Case Name: LaCrosse Queen, Inc., Petitioner-Appellant, v. Wisconsin Department of Revenue, Respondent-Respondent-Petitioner
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1997-04-18
Citations: 208 Wis. 2d 439
Docket Number: No. 95-2754
Parties: LaCrosse Queen, Inc., Petitioner-Appellant, v. Wisconsin Department of Revenue, Respondent-Respondent-Petitioner.
Judges: 
Reporter: Wisconsin Reports Second
Volume: 208
Pages: 439–462

Head Matter:
LaCrosse Queen, Inc., Petitioner-Appellant, v. Wisconsin Department of Revenue, Respondent-Respondent-Petitioner.
Supreme Court
No. 95-2754.
Oral argument January 28, 1997. —
Decided April 18, 1997.
(Also reported in 561 N.W.2d 686.)
For the respondent-respondent-petitioner the cause was argued by Gerald S. Wilcox, assistant attorney general, with whom on the briefs was James E. Doyle, attorney general.
For the petitioner-appellant there was a brief by Paul J. Munson and McDonald & Munson, La Crosse and oral argument by Paul J. Munson.

Opinion:
DONALD W. STEINMETZ, J.
¶1. The issue in this case is whether a boat leased by La Crosse Queen, Inc. to Riverboats America, Inc. was used primarily in interstate commerce so as to exempt the gross receipts from said lease from sales tax pursuant to Wis. Stat. § 77.54(13) for the years from 1989 through 1991. Because we find that the La Crosse Queen was not engaged in interstate commerce during this time, we hold that La Crosse Queen, Inc., was not entitled to the tax exemption provided pursuant to Wis. Stat. § 77.54(13).
¶ 2. On October 14,1992, the Department of Revenue (Department) issued an assessment of sales taxes against the taxpayer on the gross receipts from the lease payments. The taxpayer appealed, claiming that such gross receipts are exempt under Wis. Stat. § 77.54(13), since the La Crosse Queen has a burden of over 50 tons and is primarily engaged in interstate commerce. The Tax Appeals Commission (Commission) and the Dane County Circuit Court, the Honorable Michael B. Torphy, both held that La Crosse Queen, Inc. was not entitled to the exemption because it was not engaged in interstate commerce. Having concluded that La Crosse Queen, Inc. was not engaged in interstate commerce, neither the Commission nor the circuit court proceeded to address the issue of whether it was "primarily" engaged in said commerce. The court of appeals reversed the circuit court decision on the grounds that the taxpayer was engaged in interstate commerce, and remanded the case to the Commission to determine if the taxpayer was "primarily" engaged in interstate commerce. La Crosse Queen, Inc. v. Wisconsin Dept. of Revenue, 201 Wis. 2d 537, 549 N.W.2d 261 (Ct. App. 1996). We now reverse the court of appeals' decision.
¶ 3. During the years in issue, 1989 through 1991, the taxpayer was the owner and lessor of a boat known as the La Crosse Queen IV (La Crosse Queen). The boat, an excursion paddle wheeler exceeding 50 tons, was leased to a related corporation, Riverboats America, Inc., for the purpose of providing sightseeing and dinner cruises exclusively on the Mississippi River. The boat is operated under Interstate Commerce Commission (ICC) authority number WC-1172 which was transferred to taxpayer in 1975 when the boat was purchased from Roy A. Franz and the business was purchased from his corporation, Big Indian Boat Lines. The taxpayer notes in its brief that until the time of deregulation, the vessel was required to file tariff charges with the Interstate Commerce Commission.
¶ 4. The previous owner of the boat, Mr. Franz, had challenged the imposition of the sales tax on its sales of tickets for the cruises on the Mississippi claiming, among other things, that the sales tax resulted in an unconstitutional burden on interstate commerce. In an opinion authored by Dane County Reserve Circuit Judge, George R. Currie, the court held that the sales tax did not burden commerce because no interstate commerce was involved in Franz's operations. Franz v. Wisconsin Dept. of Revenue, Case No. 159-122 (Dane County Cir. Ct., July 30, 1979).
¶ 5. The taxpayer's president, Linda Sayther, conceded that her method of operation and its purpose during 1989, 1990, and 1991 was "basically the same" as that of Roy Franz, her predecessor. Thus, according to the La Crosse Queen's president, the primary purpose of the La Crosse Queen's operation during the period in question was recreation, entertainment, and dining. The cruises on the La Crosse Queen were advertised as one and one-half hour cruises on the Mississippi River. It is not contested that during her excursions from 1989 through 1991, the La Crosse Queen crossed between Wisconsin and Minnesota waters on the Mississippi River.
¶ 6. The La Crosse Queen's passengers are individuals and groups from Wisconsin and other states. On her northern trip, the La Crosse Queen loads at a wharf in La Crosse, travels up the river several miles to the lock and dam north of the 1-90 bridge, turns around, and returns to the same wharf in La Crosse. Since there are no facilities where the La Crosse Queen can dock on either her northern or southern trip, the passengers never disembark until their return to the wharf in La Crosse. Thus, all passengers embark and disembark at the same dock in La Crosse, Wisconsin.
