Opinion
DOCKET NUMBER 2023 CA 0184 DOCKET NUMBER 2023 CA 0185 DOCKET NUMBER 2023 CA 0186 DOCKET NUMBER 2023 CA 0187 DOCKET NUMBER 2023 CA 0188 DOCKET NUMBER 2023 CA 0189
11-03-2023
HIGBEE LANCOMS, LP v. Kimberly L. ROBINSON, Secretary, Department of Revenue, State of Louisiana Higbee Louisiana, LLC v. Kimberly L. Robinson, Secretary, Department of Revenue, State of Louisiana Higbee Lancoms, LP v. Kimberly L. Robinson, Secretary, Department of Revenue, State of Louisiana Higbee Louisiana, LLC v. Kimberly L. Robinson, Secretary, Department of Revenue, State of Louisiana Higbee Louisiana, LLC v. Kimberly L. Robinson, Secretary, Department of Revenue, State of Louisiana Higbee Lancoms, LP v. Kimberly L. Robinson, Secretary, Department of Revenue, State of Louisiana
Antonio C. Ferachi, Aaron Long, Baton Rouge, Louisiana, Attorneys for Defendant - 1st Appellant Kevin Richard, in his official capacity as Successor Secretary of the Department of Revenue, State of Louisiana Jesse R. Adams, III, Camanda J. Fergus, Baton Rouge, Louisiana, Attorneys for Plaintiffs - 2nd Appellant Higbee LANCOMS, LP and Higbee Louisiana, LLC
APPEALED FROM THE BOARD OF TAX APPEALS, STATE OF LOUISIANA, DOCKET NUMBERS 12519D c/w 12649D, 12650D, 12764D, 12786D, and 12787D, HONORABLE FRANCIS J. LOBRANO, CHAIRMAN; CADE R. COLE, VICE-CHAIRMAN; JUDGE LISA WOODRUFF-WHITE (RET.), BOARD MEMBER
Antonio C. Ferachi, Aaron Long, Baton Rouge, Louisiana, Attorneys for Defendant - 1st Appellant Kevin Richard, in his official capacity as Successor Secretary of the Department of Revenue, State of Louisiana
Jesse R. Adams, III, Camanda J. Fergus, Baton Rouge, Louisiana, Attorneys for Plaintiffs - 2nd Appellant Higbee LANCOMS, LP and Higbee Louisiana, LLC
BEFORE: THERIOT, PENZATO, and GREENE, JJ.
GREENE, J.
2In these consolidated tax appeals involving refund claims under the Louisiana Bad Debt Refund Statute, the taxpayers and the Louisiana Department of Revenue both appeal the Louisiana Board of Tax Appeals’ judgment, granting in part and denying in part each side’s cross motion for summary judgment, and decreeing the taxpayers owed a partial recapture amount and the Louisiana Department of Revenue owed a partial refund. After review, we affirm in part, reverse in part, render judgment, and remand this matter to the Board of Tax Appeals.
FACTUAL AND PROCEDURAL BACKGROUND
The facts underlying this litigation are largely undisputed. Higbee Lancoms, LP and Higbee Louisiana, LLC are subsidiaries of Dillard’s, Inc. (collectively, Dillard’s) and operate a chain of department stores in Louisiana. In March 2014, Dillard’s entered into a Credit Card Program Agreement (CCPA) with Wells Fargo Bank, N.A., a national banking association (the Bank), whereby the Bank agreed to offer Dillard’s-branded credit cards to allow Dillard’s customers to purchase goods on credit. Under the CCPA, the Bank was the exclusive owner, of the credit card accounts, was entitled to receive all payments made by cardholders, and funded all cardholder indebtedness on the accounts. See CCPA § 4.4(a), (b), (c). Further, as between the Bank and Dillard’s, the Bank bore all credit losses, without recourse against Dillard’s, subject to one limited and indirect exception; that is, when the Bank wrote off unpaid credit card debt, Dillard’s share of certain revenues generated by the credit card program was reduced. See CCPA §§ 4.4., 9.1 and Schedule 9.1. (Id., 214)
When a customer used a Dillard’s credit card to finance a purchase, the CCPA required the Bank to pay Dillard’s the full amount charged. See CCPA § 4.4.(c). Dillard’s was then required to pay any sales taxes owed. See CCPA § 4.9. During the tax periods at issue, January 1, 2016 through December 31, 2019 (the Tax Periods), Dillard’s collected sales taxes on credit card purchases and remitted those taxes to the Louisiana Department of Revenue (Department). Later, after certain Dillard’s cardholders failed to pay their credit card debt to the Bank, those debts were ultimately found to be worthless 3and uncollectible, i.e., "bad debt," as defined by applicable federal law. The Bank "wrote off" the bad debt at issue on its federal income tax returns.
