2021 WI App 86

COURT OF APPEALS OF WISCONSIN

PUBLISHED OPINION

Case No.: 2020AP1683

Complete Title of Case: 

† Petition for Review filed

CITATION PARTNERS, LLC,

PETITIONER-RESPONDENT,†

V.

WISCONSIN DEPARTMENT OF REVENUE,

RESPONDENT-APPELLANT.

Opinion Filed: November 23, 2021

Submitted on Briefs: June 9, 2021

Oral Argument: 

JUDGES: Donald, P.J., Dugan and White, JJ.

Concurred:

Dissented:

Appellant

ATTORNEYS: On behalf of the respondent-appellant, the cause was submitted on the 

brief of Anthony D. Russomanno, assistant attorney general, and 

Joshua L. Kaul, attorney general. 

Respondent

ATTORNEYS: On behalf of the petitioner-respondent, the cause was submitted on the 

brief of Frederic J. Brouner, Megan A. Senatori, and J. Wesley 

Webendorfer of DeWitt LLP of Madison. 
2021 WI App 86

COURT OF APPEALS

DECISION

DATED AND FILED

November 23, 2021

Sheila T. Reiff

Clerk of Court of Appeals

NOTICE

This opinion is subject to further editing. If 

published, the official version will appear in 

the bound volume of the Official Reports. 

A party may file with the Supreme Court a 

petition to review an adverse decision by the 

Court of Appeals. See WIS. STAT. § 808.10 and 

RULE 809.62. 

Appeal No. 2020AP1683 Cir. Ct. No. 2019CV612

STATE OF WISCONSIN IN COURT OF APPEALS

CITATION PARTNERS, LLC,

PETITIONER-RESPONDENT,

V.

WISCONSIN DEPARTMENT OF REVENUE,

RESPONDENT-APPELLANT.

APPEAL from orders of the circuit court for Dodge County: 

MARTIN J. DeVRIES, Judge. Reversed and cause remanded with directions. 

Before Donald, P.J., Dugan and White, JJ. 

¶1 DONALD, P.J. Citation Partners, LLC is in the business of leasing 

aircraft. At issue in this case is whether the total amount paid for an aircraft lease 

is subject to sales tax, or, if portions of a lease payment attributed to aircraft

maintenance and engine maintenance are statutorily exempt from sales tax. The 
No. 2020AP1683

2

Tax Appeals Commission agreed with the Wisconsin Department of Revenue that 

sales tax applies to the total amount paid on a lease. The circuit court, however, 

reversed the Commission’s decision and found that portions of a lease payment for 

aircraft maintenance and engine maintenance are exempt from sales tax. 

¶2 As discussed below, based on the plain language of the statutes and 

the particular facts of this case, we conclude that the total amount paid on a lease is 

subject to sales tax without any deductions for aircraft maintenance or engine 

maintenance. Sales tax cannot be avoided by dividing up a lease price into 

categories or affixing labels. We therefore reverse the circuit court’s orders and 

remand with instructions to affirm the Commission’s decision. 

BACKGROUND

Stipulated Facts1

¶3 Citation Partners owns a Cessna Citation aircraft which it leases to 

related parties as well as to unrelated third parties (collectively, the “Lessees”) 

pursuant to an Aircraft Dry Lease. The Dry Lease requires Citation Partners to 

schedule and pay for all repairs and maintenance, and in turn, requires the Lessees 

to “reimburse” Citations Partners for their share of those costs. In addition to the 

Dry Lease, each Lessee also executes a Side Agreement, which details the rates the 

Lessees pay to Citation Partners. 

 

1

 The parties stipulated to the following relevant facts before the Tax Appeals 

Commission.
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¶4 On July 1, 2014, Wisconsin Act 185 took effect. Act 185 exempts 

from sales tax various “types of services,” including the repair, service, and 

maintenance of any aircraft or aircraft parts, and “the sale of” parts used to modify 

or repair aircraft. 2013 Wis. Act 185, §§ 1, 3; see also WIS. STAT.

§§ 77.52(2)(a)10., 77.54(5)(a)3. (2019-20).2

¶5 Prior to Act 185, Citation Partners collected sales tax on the entire 

lease price of the aircraft, including aircraft maintenance and engine maintenance 

costs. After Act 185 took effect, beginning in November 2014, Citation Partners no 

longer collected sales tax on the portion of the Lessees’ payments attributed to 

aircraft maintenance and engine maintenance. Citation Partners also changed its 

invoicing procedures so that both aircraft maintenance and engine maintenance 

costs were specifically identified.3 In addition, Citation Partners applied to the 

Department for a refund of the sales tax collected for aircraft maintenance and 

engine maintenance between July 1, 2014 and October 31, 2014, which was 

granted.4 

¶6 Subsequently, the Department conducted a field audit of Citation 

Partners. Following the field audit, the Department issued a tax assessment, which 

included, but was not limited to, the sales tax that was not collected for aircraft 

maintenance and engine maintenance costs from November 1, 2014, through 

 

2

 All references to the Wisconsin Statutes are to the 2019-20 version unless otherwise 

noted.

