Title: In re Picket Fence Preview

State: vermont

Issuer: Vermont Supreme Court

Document:

In re Picket Fence Preview (2001-037); 173 Vt. 369; 795 A.2d 1242

[Filed 22-Mar-2002]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal  revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of  Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any  errors in order that corrections may be made before this opinion goes
  to press.

                                No. 2001-037

In re Picket Fence Preview	                 Supreme Court

                                                 On Appeal from
                                                 Chittenden Superior Court

                                                 October Term, 2001

Matthew I. Katz, J.

Thomas C. Nuovo of Bauer, Anderson & Gravel, Burlington, for 
  Plaintiff-Appellant.

William H. Sorrell, Attorney General, and John M. Bagwell, Special 
  Assistant Attorney General, Montpelier, for Defendant-Appellee.

PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.

       AMESTOY, C.J.   Taxpayer, Picket Fence Preview, appeals the Chittenden
  Superior Court  order affirming the Commissioner's determination that
  taxpayer is not exempt from use tax, pursuant  to 32 V.S.A. § 9741(15). 
  Taxpayer argues that: (1) the superior court erred in its interpretation of
  §  9741(15); (2) the superior court's finding that taxpayer is not a
  newspaper was erroneous; and (3)  imposition of use tax violates the First
  Amendment and the Equal Protection Clause of the  Fourteenth Amendment to
  the United States Constitution and the Common Benefits Clause and  freedom
  of speech and of the press guarantees of the Vermont Constitution.  We
  affirm.

 

       Taxpayer is a for-sale-by-owner guide, consisting primarily of real
  estate listings,  published  monthly and distributed free of charge in
  northern Vermont.  On average, 10% of each publication  includes articles,
  features, and community notices.  The bound publication is printed on eight
  and  one-half by eleven inch coated paper.  The cover includes a color
  photograph of a listed property  with the signature image of a picket fence
  across the bottom.  Taxpayer's Registration and Vermont  Business Account
  Number Application, filed in 1995, described taxpayer's business as
  "desktop  publishers of for sale by owner real estate magazine."  In
  January 1999, taxpayer amended the  application to describe the publication
  as a newspaper.  The publication is printed in Canada and  pays neither
  Vermont sales nor use tax. 

       Vermont assesses use tax on tangible personal property used, stored,
  and consumed within  the state on which sales tax has not been paid.  32
  V.S.A. § 9773.  Certain sales are exempt from the  tax.  32 V.S.A. § 9741. 
  Following an audit in 1998, the Department of Taxes assessed taxpayer a use 
  tax of $10,086.81, plus interest and underpayment penalty, for the printing
  of its publication from the  period January 1, 1995, through December 31,
  1997.  At a July 1999 hearing, taxpayer challenged  the assessment on the
  basis that it should be considered a newspaper and be exempt from use tax. 
  The Commissioner determined that taxpayer is not a newspaper and affirmed
  the assessment.   Taxpayer appealed the Commissioner's determination to the
  superior court.  The superior court  affirmed, and this appeal followed.

       Taxpayer argues on appeal that the superior court erred in upholding
  the Commissioner's  interpretation of 32 V.S.A. § 9741(15), that taxpayer
  should fall within the definition of "newspaper"  for the purposes of the
  use tax exemption, and that the imposition of the use tax violates
  provisions  of the United States and Vermont Constitutions.  We review the
  case under the same standard as 

 

  applied in the intermediate appeal to the superior court.  Thus, we will
  not set aside the  Commissioner's findings of fact unless clearly
  erroneous.  Rock v. Dep't of Taxes, 170 Vt. 1, 5,