Later, Dillard’s filed refund claims with the Department under the Louisiana Bad Debt Refund Statute, La. R.S. 47:315, claiming entitlement to sales tax refunds on the bad debt attributable to the unpaid credit card accounts. The Department granted some of Dillard’s refund claims and issued those refunds to Dillard’s. The Department later determined that Dillard’s was not entitled to refunds for 2016, 2017, and 2018, because it, was the Bank, not Dillard’s, who had claimed the bad debt on its federal income tax returns. The Department sought to recapture the refunds it deemed erroneously refunded to Dillard’s and denied Dillard’s refund claim for 2019.
Dillard’s filed several petitions with the Louisiana Board of Tax Appeals (BTA) seeking a determination that Dillard’s had overpaid taxes to the Department, to recover funds erroneously paid, and to have certain assessments redetermined. The Department, through its then Secretary, Kimberly L. Robinson, answered the petitions. The BTA granted Dillard’s unopposed motion to consolidate the matters.
The petitions were filed under BTA Docket Nos. 12519D, 12649D, 12650D, 12764D, 12786D, and 12787D. By order dated June 29, 2021, the BTA consolidated the petitions for all purposes into Higbee, Lancoms, LP v. Kimberly L. Robinson, Secretary, Department of Revenue, State of Louisiana, Louisiana Board of Tax Appeals Docket No. 12519D.
Eventually, the Department filed a motion for summary judgment and an exception of no right of action. The Department argued that Dillard’s had no right to bad debt tax refunds for unpaid account balances due to the Bank and which the Bank had written off for tax purposes. Dillard’s filed a cross motion for summary judgment, claiming it qualified as a "dealer" who had paid the taxes and who could seek a refund under the Bad Debt Refund Statute.
After conducting a hearing on the cross motions and exception, the BTA issued an Order with Written Reasons in which it denied the Department’s exception and ruled that Dillard’s was entitled to partial refunds and partial redeterminations of the assessments (recaptures) for the Tax Periods and those amounts were to be calculated based on Dillard’s stake in certain revenues to which it was entitled under CCPA Schedule 9.1. On September 7, 2022, the BTA rendered judgment consistent with its ruling: granting in 4part and denying in part each party’s motion for summary judgment; ordering that Dillard’s owed the Department a recapture amount of $130,247.68, plus applicable overpayment interest; and ordering that the Department owed Dillard’s a refund of $128,348.90, plus applicable refund inter- est. The Department and Dillard’s both appealed the BTA’s judgment.
ASSIGNMENTS OF ERROR ASSERTED BY THE DEPARTMENT
1. The BTA committed legal error by ignoring this Court’s mandate that the Bad Debt Refund Statute must be strictly construed against Dillard’s and is a matter of legislative grace.
2. The BTA committed legal error by ignoring this Court’s mandate that Louisiana Administrative Code 61:?:4369(B)(5), a regulation of the Bad Debt Refund Statute, must be strictly construed against Dillard’s and instead interpreting it to afford Dillard’s as many avenues of recourse as can be extrapolated from the language of the regulation.
3. The BTA committed legal error by finding that Dillard’s possessed a right to a refund of taxes that Dillard’s did not pay, but where Dillard’s only collected and remitted the taxes.
