CARROLL BROTHERS LLC LLC v. GRAHAM (2026)

¶1. This case involves an audit conducted by Mississippi Department of Revenue (MDOR) of three separate entities and individuals—Carroll Brothers, LLC, Ben's Back Alley Kitchen, LLC, and Benjamin Carroll (the Taxpayers). The Taxpayers claim that they never received the mailed assessments and that the notice provisions in Mississippi Code Sections 27-65-37(2) and 27-77-5(1) (Rev. 2024) are unconstitutional. After unsuccessful appeals to the MDOR Board of Review (the Board) and the Board of Tax Appeals (BTA), the Taxpayers appealed to the Hinds County Chancery Court. The chancery court granted summary judgment in favor of MDOR. After review, we affirm the chancery court's judgment.

FACTS AND PROCEDURAL HISTORY

¶2. MDOR audited the Taxpayers for sales and income tax for periods falling between February 1, 2019, through October 31, 2021, though the precise audit period varied by taxpayer. On January 26, 2022, MDOR held a meeting with the audit staff, the Taxpayers, and the Taxpayers’ counsel to discuss the audit results, which the Taxpayers disputed. At the close of the meeting, the Taxpayers completed an updated sales-tax registration form to update the address for mailing assessments. MDOR ultimately determined that Carroll Brothers, LLC, owed $206,503, Benjamin Carroll owed $177,833, and Ben's Back Alley Kitchen, LLC, owed $616; it mailed each assessment to the updated address on March 18, 2022. In accordance with Section 27-77-5(1), the Taxpayers had sixty days to appeal those assessments.

¶3. The Taxpayers untimely appealed the assessments to the Board on June 20, 2022, claiming they never received the assessments. The Board denied the appeal as untimely.

¶4. Aggrieved by the Board's decision, the Taxpayers appealed to the BTA on August 19, 2022, again asserting their claim that the assessments were not received. Following a hearing, the BTA affirmed the Board's decision.

¶5. The Taxpayers subsequently appealed the BTA's decision to the Hinds County Chancery Court on May 8, 2023. They argued that the BTA erred by determining that MDOR's presented evidence was sufficient to establish that the assessments were actually mailed and that notice requirements of Sections 27-65-37(2) and 27-77-5(1) violate their due-process rights and are therefore unconstitutional. MDOR and the Taxpayers each filed a motion for summary judgment. Following a hearing, the chancery court granted summary judgment in favor of MDOR, stating that “the constitutionality of the notice requirements of our Mississippi tax statutes have been considered and upheld by our appellate courts.” The Taxpayers appealed.

STANDARD OF REVIEW

¶6. This Court reviews a trial court's grant or denial of summary judgment de novo. Miss. Dep't of Revenue v. Tenn. Gas Pipeline Co., LLC, 408 So. 3d 1266, 1267 (Miss. 2025) (citing Builders & Contractors Ass'n of Miss. v. Laser Line Constr. Co., LLC, 220 So. 3d 964, 965 (Miss. 2017)). Because tax appeals present questions of law, this Court also reviews them de novo. Id. (citing Miss. Dep't of Revenue v. Comcast of Ga./Va., Inc., 300 So. 3d 532, 535 (Miss. 2020)).

DISCUSSION

¶7. The Taxpayers raise two issues on appeal: (1) MDOR failed to prove that it actually mailed the assessments; and (2) the notice provisions in Sections 27-65-37(2) and 27-77-5(1) are unconstitutional. For the reasons discussed below, we find that the Taxpayers’ arguments are without merit.

1. Whether MDOR failed to prove that it actually mailed the assessments.

¶8. Section 27-65-37(2) details the requirements for mailing assessments:

The commissioner shall give notice to the taxpayer of the assessments and demand payment of the tax, damages and interest within sixty (60) days from the date the commissioner mailed or hand delivered the notice. The notice shall be sent by regular first class mail or delivered by an agent of the commissioner. In the case of an individual, the notice shall be sent by mail to the taxpayer or delivered by an agent of the commissioner to the taxpayer, to a manager or general agent at the taxpayer's place of business or to someone above the age of sixteen (16) years at the taxpayer's residence. In the case of a partnership, the notice shall be sent by mail to the partnership or delivered by an agent of the commissioner to any partner, to a manager or general agent at the taxpayer's place of business or to someone above the age of sixteen (16) years at the residence of any partner. In the case of a corporation, limited liability company, joint venture, association, estate, trust or other group or combination acting as a unit, including any government entity, the notice shall be sent by mail to the taxpayer or delivered by an agent of the commissioner to an officer of the entity, to someone above the age of sixteen (16) years at the residence of an officer of the entity or to a manager or general agent at the taxpayer's place of business.

