## Facts

- National Financial Systems, Inc. (NFS) is a non-Louisiana corporation licensed to do business in Louisiana and engaged in leasing modular banking units to banks and federally insured financial institutions for branch locations in Louisiana.
- The modular units were manufactured and used as bank buildings but were designed to be transported to a site, set in place on a concrete slab, and used for a limited term (often one or two years).
- After a lease ended, NFS typically removed the unit from the site and leased and installed it at a different location for another customer.
- The written lease documents described the units as portable and temporary and contemplated removal and relocation.
- The Louisiana Department of Revenue conducted a sales and use tax audit covering January 1, 1998 through December 31, 2000 and determined NFS received $165,132.68 in lease payments for units used in Louisiana during that period.
- NFS neither collected nor remitted Louisiana tax on those lease payments.
- Cynthia Bridges, Secretary of the Department of Revenue, sued NFS seeking recovery of $24,605.31 in taxes, $6,151.34 in delinquent penalties, plus interest, on the theory that the leases were taxable leases of tangible personal property (corporeal movables).
- NFS contested liability, arguing the units were “buildings” and should be treated as immovables, making the lease receipts not subject to the lease tax at issue.
- The trial court granted the State’s motion for partial summary judgment, holding the modular units were corporeal movables and the leases were taxable. The court designated the judgment as final under La. Code Civ. Proc. art. 1915(B).
- NFS appealed.

## Issues

1. Whether the trial court’s partial summary judgment on taxability, designated as final under La. Code Civ. Proc. art. 1915(B), was properly certified and immediately appealable.
2. Whether NFS’s modular banking units, installed temporarily and then removed and reused at other sites, were corporeal movables (making the leases taxable) rather than immovables/buildings.

## Decision

- The court held the partial summary judgment was properly certified as final and the appeal was properly before the court.
- The court affirmed the trial court’s determination that the modular banking units were corporeal movables.
- Because the units were corporeal movables, the court affirmed that NFS’s lease transactions were taxable under Louisiana sales and use tax law.
- The partial summary judgment was affirmed; remaining issues (including computation of amounts due) were left for further proceedings consistent with the partial judgment.

## Legal Principles

- A partial judgment that resolves a discrete legal issue may be designated as final under La. Code Civ. Proc. art. 1915(B) when the certification is supported by the factors identified by Louisiana courts (including whether immediate review will reduce duplicative litigation and whether unresolved claims are separable from the decided issue).
- Summary judgment is proper when there is no genuine issue of material fact and the mover is entitled to judgment as a matter of law; when the material facts are undisputed, classification of property can be decided as a legal question.
- Louisiana sales and use tax applies to leases of tangible personal property (corporeal movables); if leased property is a movable, lease receipts are taxable under the governing statutes and regulations.
- Under Louisiana property classification rules, structures intended for temporary placement and repeated relocation, and not treated as permanently attached component parts of land, may remain corporeal movables rather than becoming immovables.
- Contract language describing the leased units as portable, temporary, and intended for removal and reuse may be considered when determining whether the units are movables or immovables.

## Conclusion

The Louisiana First Circuit affirmed a certified partial summary judgment holding that NFS’s modular banking units—moved from site to site and installed only temporarily—were corporeal movables, so NFS’s Louisiana lease receipts were subject to the State’s lease tax, with further proceedings to address remaining matters such as the final amounts owed.


Bridges v. National Financial Systems, Inc., 960 So. 2d 202 (2007)