4. The BTA committed legal error by finding that Dillard’s was entitled to reimbursement of the amount of tax previously paid by the Bank.
5. The BTA committed legal and factual error by finding that the requirements of the Bad Debt Refund Statute related to an unpaid balance of an account due to Dillard’s, when the uncontroverted facts established that the accounts and unpaid balances were owned by and due to the Bank.
6. The BTA committed legal error by interpreting the Bad Debt Refund Statute and LAC 61:I.4369(B)(5) to allow a refund based on the loss of profits.
7. The BTA committed legal and factual error by finding that the Bank maintained "full recourse" against Dillard’s for any unpaid debt, when the agreement between the parties specifically provided that the Bank bears all credit losses relating to these credit card accounts, and has no recourse against Dillard’s to require Dillard’s to repay to the Bank any sales tax or purchase price financed by the Bank.
ASSIGNMENT OF ERROR ASSERTED BY DILLARD’S
1. The BTA erred in limiting Dillard’s reimbursements of sales tax related to the write-off of bad debt to its stake in Program Revenue under Schedule 9.1 of the CCPA, and further, by affirming the assessment of additional sales tax on that basis.
RIGHT OF ACTION
[1] In assignment of error numbers three and four, the Department contends the BTA legally erred in finding that Dillard’s had a right to a refund for taxes Dillard’s did not pay. 5The Department argues that, although Dillard’s collected and remitted the applicable taxes, the Bank was the party who actually "paid" the taxes, because the funds Dillard’s used to pay the taxes were obtained from the Bank.
[2, 3] An action can only be asserted by a person having a real and actual interest that he asserts. La. C.C.P. art. 681. The function of the exception of no right of action is to determine whether the plaintiff belongs to the class of persons to whom the law grants the cause of action asserted in the suit. La. C.C.P. art. 927(A)(6). The exception does not question the person’s ability to prevail on the merits nor does it question whether the defendant may have a valid defense. Bannister Properties, Inc. v. State, 18-0030 (La. App. 1 Cir. 11/2/18), 265 So.3d 778, 786, writ denied, 19-0025 (La. 3/6/19), 266 So.3d 902. Whether a plaintiff has a right of action is a question of law that is reviewed de novo on appeal. Id. at 787.
Under La. R.S. 47:304(A), a dealer is responsible for collecting state and local sales taxes. Under La. R.S. 47:301(4)(b), a dealer is defined to include a retail seller. See Normand v. Wal-Mart.com USA, LLC, 19-00263 (La. 1/29/20), 340 So.3d 615, 625-26. Further, under CCPA § 4.9, Dillard’s was obligated to "pay any sales taxes due and payable by it relating to the sale of [g]oods." Dillard’s introduced the affidavit of Matthew Banks, Head of State Tax for Dillard’s, who attested that during the Tax Periods, when a Dillard’s credit card was used, Dillard’s remitted the full amount of applicable sales taxes to the Department from its own accounts. Thus, the record shows that Dillard’s did pay the taxes for the relevant Tax Periods. The question of whether Dillard’s has a right to a refund of those taxes under the Bad Debt Refund Statute pertains to the merits of the suit, not to Dillard’s right to bring this action. Whether Dillard’s will actually prevail on its bad debt refund claims is not contemplated by the exception of no right of action. See Bannister, 265 So.3d at 787. These assignments of error are meritless.
Louisiana Revised Statutes 47:304(A) pertinently provides, "The tax levied in this Chapter [Sales Taxes] shall be collected by the dealer from the purchaser or consumer[.]"
Louisiana Revised Statutes 47:301(4)(b) pertinently defines "Dealer" as including "[e]very person who sells at retail, or who offers for sale at retail… tangible personal property as defined herein." The status of Dillard's as a dealer is undisputed.