Miss. Code Ann. § 27-65-37(2) (Rev. 2024) (emphasis added). The MDOR Administrative Code defines “[m]ail, mailed, or mailing [as] ․ placing a document or item in First Class United States Mail, postage prepaid, addressed to the person to whom the document or item is to be delivered at the last known address of that person.” 35 Miss. Admin. Code Pt. 1, R. 1.01 (amended Dec. 23, 2024), Westlaw.

¶9. The Taxpayers argue that granting summary judgment in favor of MDOR is improper because they never received the assessments and MDOR did not sufficiently demonstrate that it actually mailed the assessments. This Court has held that a “mere denial of receipt [of notice] is insufficient to create a triable issue of fact.” Fid. Fin. Servs. v. Stewart, 608 So. 2d 1111, 1113 (Miss. 1992) (internal quotation marks omitted) (quoting Carter v. Allstate Indem. Co., 592 So. 2d 66, 75 (Miss. 1991)). Further, “[t]here is a presumption that mail deposited, postage prepaid and properly addressed is timely delivered to the person addressed.” Thames v. Smith Ins. Agency Inc., 710 So. 2d 1213, 1216 (Miss. 1998) (citing Hagner v. United States, 285 U.S. 427, 430, 52 S. Ct. 417, 76 L. Ed. 861 (1932)).

¶10. MDOR presented an affidavit from Laura Baxter, audit lead of MDOR's Gulf Coast office. Baxter stated that she was personally involved in the Taxpayers’ audits. She further stated that, at the conclusion of the meeting, the Taxpayers completed a sales-tax registration form updating their address for the mailing of the assessments to 2953 Bienville Boulevard, Suite 141, Ocean Springs, Mississippi. Baxter additionally stated that she approved the audit, which led to the issuance of assessments through MDOR's internal system, Mississippi Automated Revenue System (MARS). Finally, Baxter stated that the assessments were mailed to the updated address provided by the Taxpayers.

¶11. MDOR also presented an affidavit from Richard Smith, MDOR's systems architect. Smith stated that his areas of personal knowledge include MARS data reading, assistance with mailing of correspondence, and specific processes related to data exchange between MDOR, Pitney Bowes (an MDOR provider of third-party mailing and software systems), and the United States Postal Service (USPS). Smith also stated that the Taxpayers’ letters containing the assessments were deposited in the mail with prepaid postage and sent to the updated address listed by the Taxpayers. He further noted that MDOR's records showed that USPS received the letters and that none of the letters were returned to MDOR as undeliverable.

¶12. The Taxpayers argue that both affidavits are unreliable and inadmissible. Specifically, they contend that Baxter lacked personal knowledge as to whether the assessments were issued and mailed. See MRE 602. The Taxpayers likewise argue that Smith lacked personal knowledge regarding the issuance and mailing of the assessments and further contend that his opinion was inadmissible See MRE 701.

¶13. Mississippi Rule of Evidence 602 states that “[a] witness may testify to a matter only if evidence is introduced sufficient to support a finding that the witness has personal knowledge of the matter. Evidence to prove personal knowledge may consist of the witness's own testimony.” Baxter stated that she was personally involved with the audit and that the assessments were generated through MARS once she approved the audit. Smith's affidavit corroborates her statement while also elaborating on the mailing process. Smith specifically stated that data from the MARS system and Pitney Bowes showed that USPS received and processed all three letters. He further stated that based on his personal knowledge and experience, “if the letter[s] had not been mailed ․ no processing data would be received from [USPS].”

¶14. Mississippi Rule of Evidence 701 governs opinion testimony by lay witnesses. The Rule provides that if a witness is not testifying as an expert, testimony in the form of an opinion is limited to one that is:

(a) rationally based on the witness's perception;

(b) helpful to clearly understanding the witness's testimony or to determining a fact in issue; and

(c) not based on scientific, technical, or other specialized knowledge within the scope of Rule 702.

MRE 701.

