Foote’s Dixie Dandy, Inc. v. McHenry
Arkansas Supreme Court
607 S.W.2d 323 (1980)
- Written by Darius Dehghan, JD
Facts
Foote’s Dixie Dandy, Inc. (Foote’s) (plaintiff) operated two grocery stores within a single corporation. Foote’s decided to separately incorporate one of the stores. The accountant at Foote’s asked Mr. Yates, a field auditor for the Arkansas Employment Security Division (ESD) (defendant), about the new corporation’s tax status. Foote’s had always dealt with Yates about such questions, and no problems had arisen. Yates told the accountant at Foote’s that Foote’s did not need to file any particular documents. Therefore, Foote’s did not file a request for a transfer of its unemployment record. But if Foote’s had filed this request, the new corporation would have had a low tax rate. Because Foote’s failed to file the request for transfer, the ESD assessed $20,000 in additional taxes. Foote’s filed suit to prevent the ESD from collecting the $20,000. Yates did not testify at the trial before the chancery court. The chancery court ruled in favor of the ESD. Foote’s appealed.
Rule of Law
Issue
Holding and Reasoning (Hickman, J.)
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