6 STANDARD OF REVIEW
The BTA has jurisdiction to hear and decide questions of law and fact arising from disputes between taxpayers and the Department, including redeterminations of assessments and refunds. See generally La. Const. Art. VII, § 1; La. R.S. 47:1401; 47:1431; 47:1625. Except as provided in La. Const. Art. V, § 5(D), appellate courts have sole jurisdiction to review BTA judgments. La. R.S. 47:1435(A). Upon such review, an appellate court has the power to affirm the BTA’s judgment or to modify or reverse the judgment, if it is, contrary to law or based on manifestly erroneous factual findings. See La. R.S. 47:1435(C).
[4, 5] The interpretation of a tax statute is a question of law that may be decided by summary judgment. Bannister, 265 So.3d at 788. When reviewing the BTA’s decision on a motion for summary judgment, this Court applies the same de novo standard of review applicable to a district court’s summary judgment decision. See Toyota Motor Credit Corporation v. Robinson, 21-0732 (La. App. 1 Cir. 5/9/22), 342 So.3d 372, 378; Bannister, 265 So.3d at 787-88. A court shall grant a motion for summary judgment if the pleadings, memorandum, and admissible supporting documents show there is no genuine issue of material fact and that the mover is entitled to judgment as a matter of law. See La. C.C.P. art. 966(A)(3) and (4). When a case involves cross motions for summary judg- ment, a court determines whether either party has established that there is no genuine issue of material fact and that the mover is entitled to judgment as a matter of law. See La. C.C.P. art. 966(A)(3) and (4); Amber, LLC v. Welsh Oil Co., Inc., 53,871 (La. App. 2 Cir. 4/14/21), 319 So.3d 427,434.
Although the Legislature recently amended La. C.C.P. art. 966, those amendments are not applicable to the instant appeal. See 2023 La. Acts No. 317, § 1 (eff. Aug. 1, 2023), and 2023 La. Acts No. 368, § 1 (eff. Aug. 1, 2023). Guilbeau Marine, et al. v. George J. Ledet, Jr., et al., 23-0065 (La. App. 1 Cir. 9/15/23), 375 So.3d 977, 982 n.9.
[6] As part of our discussion of the appropriate standard of review, we address the Department’s first two assignments of error, which challenge the BTA’s interpretation of the Bad Debt Refund Statute and LAC 61:1:4369, a corresponding Department regulation (the Bad Debt Refund Regulation), in favor of Dillard’s, rather than against Dillard’s. The BTA’s Order with Written Reasons states that the BTA construed the statute and 7regulation in Dillard’s favor by liberally interpreting them to afford Dillard’s "as many avenues for recourse as can be extrapolated from the language …." Although we will more fully address the effect of the BTA’s liberal construction in Dillard’s favor, at this point, we find that these assignments of error have merit.
[7, 8] We acknowledge that a court should liberally construe a statute that imposes a tax in favor of the taxpayer. DaimlerChrysler Services of North America, L.L.C. v. Secretary, Dept. of Revenue, 07-0010 (La. App. 1 Cir. 9/14/07), 970 So.2d 616, 619, writ denied 07-2374 (La. 2/1/08), 976 So.2d 725. However, as tax laws are sui generis, a statute that grants tax exemptions or tax refunds, should be strictly construed against the taxpayer. Id. Of particular relevance here, in construing the Bad Debt Refund Statute, the very statute at issue in this appeal, this Court noted in the DaimlerChrysler case that statutes providing refunds for credit sales that become bad debts are a matter of legislative grace and should be strictly construed against the taxpayer. Id. This reasoning equally applies to tax regulations, which have the full force and effect of law. See La. R.S. 47:1511; Normand, 340 So.3d at 628. Thus, with these legal precepts in mind, we are bound by the DaimlerChrysler court’s mandate to interpret the Bad Debt Refund Statute and the Bad Debt Refund Regulation strictly against Dillard’s, not in Dillard’s favor. The BTA legally erred in construing the statute and regulation otherwise.
LOUISIANA BAD DEBT REFUND STATUTE AND REGULATION
We begin, our de novo review with the substantive law applicable to these cross motions for summary judgment.
