Departments of Revenue frequently issue pronouncements, fact sheets, notices, and the like. While having guidance issued by the taxing authority is generally helpful and encouraged, Departments often forget that such documents are merely statements of their opinion. By definition, an opinion is “a view, judgement, or appraisal formed in the mind about a particular matter” – it is not the final word on that matter. See merriam-webster.com/dictionary/opinion (last visited June 15, 2025). Significantly, the Department’s opinions cannot alter or expand an existing law. This guiding principle was highlighted in a recent Mississippi Supreme Court decision.

In Mississippi Department of Revenue v. Tennessee Gas Pipeline Company, LLC, No. 2023-SA-01079-SCT (May 1, 2025), the taxpayer purchased tangible personal property outside of Mississippi for use in the State. The taxpayer then arranged for shipment of the property into Mississippi by a third party that was not the seller. Use tax was paid in Mississippi on the property, but not on the delivery charges. On audit, the Department assessed use tax on the third-party delivery charges.

On review of the controlling statutes, the Mississippi Supreme Court stated that when property is purchased from a seller and then shipped by that same seller, any freight and delivery charges are likely subject to use tax. However, as in this case, when the seller of the property and the shipper of the property are separate third parties, then such charges are not subject to use tax.

The Department made a meritless argument that the language of the statutes does not limit the Department’s authority to impose use tax on delivery charges. However, the Court refused to so broadly apply the Department’s interpretation and grant the Department authority not specifically vested by the statute.

The Department also alleged that its Fact Sheet was entitled to deference, which stated that use tax was due on delivery charges even when paid to a third-party common carrier that was not the seller. However, the Department’s argument was belied by its own Fact Sheet, which provided that “[n]othing in this fact sheet supersedes, alters, or otherwise changes any provisions of the tax law, regulations, court decisions, or notices.” Miss. Dep’t of Revenue, Delivery Charges (last revised Oct. 2017). Because the controlling statutes did not extend the Department’s authority to impose use tax on third-party delivery charges, the Department’s opinion document to the contrary did not change the Court’s conclusion.

While it is often useful for Departments to issue guidance regarding their interpretation of the tax laws, this case serves as a reminder that such guidance is just their opinion. Such opinions are not—and should not be—irrefutable.