3

 Previously, only the engine maintenance costs were specifically identified. 

4

 Citation Partners issued credit memos to all Lessees to reflect the refund from the 

Department. 
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4

December 31, 2015. The assessment also sought to recover the amounts previously 

refunded. 

¶7 Citation Partners filed a petition for redetermination of the 

assessment, which the Department denied. 

Tax Appeals Commission Decision

¶8 Citation Partners sought administrative review by the Tax Appeals 

Commission. 

¶9 On December 4, 2019, the Commission issued a decision affirming 

the Department’s decision. The Commission first found that the Lessees’ payments 

to Citation Partners for repairs and maintenance were not “reimbursements.” 

Rather, Citation Partners was “expressly responsible for the repairs and 

maintenance.” 

¶10 The Commission next turned to the language of the sales tax statutes, 

WIS. STAT. §§ 77.52(1)(a), 77.51(15b)(a). The Commission stated that “tax is 

levied upon the sales price of the lease” and “[s]ales price is defined as the ‘full 

consideration’ for which tangible property is leased, with no deduction for costs or 

other expenses of the seller.” 

¶11 The Commission concluded that the “full amount charged and paid to 

[Citation Partners] by its Lessees” is subject to sales tax. The Commission stated 

that “[w]hile Act 185 may apply to [Citation Partner’s] purchase of aircraft 

maintenance services and repair parts, it does not apply to any portion of the 

subsequent lease payments to [Citation Partners] from its Lessees.” The 

Commission explained that “[s]ales price is the total consideration received without 

any reduction for such expenses of the seller” and “[t]he cost of maintenance 
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services and repair parts is an expense of the seller which is not to be deducted from 

the ‘sales price’ of the leases.” 

Circuit Court Decision

¶12 Citation Partners filed a petition for WIS. STAT. ch. 227 judicial 

review of the Commission’s decision in the Dodge County Circuit Court. 

¶13 On August 20, 2020, the circuit court reversed the Commission. In a 

written decision, the circuit court found that the “reimbursements” for engine 

maintenance and aircraft maintenance made to Citation Partners by the Lessees 

between July 1, 2014, and December 31, 2015, were exempt from sales tax. The 

court found that Citation Partners was an “agent” for its Lessees when it purchased 

repairs, maintenance, and parts for the aircraft, thus, Citation Partners was entitled 

to a sales tax exemption. In addition, the court stated that the legislative history 

supported an exemption because the “intent was to not tax aircraft repairs, 

maintenance and parts sales[.]” 

¶14 A supplemental order was entered on September 21, 2020 reiterating 

that the Commission’s ruling was reversed. The order also added that the 

Department’s sales tax assessment against Citation Partners was set aside and 

abated. The Department appeals. 

DISCUSSION

¶15 On appeal, the Department argues that Citation Partners was required 

to collect sales tax on the total amount paid on an aircraft lease without any 

deductions. Citation Partners responds that any payments for engine maintenance 

and aircraft maintenance are exempt from sales tax. The resolution of this issue 

requires us to interpret and apply Wisconsin’s sales tax law. We first discuss the 
No. 2020AP1683

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general principles of statutory interpretation and the applicable standard of review. 

We then turn to the specific statutes at issue and conclude that under the particular 

facts of this case the portions of a lease payment for engine maintenance and aircraft 

maintenance are not exempt from sales tax based on the plain language of the 

statutes. 

A. Principles of Statutory Interpretation and Standard of Review

¶16 “Statutory language is given its common, ordinary, and accepted 

meaning, except that technical or specially-defined words or phrases are given their 

technical or special definitional meaning.” State ex rel. Kalal v. Circuit Ct. for 

Dane Cnty., 2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110. We interpret 

statutory language “in the context in which it is used; not in isolation but as part of 

a whole; in relation to the language of surrounding or closely-related statutes; and 

reasonably, to avoid absurd or unreasonable results.” Id., ¶46. If the meaning of a 

statute is plain, we ordinarily stop our inquiry and apply the words chosen by the 

legislature. Id., ¶45. 