The Bad Debt Refund Statute, La. R.S. 47:315, pertinently provides:
B. (1) Whenever the unpaid balance of an account due to the dealer for the purchase of tangible personal property … has been found to be bad in accordance with Section 166 of the United States Internal Revenue Code and has actually been charged off for federal income tax purposes, the dealer shall be entitled to reimbursement of the amount of tax previously paid by the dealer on such amounts.
See definition at footnote 3.
Louisiana Revised Statutes 47:301(16)(a) pertinently defines "tangible personal property" as including "personal property which may be seen, weighed, measured, felt or touched[.]" The purchase of tangible personal property by Dillard's credit cardholders is undisputed herein.
Internal Revenue Code § 166 states, "Wholly worthless debts. - There shall be allowed as a deduction any debt which becomes worthless within the taxable year." 26 USCA § 166(a)(1). The existence of "bad debt" attributable to unpaid Dillard's credit card indebtedness is undisputed herein.
8The Bad Debt Refund Regulation, LAC 61:I.4369(B)(5), more fully explains a dealer’s right to claim a refund when the bad debt at issue arises from a credit sale that has been financed by a lending institution, rather than by the dealer who made the sale:
B. [Louisiana Revised Statutes] 47:315(B) … provide[s] a dealer with a method for claiming refunds for the recovery of taxes which have been remitted to the collector, but are later written off as uncollectible accounts from credit customers. Dealers submitting refund claims should be aware of the following restrictions specifically provided in or authorized by [La.] R.S. 47:315(B)[.]
* * * *
5. The sales tax is refundable only on those bad debts that are the result of credit or deferred payment sales of tangible personal property … financed by the dealer making the sale. No refund is authorized on bad debts … on sales financed by lending institutions … , unless the lender has full recourse against the seller for any unpaid amounts. (Emphasis added.)
[9] When the Bad Debt Refund Statute and Bad Debt Refund Regulation are read together, in order for a dealer to claim a tax refund on bad debt resulting from a lending institution’s financed sale, the dealer must prove: (1) there was a purchase of tangible personal property; (2) the sale was financed by a lending institution; (3) there is an unpaid account balance; (4) that balance is due to the dealer; (5) the unpaid balance constitutes "bad debt" as defined by federal law; (6) the dealer has previously paid the tax on the sale that became bad debt; (7) the bad debt has been charged off for federal income tax purposes; and, (8) the lending institution has full recourse against the dealer/seller for any unpaid amounts.
As indicated in footnote 3, a "dealer" is the seller in a retail sale setting.
Here, the parties do not dispute that Dillard’s cardholders bought tangible personal property using a Dillard’s credit card financed by the Bank, a lending institution (above requirements 1 and 2). Further, it is undisputed that there were unpaid account balances constituting "bad debt" and the Bank charged off that bad debt for federal income tax purposes (above requirements 3, 5, and 7). In deciding Dillard’s has a right of action in this suit, we have determined Dillard’s "paid" the tax on the bad debt (above requirement 96). Thus, the remaining issues are whether the unpaid account balances were "due to" Dillard’s and whether the Bank had "full recourse" against Dillard’s for any unpaid amounts (above requirements 4 and 8).
In this case, Dillard’s is seeking a tax refund on bad debt the Bank charged off on its federal income tax return. It appears logical that the party seeking the tax refund under the Bad Debt Refund Statute would be the same party who charged off the bad debt for federal income tax purposes. However, the Department has not assigned error to the BTA’s conclusion that the Bad Debt Refund Statute does not require such.
The Department also argues that the "previously paid" requirement (above requirement 6) was not met, because Dillard’s has not shown that it used its own funds to pay the sales tax at issue; rather, the Department argues Dillard’s only collected and remitted the taxes using funds provided by the Bank. Because we conclude Dillard's did not meet requirements 4 and 8 of a bad debt tax refund claim, we need not decide whether the "previously paid" requirement requires proof of the source of the funds used.
