Ex parte Exxon Mobil Corp.

Summary

The Supreme Court of Alabama reviewed whether Baldwin County could impose a local use tax on Exxon Mobil's offshore drilling and production facility. The court held that Ala. Code § 40-20-2(c) and (d) broadly prohibited such taxation of offshore drilling or production facilities, reversed the judgment upholding the assessment, and remanded the case.

Holdings

1. The clear and comprehensive language of § 40-20-2(c) and (d) exempted Exxon's Baldwin offshore facility from Baldwin County's use tax because the facility was an offshore drilling or production facility located on submerged lands and the statute prohibited local taxation directly or indirectly upon such facilities and equipment.
2. For property manufactured outside Alabama and transported into the state, the local use-tax taxable event could occur only after interstate transportation ended and the property came to rest in Alabama for use or consumption.
3. The Department of Revenue's preliminary audit information and communications were not entitled to favorable administrative-construction weight because the department had made no formal determination that the statutory limitations were unavailable to Exxon.

Questions Presented

1. Whether Alabama Code § 40-20-2(c) and (d) prohibited Baldwin County from imposing its local use tax on Exxon's offshore drilling and production facility.
2. When the taxable event for a use tax occurred for property manufactured outside Alabama and transported into the state.
3. Whether the Alabama Department of Revenue's preliminary audit information and related communications were entitled to substantial weight as an administrative interpretation of § 40-20-2(c) and (d).

Disposition

reversed_and_remanded