taxes are apportioned between the municipalities and taxing districts within the county based on the number of miles of railroad within the municipalities taxing districts. Miss. Code Ann. § 27-35-519.
Whether the School District is owed prior years' taxes by the County or the specific number of years the School District may be paid are questions of fact to be made by the local governing authorities, subject to judicial review, and are outside the scope of an official opinion. However, if the local governing authorities do, in fact, determine that the School District is owed prior years' taxes, Section 104 of the Mississippi Constitution provides that "[s]tatutes of limitation in civil causes shall not run against the State, or any subdivision or municipal corporation thereof." See also Miss. Code Ann. § 15-1-51 (stating same). The Mississippi Supreme Court has held that Section 104 applies even in a suit between governmental entities. Jones Cnty. Sch. Dist. v. Dep't of Revenue, 111 So. 3d 588, 607 (Miss. 2013). Therefore, if a determination is made that taxes are owed, there is no limit to the number of years the School District can seek to be paid.
We also draw your attention to Section 37-57-108 as discussed in MS AG Op., Compton (June 21, 2019) (opining that any amount of delinquent taxes received in the current tax year by the school district that exceeds the increase limitation described in Section 37-57-107 must be deposited into a special account and calculated into the budget for the succeeding fiscal year). You may wish to contact the Technical Assistance Division of the Office of the State Auditor for any questions regarding the applicability of this statute to your situation.
If this office may be of any further assistance to you, please do not hesitate to contact us.
Sincerely,
LYNN FITCH, ATTORNEY GENERAL
By: /s/ Beebe Garrard
Beebe Garrard
Special Assistant Attorney General