¶17 “In an appeal following a decision of the Tax Appeals Commission, 

we review the Commission’s decision, not the circuit court’s.” Arty’s, LLC v. DOR, 

2018 WI App 64, ¶13, 384 Wis. 2d 320, 919 N.W.2d 590 (citation omitted). 

Statutory interpretation presents a question of a law. Healthcare Servs. Grp., Inc. 

v. DOR, 2018 WI App 48, ¶10, 383 Wis. 2d 699, 916 N.W.2d 635. An 

administrative agency’s conclusions of law are reviewed de novo. Tetra Tech EC, 

Inc. v. DOR, 2018 WI 75, ¶84, 382 Wis. 2d 496, 914 N.W.2d 21. 

¶18 However, “[a]s ‘a matter of persuasion, not deference,’ we ... give 

‘respectful,’ ‘due weight’ consideration to ‘the experience, technical competence, 

and specialized knowledge of the agency involved, as well as discretionary authority 
No. 2020AP1683

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conferred upon it,’ because ‘administrative agencies can sometimes bring unique 

insights to the matters for which they are responsible.’” Arty’s, 384 Wis. 2d 320, 

¶13 n.5 (citations omitted). 

¶19 The Department asserts that its views and the Commission’s views of 

sales tax law “should be given appropriate respect.” The Department notes that it 

“exercise[s] general supervision over the administration of the assessment and tax 

laws of the state.” See WIS. STAT. § 73.03(1). Additionally, the Department states 

that the Commission is “the final authority for the hearing and determination of all 

questions of law and fact on relevant tax issues at the administrative level.” See

WIS. STAT. § 73.01(4)(a). 

¶20 In contrast, Citation Partners argues that we should not give the 

Department’s or the Commission’s perspective “any special persuasive value.” 

Citation Partners suggests that “the Department has not pointed to any specific 

experience or expertise that either it or the Commission possesses regarding ... the 

sales tax exemption created by Act 185[.]” 

¶21 We agree with Citation Partners regarding the standard of review. “If 

an agency brings to court nothing but a rote recitation of its background with the 

subject matter, it should not expect the statutory directive to give its argument extra 

heft.” Tetra Tech EC, 382 Wis. 2d 496, ¶79. Accordingly, we review the 

Commission’s decision de novo. 
No. 2020AP1683

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B. Wisconsin’s Sales Tax Law

¶22 Wisconsin’s sales tax law is set forth in WIS. STAT. ch. 77. 

WISCONSIN STAT. § 77.52(1)(a) provides that the lease of tangible personal 

property, such as an aircraft,5is subject to a five percent sales tax:

For the privilege of selling, licensing, leasing or 

renting tangible personal property at retail a tax is imposed 

upon all retailers at the rate of 5 percent of the sales price 

from the sale, license, lease or rental of tangible personal 

property sold, licensed, leased or rented at retail in this state, 

as determined under s. 77.522. 

¶23 The five percent sales tax applies to the “sales price” of a lease. WIS.

STAT. § 77.52(1)(a). “Sales price” is defined as the “total amount of consideration” 

for which the property is leased. WIS. STAT. § 77.51(15b)(a). There is not any 

deduction from the sales price for the following:

1. The seller’s cost of the property or items, property, or 

goods under s. 77.52(1) (b), (c), or (d) sold. 

2. The cost of materials used, labor or service cost, interest, 

losses, all costs of transportation to the seller, all taxes 

imposed on the seller, except as provided in par. (b) 

3m. and 3s., and any other expense of the seller.

Sec. 77.51(15b)(a)1.-2. (emphasis added). Thus, the plain language of the statutes 

provides that a five percent sales tax is applied to the “total amount of consideration” 

received without any deduction for costs or expenses. 

¶24 Accordingly, here, sales tax applies to the total amount paid on an 

aircraft lease. There is not any deduction for the portions of a lease attributed to 

 

5

 Citation Partners does not dispute that an aircraft constitutes tangible personal property. 

Further, such an argument would lack merit. A “retailer” in WIS. STAT. § 77.52 includes anyone 

“making any retail sale of a[n] ... aircraft[.] WIS. STAT. § 77.51(13)(am). A retail sale means any 

lease. WIS. STAT. § 77.51(13rm). 
No. 2020AP1683

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aircraft maintenance or engine maintenance, which are the costs and expenses of 

running an aircraft leasing business. Citation Partners cannot avoid taxation by 

dividing up its lease price into categories and affixing labels. See generally 

Milwaukee Gas Light Co. v. Wisconsin Dep’t of Tax’n, 23 Wis. 2d 195, 205, 127 

N.W.2d 64 (1964) (stating that “labels do not and should not determine” taxability 

for the purposes of state income). If this were the case, parties could avoid taxation 

by merely changing how they labeled their transactions. 