¶15. The Taxpayers argue that the contents of Smith's affidavit are based on technical or specialized knowledge and therefore require Smith to be admitted as an expert to render his statement admissible. We disagree. Smith stated that, as a systems architect for MDOR, he is familiar with MARS data reading and other records related to MDOR information submitted to USPS for receiving and processing. Specifically here, he stated that his research and review of the records showed that USPS received and processed all three of the Taxpayers’ letters. These statements are rationally based on Smith's personal review of the relevant records and helpful to determine the fact at issue—whether the letters were actually mailed. Further, Smith does not offer any analysis based on technical or specialized knowledge. He merely reports what the records reflect. Such testimony does not require expert qualification and falls squarely within the scope of Rule 701. In sum, we find that MDOR's records and employee affidavits are sufficient to establish that MDOR mailed the assessments in accordance with Section 27-65-37(2) and the MDOR Administrative Code.

2. Whether the notice provisions in Sections 27-65-37(2) and 27-77-5(1) are unconstitutional.

¶16. MDOR additionally argues that the notice provisions in Sections 27-65-37(2) and 27-77-5(1) are unconstitutional. Specifically, the Taxpayers take issue with the provisions in both statutes that allow the assessments to be sent through mail. See §§ 27-65-37(2) and 27-77-5(1). The Taxpayers argue that this form of notice is insufficient and therefore violates their procedural due-process rights.

¶17. As stated above, Section 27-65-37(2) requires that the commissioner “give notice to the taxpayer of the assessments ․ by regular first class mail or delivered by an agent of the commissioner.” § 27-65-37(2). Mississippi Code Section 27-7-51 governs the overpayment of taxes, additional taxes, and refunds. Subsection (1) states, in relevant part, that the “[i]f the correct amount of tax is greater than that shown in the return of the taxpayer, the commissioner shall make his assessment of additional tax due by mail or by personal delivery of the assessment to the taxpayer, which assessment shall constitute notice and demand for payment.” Miss. Code Ann. § 27-7-51(1) (Rev. 2025).

¶18. “When addressing a statute's constitutionality, we apply a de novo standard of review, bearing in mind (1) the strong presumption of constitutionality; (2) the challenging party's burden to prove the statute is unconstitutional beyond a reasonable doubt; and (3) all doubts are resolved in favor of a statute's validity.” Clark v. Bryant, 253 So. 3d 297, 300 (Miss. 2018) (internal quotation marks omitted) (quoting Johnson v. Sysco Food Servs., 86 So. 3d 242, 243-44 (Miss. 2012)). “The statutes must be shown to be in direct conflict with ‘the clear language of the constitution.’ ” 5K Farms, Inc. v. Miss. Dep't of Revenue, 94 So. 3d 221, 227 (Miss. 2012) (quoting PHE, Inc. v. State, 877 So. 2d 1244, 1247 (Miss. 2004)). Moreover, this Court affords a “particularly strong” deference to legislative enactments when addressing constitutional challenges to taxation statutes. Id. (citing City of Belmont v. Miss. State Tax Comm'n, 860 So. 2d 289, 306 (Miss. 2003)).

¶19. The due-process requirements of the federal Constitution and the Mississippi Constitution are coextensive. See Nat'l Collegiate Athletic Ass'n v. Farrar, 402 So. 3d 1251, 1258 (Miss. 2024). “[D]ue process requires the government to provide ‘notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.’ ” Jones v. Flowers, 547 U.S. 220, 226, 126 S. Ct. 1708, 164 L. Ed. 2d 415 (2006) (quoting Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 70 S. Ct. 652, 94 L. Ed. 865 (1950)). The notice provisions at issue satisfy this standard because they are reasonably calculated to inform the Taxpayers of the assessments and to afford the Taxpayers an opportunity to challenge them. The Taxpayers offer no argument sufficient to overcome the strong presumption that duly enacted statutes comply with constitutional due-process requirements.

CONCLUSION

¶20. MDOR presented sufficient evidence to establish that it mailed the assessments to the Taxpayers. Further, the Taxpayers fail to overcome the strong presumption that both statutes are constitutional. Therefore, we affirm the chancery court's judgment.

¶21. AFFIRMED.

¶22. The taxpayers have demonstrated the existence of an issue of fact. In response to the Mississippi Department of Revenue's evidence that it had mailed the statutorily required assessment notices, the taxpayers have produced evidence that they never received the assessment notices. Accordingly, as more fully explained below, I would reverse the trial court's grant of summary judgment in favor of the Department and remand the case.