[10] In assignment of error number five, the Department argues that the BTA legally and factually erred by finding the unpaid account balances were due to Dillard’s, when the uncontroverted facts establish that the unpaid account balances were owned by and due to the Bank. We agree. CCPA § 4.4 clearly shows that the parties agreed that the Bank was the "sole and exclusive owner of all Accounts[.]" Further, a cardholder’s use of the credit card created a debtor/creditor relationship "between the … [c]ardholder and the Bank," not between Dillard’s and the cardholder. Dillard’s had "no right, title or interest" in or to any of the accounts or account proceeds, and the Bank was entitled to "receive all payments made by [c]ardholders." Thus, we conclude the unpaid account balances were due to the Bank, not to Dillard’s.
[11] In assignments of error numbers six and seven, the Department argues the BTA legally and factually erred in finding that the Bank maintained "full recourse" against Dillard’s for any unpaid amounts generated by the bad debt. As earlier discussed, our review requires that we strictly construe the Bad Debt Refund Statute and Bad Debt Refund Regulation against Dillard’s, the taxpayer. DaimlerChrysler, 970 So.2d at 619. Thus, unless the CCPA provides the Bank with "full recourse" against Dillard’s for any unpaid amounts generated by the bad debt for which Dillard’s seeks a tax refund, Dillard’s is not entitled to the refunds.
CCPA § 4.4(a) pertinently provides:
As between [Dillard’s] and the Bank, subject to the Bank’s chargeback rights in Sections 8.5 and 8.6 and except as provided in Schedule 9.1, all credit losses shall be borne solely by the Bank without recourse to [Dillard’s]. (Emphasis added.)
Thus, under CCPA § 4.4(a), the Bank bears all credit losses without recourse against Dillard’s, except as provided in CCPA Schedule 9.1. Under CCPA § 9.1, the Bank 10is obligated to pay Dillard’s certain revenue generated by the credit card program, as provided by a complex formula set forth in CCPA Schedule 9.1. Dillard’s argues that when the Bank writes off bad debt, that write-off negatively affects the amount of revenue the Bank pays Dillard’s under CCPA Schedule 9.1. According to Dillard’s, this reduced revenue proves that the Bank has "recourse" against Dillard’s for the bad debt that the Bank has written off and fulfills the "full recourse" requirement of the Bad Debt Refund Regulation, (Id.)
We note that CCPA § 8.5 ("The Banks Right to Charge Back") and § 8.6 ("Exercise of Chargeback") provide the Bank with recourse against Dillard’s under certain circumstances when a cardholder does not pay. In support of their respective motions for summary judgment, the parties do not reference CCPA § 8.5 and § 8.6 as supporting or refuting whether the Bank has "full recourse" against Dillard’s; rather, they focus their arguments on CCPA Schedule 9.1. Thus, we do not address CCPA §§ 8.5 and 8.6, because a court may render or affirm a summary judgment only as to those issues set forth in the motion under consideration at that time. See La. C.C.P. art. 966(F); Troncoso v. Point Carr Homeowners Association, 22-0530 (La. App. 1 Cir. 1/10/23), 360 So.3d 901, 916.
To explain its argument, Dillard’s filed the affidavit of Michael Hodapp, Dillard’s Director of Consumer Credit. Referencing CCPA § 3.1(e), Mr. Hodapp explained that one of the CCPA’s objectives was that Dillard’s and the Bank share in the revenues generated by the credit card program. According to Mr. Hodapp, CCPA’s Schedule 9.1 contains a formula whereby Dillard’s share of revenue is calculated by a "Risk Adjusted Margin," which accounts for "Program Net Losses," including written-off cardholder indebtedness and recovered sales taxes. Mr. Hodapp concluded that, when taken together, "it is clear that Dillard’s has an economic risk not only in the recovery of Sales Taxes related to Bad Debt, but also in Cardholder Indebtedness that is written off by [the Bank], as it directly affects Dillard’s revenue share from the [credit card program]."