¶25 Citation Partners argues that the Lessees’ payments for aircraft 

maintenance and engine maintenance are not included in the sales price of a lease 

because Citation Partners received “no benefit and no profit” from the payments. 

However, as the Department asserts, Citation Partners did receive “a benefit: it 

maintains its aircraft so that it can lease it[.]” Moreover, nothing in the statutes 

states that sales tax is only assessed against a “profit.” As stated above, the statutes 

expressly provide that sales tax applies to the “total amount of consideration” for 

which an aircraft is leased without any deduction for costs and expenses. See WIS.

STAT. §§ 77.51(15b)(a).

C. Act 185 Exemptions

¶26 Citation Partners argues that Act 185 exempts the Lessees’ payments 

for engine maintenance and aircraft maintenance from sales tax. Again, we 

disagree. 

¶27 “Tax exemption statutes are strictly construed against granting an 

exemption.” Southwest Airlines Co. v. DOR, 2021 WI 54, ¶24, 397 Wis. 2d 431, 

960 N.W.2d 384. “A strict construction, however, does not mean we give the statute 

the narrowest possible reading or an unreasonable construction.” Covenant 

Healthcare Sys., Inc. v. City of Wauwatosa, 2011 WI 80, ¶22, 336 Wis. 2d 522, 
No. 2020AP1683

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800 N.W.2d 906. “[W]e apply a ‘strict but reasonable’ interpretation to tax 

exemption statutes.” Id. (citation omitted). The party seeking an exemption bears 

the burden of proving its entitlement and any ambiguity is resolved in favor of 

taxation. Columbus Park Hous. Corp. v. City of Kenosha, 2003 WI 143, ¶11, 267 

Wis. 2d 59, 671 N.W.2d 633. 

¶28 Based on these principles, we are not persuaded by Citation Partners’ 

argument. “Reading a statute ‘strictly but reasonably’ ... does not allow us to read 

language into [a] statute that is not present.” Southwest Airlines, 397 Wis. 2d 431, 

¶27. 

¶29 Wisconsin Act 185 amended WIS. STAT. § 77.52(2)(a)10. See 2013 

Wis. Act 185, § 1. Section 77.52(2)(a)10., as amended, exempts certain “types of 

services” from sales tax:

(2)(a) The tax imposed herein applies to the following types 

of services:

....

10. Except for the repair, service, alteration, fitting, cleaning, 

painting, coating, towing, inspection, and maintenance of 

any aircraft or aircraft parts ....

This section does not exempt a lease from sales tax. 

¶30 Wisconsin Act 185 also recreated WIS. STAT. § 77.54(5)(a)3. See 

2013 Wis. Act 185, § 3. Section 77.54(5)(a)3. exempts the “sale of” parts used to 

modify or repair aircraft from sales tax:

There are exempted from the taxes imposed by this 

subchapter:

....

(5) The sales price from the sale of and the storage, use or 

other consumption of:
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.... 

(a)3. Parts used to modify or repair aircraft.

Once again, this section does not exempt a lease from sales tax.

¶31 Thus, we conclude that Citation Partners has failed to show that it is 

“clearly” entitled to an exemption. See Southwest Airlines, 397 Wis. 2d 431, ¶26. 

While the direct purchase of a repair or maintenance service or of an aircraft part 

may qualify for a sales tax exemption, leases are not exempt from sales tax under 

the statutes. It would be error for us to read into the statutes an exemption that the 

legislature did not include. Id., ¶29. 

¶32 In addition, Citation Partners argues that it is an “agent of the 

Lessees.” However, we agree with the Department that whether Citation Partners 

is an agent is irrelevant. As stated above, the sales tax exemptions do not cover 

leases.

¶33 Finally, Citation Partners argues that we should consider the 

legislative history of Act 185. Typically, if the meaning of a statute is plain, we 

stop our inquiry. See Kalal, 271 Wis. 2d 633, ¶45. Sometimes, however, courts 

may consider legislative history to confirm a plain-meaning interpretation or when 

a plain-meaning interpretation produces an absurd result. See Teschendorf v. State 

Farm Ins. Cos., 2006 WI 89, ¶¶14-15, 293 Wis. 2d 123, 717 N.W.2d 258. 

¶34 Here, even if we assume that it is appropriate to consult legislative 

history, the legislative history Citation Partners cites does not support its argument. 

Citation Partners asserts that the legislature intended that the sales tax exemptions 

include small businesses. Citation Partners, however, does not point to anything 

establishing that the exemptions were meant to expand to include leases.
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¶35 Therefore, for the reasons stated above, we reverse the circuit court’s 

orders and remand with directions to affirm the Commission’s decision.

By the Court.—Orders reversed and cause remanded with directions.