¶23. In Fidelity Financial Services, Inc. v. Stewart, 608 So. 2d 1111 (Miss. 1992), we affirmed a trial court's denial of summary judgment on the issue of service of notice. In Stewart, the issue was whether Fidelity gave sufficient notice to the Stewarts that their repossessed car had been sold. Id. at 1111. As in the case sub judice, Fidelity served the Stewarts via mail; unlike today's case, Fidelity used certified mail. Id. The certified mail receipt was signed by someone other than the Stewarts who had used the mailing address. Id. The trial court directed a verdict in favor of the Stewarts, finding that Fidelity had failed to give them the required notice. Id. at 1112.

¶24. The Stewart Court affirmed the decision of the trial judge, holding: “Fidelity provided sufficient notice as a matter of law but not as a matter of fact.” Id. at 1114. The Court reasoned that proof of mailing creates a rebuttable presumption that notice was received by the intended person. Id. It follows that in order for notice to be effective, the fact of receipt must be shown.

¶25. In Carter v. Allstate Indemnity Co., 592 So. 2d 66 (Miss. 1991), a case applied by the Stewart Court, the issue was whether a former insured had received a notice of cancellation of an insurance policy. Carter, 592 So. 2d at 67. The Carter Court clearly treated the chancellor's finding that the insured had received the notice, creating no triable issue of fact. Id. at 69. The Court recounted the chancellor's factual findings, including the chancellor's finding that the insured's claim not to have received notice was not credible. Id.

¶26. The Carter Court included an instructive footnote for purposes of today's case that reads as follows:

This Court does not feel compelled at this time to require a showing of conclusive proof that the insured actually received the notice. Such a requirement might arguably be consistent with the notion that insureds have an intangible property interest in an insurance policy and, therefore, are entitled to due process (i.e., actual notice) before the policy may be cancelled. See MISS. CONST. art. 3, § 14 (“No person shall be deprived of life, liberty, or property except by due process of law.”). Indeed, the quantum of state action which is involved in the regulation of the insurance industry in Mississippi might, under certain circumstances, trigger due process clause of the state constitution. See Andrew Jackson Life Ins. Co. v. Williams, 566 So. 2d 1172, 1174 (Miss. 1990). But an actual-notice requirement could lead to a plethora of unforeseen problems. For example, an unscrupulous insured could prevent effective cancellation by simply ignoring or dodging the notice. See, e. g., Larocque [v. R. I. Joint Reinsurance Ass'n, 536 A.2d [529,] 531 [(R.I. 1988)]; Alexander v. State Farm Mut. Auto. Ins. Co., 148 So. 2d 898, 904 (La. Ct. App. 1962).

Carter, 592 So. 2d at 75 n.4. In distinguishing the insurance case before it from cases in which a person's property interest is at stake, the Carter Court pointed to the due process protections of article 3, section 14, of the Mississippi Constitution and the requirement thereunder that, when property interests are at stake, due process requires that notice be received—not merely sent. “The citizen has a due process right to challenge the accuracy and proportionality of the assessment and taxation of his property.” White v. Gautier Util. Dist. Of Jackson Cnty. (In re Validation of $7,800,000), 465 So. 2d 1003, 1008 (Miss. 1985).

¶27. In a final section of its opinion, the Carter Court addressed the question of whether a certificate of mailing constitutes “conclusive proof that the insured received notice ․” Carter, 592 So. 2d at 73. Although addressing notice from an insurance company to its (former) insured, the following passage applies to the notice requirement applicable to the Department:

The insurance industry's general disregard for whether the cancellation notice actually reaches the insured's last known address or is lost or delayed through a miscarriage of mail is outmoded and nonsensical. Such disregard can no longer prevail for the simple reason that it is clearly the antithesis of a notice requirement and its purposes.

Id. at 74. The Court went on to delineate the rule that decided Stewart, writing, “Contrary to what some may have contended in the past, production of a certificate of mailing does not constitute conclusive proof of the insured's actual receipt of the cancellation notice. A certificate of mailing establishes a presumption that the notice reached its destination ․” Carter, 592 So. 2d at 75.

¶28. Stewart and Carter make it clear that when notice has been mailed, the purported recipient can, as the taxpayers attempt to do here, demonstrate that notice never found him. Should one demonstrate that one never received notice, notice would be deemed insufficient. However, the Carter Court added some language to its opinion that needs consideration. It wrote that the presumption “may be rebutted by the insured who contends that he or she did not actually receive the notice. But mere denial of receipt is insufficient to create a triable issue of fact.” Carter, 592 So. 2d at 75. To rise above a “mere denial,” the purported notice recipient must produce “countervailing evidence of sufficient weight to rebut the presumption that it was received.” Id. (citing Miss. Code Ann. § 83-11-9 (1972)).

