Title: American Auto. Ass'n, Inc. v. Bureau of Revenue

State: new-mexico

Issuer: New Mexico Supreme Court

Document:

541 P.2d 967 (1975) 88 N.M. 402 AMERICAN AUTOMOBILE ASSOCIATION, INC., Petitioner, v. BUREAU OF REVENUE of the State of New Mexico, Respondent. No. 10528. Supreme Court of New Mexico. October 3, 1975. Rehearing Denied November 3, 1975. Robert L. Christensen, Albuquerque, Zinn & Donnell, Dean S. Zinn, Santa Fe, Chavez & McDonald, Tibo J. Chavez, Belen, for petitioner. Toney Anaya, Atty. Gen., Vernon O. Henning, Joseph T. Sprague, Asst. Attys. Gen., Santa Fe, for respondent. McMANUS, Chief Justice. This matter is before the court for the second time, this time being pursuant to a writ issued to the Court of Appeals of the State of New Mexico on July 2, 1975. By majority of this court in the first cause we reversed the Court of Appeals on the basis that the American Automobile Association, Inc. (A.A.A.) was a non-profit organization, contrary to the opinion of the Court of Appeals. American Automobile Ass'n, Inc. v. Bureau of Revenue, 87 N.M. 330, 533 P.2d 103 (1975). In that case, we concluded as follows: Subsequently, on April 23, 1975, the Court of Appeals rendered its second opinion, American Automobile Ass'n, Inc. v. Bureau of Revenue, 88 N.M. 148, 538 P.2d 420 (Ct.App. 1975), stating: The applicable statute is § 72-16A-12.27, N.M.S.A. 1953 (Repl.Vol. 10, pt. 2, 1973), which reads: In the cause before us now, A.A.A. presents the following questions for review: (1) Did the Court of Appeals err in holding that petitioner is not a business organization within the meaning of § 72-16A-12.27, supra? (2) Did the Court of Appeals err in failing to pass on the issue of whether the receipts involved in petitioner's activities are from dues and registration fees, on the ground that the "business organization" issue is dispositive, notwithstanding the mandate and order of this court in its former opinion, supra? (3) Did the Court of Appeals err in failing to grant a motion for rehearing? At a hearing before the Commissioner of Revenue, on July 16, 1973, Mr. Mallory, General Manager of the New Mexico Division of American Automobile Association, testified in part as follows: In addition, Mr. Mallory testified that the A.A.A. is nonprofit with no direct benefits to any employee of monetary gains. Further in the hearing proceedings, Mallory testified: Webster's Third New International Dictionary (1966) contains the following definitions: In our opinion, A.A.A. is a "business organization" in the common understanding of that term. It is a group of people that has a more or less constant membership, a body of officers, a purpose, and a set of regulations. This group engages in a commercial activity, even though it is a nonprofit activity. It is not necessary for all of the members to engage in business in order for a group to constitute a business organization. We conclude from the testimony quoted and the definitions given that A.A.A. is a nonprofit business organization under § 72-16A-12.27, supra. The second point raised by A.A.A. refers to the question of whether or not the receipts involved in petitioner's activities are from dues and registration fees. Even though the Court of Appeals failed to pass on this question, we will do so. We hold from the testimony quoted that the receipts involved are from dues and registration fees. It is not necessary to discuss the third point of A.A.A. in view of our disposition of this matter. The decision of the Court of Appeals is reversed. It is so ordered. STEPHENSON, MONTOYA and SOSA, JJ., concur. OMAN, J., dissenting. OMAN, Justice (dissenting). *971 As observed in the majority opinion, this is the second time this cause has been before us upon a writ of certiorari directed to the New Mexico Court of Appeals. On the first occasion I disagreed with the majority, because I am of the opinion that the prior decision of the Court of Appeals was correct. American Automobile Ass'n, Inc. v. Bureau of Revenue, 87 N.M. 330, 533 P.2d 103 (1975). That court has now reached the same result it reached in its prior opinion, but for a different reason. American Automobile Ass'n, Inc. v. Bureau of Rev., 86 N.M. 569, 525 P.2d 929 (Ct.App. 1974); American Automobile Ass'n, Inc. v. Bureau of Revenue, 88 N.M. 148, 538 P.2d 420 (Ct.App. 1975). I again concur in that result and in the reasoning advanced by the Court of Appeals in its latest opinion in support of that result. In addition to the reasoning of the Court of Appeals, with which I agree, I particularly point out, as did the Court of Appeals in its latest opinion [American Automobile Ass'n, Inc. v. Bureau of Revenue, 88 N.M. 148, 538 P.2d 420 (Ct.App. 1975)], that the term "business organization," as used in § 72-16A-12.27, N.M.S.A. 1953 (Repl.Vol. 10, pt. 2, Supp. 1973), is not defined in the statute and is ambiguous. Since this is a case involving an exemption from taxation we are bound by the following principles of construction: (1) Taxation is the rule, and exemption therefrom is the exception. Flaska v. State, 51 N.M. 13, 177 P.2d 174 (1946). (2) A statutory exemption from taxation must be strictly construed against the person claiming the exemption and in favor of the taxing authority. McKee v. Bureau of Revenue, 63 N.M. 185, 315 P.2d 832 (1957); Peisker v. Unemployment Compensation Commission, 45 N.M. 307, 115 P.2d 62 (1941); Samosa v. Lopez, 19 N.M. 312, 142 P. 927 (1914); Rock v. Commissioner of Revenue, 83 N.M. 478, 493 P.2d 963 (Ct.App. 1972). (3) Exemptions from taxation are never presumed, and the burden is on one claiming an exemption to clearly establish a right to that exemption. Flaska v. State, supra; Iden v. Bureau of Revenue, 43 N.M. 205, 89 P.2d 519 (1939); Rock v. Commissioner of Revenue, supra; Reed v. Jones, 81 N.M. 481, 468 P.2d 882 (Ct.App. 1970). (4) A legislative intention to create an exemption from taxation must be expressed in clear and unambiguous language. Flaska v. State, supra; Reed v. Jones, supra. (5) A claim of exemption from taxation should be sustained only if it comes within the express letter or necessary scope of the exempting language. McKee v. Bureau of Revenue, supra; Samosa v. Lopez, supra. Guided by these rules of construction, which have long been recognized by the courts of this state, I am unable to construe the language in question as embracing the petitioner. For all the reasons stated by the Court of Appeals, and for the additional reasons herein stated, I respectfully dissent.