The Louisiana Department of Revenue did not file an application for writs of review with the Louisiana Supreme Court in the Avanti Exploration case within the appropriate delays, and therefore the Court of Appeal decision in the Avanti case is final and no longer subject to review.

See April 17 LOGA Member Alert for a synopsis of the applicable Court of Appeal decision.

Since the Board of Tax Appeals (BTA) designated the Avanti case as the test case for all of the similar appeals lodged with the BTA, this ruling will control in all those cases.  It also will be legal precedent, along with the Mantle case,  for all pending audits which have not made it to the stage of a Final Assessment.

We do not know how the Department of Revenue will handle all the outstanding cases, but if they do not join in a voluntary dismissal of the remaining cases before the BTA, each producer can file a Motion for Summary Judgment to get its case dismissed.  The Department can still contend that some of the remaining cases have facts which are substantially different, which put them outside of the Avanti precedent.  For example, the Department could contend that the sales contracts in a particular case were not “arm’s length” contracts with an unrelated third party, or that the purchaser paid separate and additional consideration for the sale other than the contract price.

With regard to cases still in the audit process, the producer should cite the Avanti case decision as precedent when responding to the LDR’s Notice of Proposed Assessment for those cases which have not reached the Final Assessment stage.  If a producer has received a Final Assessment, he still must appeal that decision within the time delay to preserve his right.

‍