¶29. Here, the taxpayers aver in their affidavits that they never received the Department's assessment notices until, well after the Department claims to have mailed them, they were emailed to their tax attorney. The taxpayers’ averments on the point are not ambiguous or nuanced. They do not state that they might have received the assessment notices and just do not remember. They offer straightforward denials that the notices were received through the mail. The Carter Court did not expound on what it meant by “evidence of sufficient weight,” nor did it explain what it meant by “mere denial of receipt.” Id. In Stewart, the Court pointed to the certified mail receipt that had been signed by one other than the intended recipients of the notice and the testimony of the one who actually signed the receipt to the effect that she never gave the notice to them. Stewart, 608 So. 2d at 1113.

¶30. Here, especially in light of our law governing motions for summary judgment, the taxpayers have done enough to create an issue of material fact. Before us for review is the chancellor's order granting the Department's motion for summary judgment. Because the taxpayers were responding to the motion, we must take all competent summary judgment evidence produced by them as true. “When reviewing an award of summary judgment, this Court views all evidence in the light most favorable to the nonmovant, including ‘admissions in pleadings, answers to interrogatories, depositions, affidavits, etc.,’ and will presume that all evidence in the non-movant's favor is true.” Downs v. Choo, 656 So. 2d 84, 85 (Miss. 1995) (quoting Daniels v. GNB, Inc., 629 So. 2d 595, 599 (Miss. 1993)). “ ‘The movant carries the burden of demonstrating that no genuine issue of material fact exists, and the non-moving party is given the benefit of the doubt as to the existence of a material fact.’ ” ACE Am. Ins. Co. v. Hetsco, Inc., 393 So. 3d 1015, 1021 (¶ 16) (Miss. 2024) (quoting Webb v. Braswell, 930 So. 2d 387, 395 (Miss. 2006)). All reasonable inferences must be drawn in favor of the taxpayers. Galanis v. CMA Mgmt. Co., 175 So. 3d 1213, 1216 (¶ 15) (Miss. 2015).

¶31. The individual taxpayers, Benjamin Carroll and Thomas Carroll, each submitted affidavits in response to the Department's motion for summary judgment. Benjamin Carroll is the sole member of Carroll Brothers, LLC, and Thomas Carroll is the manager. In his affidavit, Benjamin details the history of the Department's audit of his business, beginning in April 2021 with the receipt of audit selection notices from the Department. He also describes his practice for handling correspondence from the Department, which was that he would forward such correspondence to Thomas Carroll. Benjamin Carroll then goes on to describe in detail the audit process, including an in-person meeting with the Department's auditor and production of “a significant amount of additional documentation” to the Department. According to his affidavit, the Department twice edited the audit working papers based on that additional documentation. He avers that prior to June 2022, he believed that the auditor was still finalizing the audit. Then, in June 2022, Thomas Carroll advised him that the Department had issued notices of taxpayer liens because the taxpayers had failed to timely appeal the results of the audit or to pay. Again, he also averred that he never received the assessment notices. Thomas Carroll's affidavit largely mirrors that of Benajmin's. Thomas averred that he would “as a matter of practice” forward any correspondence from the Department to his tax attorney's office. He also confirms Benjamin's description of the audit history.

¶32. The record before us picks up where the affidavits stop. Importantly, the Carrolls appealed the assessment notices on June 20, 2022, or ten days after their attorney received them via email from the Department.

¶33. The taxpayers have produced more than enough competent summary judgment evidence to demonstrate an issue of fact as to whether they ever received the assessment notices. Coupled with sworn statements that they never received the notices, they have produced evidence of their pattern of conduct, e.g., close involvement with the auditing process, interactions with the auditor, and the immediate appeal of the assessments once they did learn of them, from which the finder of fact could infer that they never received the assessment notices.

¶34. Pursuant to the foregoing, I would hold that the taxpayers demonstrated an issue of material fact as to the question of notice. Accordingly, I would reverse the trial court's grant of summary judgment in favor of the Department, and, with respect, I dissent. Because it is not necessary to address whether the notice statutes are constitutional in order to resolve the appeal, I would decline to address the issue. Mitchell v. State, 240 Miss. 308, 310, 127 So. 2d 394, 394-95 (1961).

ISHEE, JUSTICE, FOR THE COURT:

RANDOLPH, C.J., KING, P.J., GRIFFIS, SULLIVAN, BRANNING AND WILSON, JJ., CONCUR. COLEMAN, P.J., DISSENTS WITH SEPARATE WRITTEN OPINION.