In opposition, the Department argues that potential loss of some "profits" by Dillard’s under CCPA Schedule 9.1’s revenue sharing formula hardly means that the Bank had "full recourse" against Dillard’s for any unpaid amounts generated by the bad debt. According to the Department, the "full recourse" contemplated by the Bad Debt Refund Regulation would allow the lender who financed the credit sale to seek full reimbursement from the dealer/seller of all amounts not paid by the credit card customer, i.e., 100% of the sales price and 100% of the sales tax.
The Bad Debt Refund Regulation does not define "full recourse." However, it does require that the lending institution have "full recourse" for "any unpaid amounts." 11Payment "in full" means payment of "the whole or complete amount." Black’s Law Dictionary (11th ed. 2019). Strictly construing the Bad Debt Refund Regulation, we find that "full recourse" would allow Dillard’s to claim a bad debt refund of sales taxes financed by the Bank only if Dillard’s was required to reimburse the Bank for "the whole or complete amount" that Dillard’s customers did not pay on their credit card accounts. Such is not the case here. CCPA § 4.4(a) specifically provides that "all credit losses are borne solely by the Bank without recourse to [Dillard’s]," except as provide by Schedule 9.1. Nothing in Schedule 9.1 requires that Dillard’s reimburse the Bank for any unpaid amount generated by the subject bad debt, much less "the whole or complete amount." The fact that CCPA Schedule 9.1 may provide the Bank some limited, indirect recourse against Dillard’s via a reduction in revenue sharing does not mean that the Bank has full recourse against Dillard’s. On de novo review, we cannot conclude that the Bank has full recourse for any unpaid amounts against Dillard’s merely by virtue of its ability to reduce Dillard’s revenue share under CCPA Schedule 9.1.
We also observe that "full recourse" is similar to the obligation a surety incurs for the "full performance" of a principal debtor’s obligation. See La. C.C. art. 3045 ("A surety, or each surety when there is more than one, is liable to the creditor in accordance with the provisions of this Chapter, for the full performance of the obligation of the principal obligor, without benefit of division or discussion, even in the absence of an express agreement of solidarity.")
Based on the foregoing, we find that the BTA erroneously granted Dillard’s motion for summary judgment in part and erroneously denied the Department’s motion for summary judgment in part. Dillard’s does not meet all requirements for a refund claim under the Bad Debt Refund Statute and Bad Debt Refund Regulation. The unpaid account balances in this case were due to the Bank, not to Dillard’s. Further, the Bank, as the lending institution who financed the sales resulting in the unpaid debts, did not have full recourse against Dillard’s for any unpaid amounts generated by the subject bad debt. Thus, the Department has proven there are no genuine issues of material fact and that it is entitled to judgment as a matter of law. See La. C.C.P. art. 966(A)(3) and (4); Amber, LLC, 319 So.3d at 434. For these same reasons, we conclude Dillard’s assignment of error is meritless.
12 DECREE
We affirm the Board of Tax Appeals’ September 7, 2022 judgment insofar as it denied the Louisiana Department of Revenue’s exception of no right of action. We reverse the September 7, 2022 judgment insofar as it partially granted the motion for summary judgment filed by Higbee Lancoms, LP and Higbee Louisiana, LLC, and ordered, the Louisiana Department of Revenue to pay Higbee Lancoms, LP and Higbee Louisiana, LLC a refund of $128,348.90, plus applicable refund interest.
We reverse the September 7, 2022 judgment insofar as it partially denied the motion for summary judgment filed by the Louisiana Department of Revenue.
We render judgment granting the motion for summary judgment filed by the Louisiana Department of Revenue. We remand this matter to the Board of Tax Appeals, which includes a remand of the judgment’s award of $130,247.68 as a recapture amount, to redetermine the appropriate amount owed by Higbee Lancoms, LP and Higbee Louisiana, LLC to the Louisiana Department of Revenue for tax years 2016, 2017, 2018, and 2019. We assess appeal costs against Higbee Lancoms, LP and Higbee Louisiana, LLC.
AFFIRMED IN PART; REVERSED IN PART; JUDGMENT RENDERED; AND, REMANDED.