[1 — 3}
¶ 7. "Whether a person is engaged in interstate commerce is a question of law, and we review questions of law de novo." Town of LaPointe v. Madeline Island Ferry Line, Inc., 179 Wis. 2d 726, 736, 508 N.W.2d 440 (Ct. App. 1993) (citation omitted). This court may substitute our judgment for that of the Commission. See Frisch, Dudek & Slattery, Ltd. v. Wisconsin Dept. of Revenue, 133 Wis. 2d 444, 446, 396 N.W.2d 355 (Ct. App. 1986), citing Department of Revenue v. Milwaukee Refining Corp., 80 Wis. 2d 44, 48, 257 N.W.2d 855 (1977). However, this court will accord due weight to an agency decision where the agency possesses particular expertise in an area of law. See id. In the case at bar, the Commission possesses no special expertise because it has faced the task of interpreting the term "interstate commerce" in light of Wis. Stat. § 77.54(13) on only one previous occasion. Therefore, we owe the decision of the Commission no deference.
¶ 8. Tax exemption statutes "are to be strictly construed against the granting of the same, and the one who claims an exemption must point to an express provision granting such exemption by language which clearly specify the same, and thus bring himself clearly within the terms thereof." Ramrod, Inc. v. Department of Revenue, 64 Wis. 2d 499, 504, 219 N.W.2d 604 (1974), citing Fall River Canning Co. v. Department of Taxation, 3 Wis. 2d 632, 637, 89 N.W.2d 203 (1958); Comet Co. v. Department of Taxation, 243 Wis. 117, 123, 9 N.W.2d 620 (1943). Doubts are to be "resolved against the exemption and in favor of taxability." Revenue Dept. v. Greiling, 112 Wis. 2d 602, 605, 334 N.W.2d 118 (1983), citing First Nat'l. Leasing Corp. v. Madison, 81 Wis. 2d 205, 208, 260 N.W.2d 251 (1977).
¶ 9. The United States Supreme Court in Cincinnati P., B., S. & P. Packet Co. v. Bay, 200 U.S. 179 (1905) held that a contract governing a towing and barge business between various points in the state of Ohio did not involve interstate commerce simply because the boats "might sail over soil belonging to Kentucky in passing between two Ohio points." Id. at 183. Likewise, the passengers in the instant case who embark and disembark at the same point in Wisconsin are in no way involved "with commerce among the states" simply because they might sail over Minnesota waters during their excursion.
¶ 10. When the taxpayer's boat picks up passengers at the wharf in La Crosse for the purpose of an excursion cruise either up or down the Mississippi River and then returns them to the same wharf in La Crosse, it is not conducting interstate commerce or interstate business. Although the La Crosse Queen crosses over into Minnesota waters, there is no commerce or business carried on between Wisconsin and Minnesota as a result of the excursion cruises. The people who use the taxpayer's boat are not using it for the purpose of being transported from Wisconsin to Minnesota, but rather for the purpose of recreation and entertainment.
¶ 11. The court of appeals and the taxpayer in this case rely on several cases in support of the contention that the La Crosse Queen was engaged in interstate commerce during 1989, 1990, and 1991. These cases are all readily distinguishable from the case at bar.
¶ 12. In Cornell Steamboat Co. v. United States, 321 U.S. 634 (1944), the Court held that the ship's transportation from one point in New York to another point in New York traversing New Jersey waters was subject to regulation by the Interstate Commerce Commission. Similarly, in Central Greyhound Lines, Inc. v. Mealey, 334 U.S. 653 (1948), the Court held that transportation between points within the same state, New York, over routes utilizing New Jersey and Pennsylvania highways was interstate commerce. The Court provided the following definition of interstate commerce:
The term 'interstate commerce' means commerce between any place in a State and any place in another State or between places in the same State through another State, whether such commerce moves wholly by motor vehicle or partly by motor vehicle and partly by rail, express, or water.
Id. at 661 (citations omitted).
¶ 13. The travel of the La Crosse Queen is distinguishable from that of the carriers in Cornell Steamboat and Central Greyhound Lines. In this case, the purpose of the excursions on the La Crosse Queen was recreation and entertainment; it was not intended by anybody to serve as transportation. Additionally, the voyages of the La Crosse Queen were not from one point in Wisconsin to another place in Minnesota, or even from one place in Wisconsin to another place in Wisconsin. Instead, the excursions on the La Crosse Queen during the years in issue started and finished at the same dock in the same city in the same state. Such a travel pattern is not within the purview of the definition of interstate commerce established in Central Greyhound Lines.
¶ 14. The taxpayer and the court of appeals also rely on two Wisconsin cases in support of the argument that the La Crosse Queen was engaged in interstate commerce during the years in issue. Town of LaPointe v. Madeline Island Ferry Line, Inc., 179 Wis. 2d 726, 508 N.W.2d 440 (Ct. App. 1993); Washington Island Ferry Line, Inc. v. Dept. of Revenue, Wisconsin Tax Appeals Commission, Nos. 91-S-126, 91-S-385 (March 16, 1993), affd, Wisconsin Tax Reports, CCH ¶ 400-029 (Dane County Cir. Ct., December 4, 1993). In each of these cases, the respective courts held that the ferry was engaged in interstate commerce even though it traveled between two points in the same state, Wisconsin. However, the service of each ferry was "an absolute necessity because an interstate vehicular traveler cannot complete a journey to or from the island without taking the Ferry." Madeline Island Ferry, 179 Wis. 2d at 738. In each case, the ferry had contracts with the United States Postal Service, United Parcel Service (UPS), and Federal Express. Each ferry also served as the sole means of transportation for cars, buses, cargo, and people between the mainland and the island. In each case, the ferry was a necessary link in completing the chain of interstate commerce. See id. at 729.
¶ 15. The activity of the La Crosse Queen can be readily distinguished from that involved in these other Wisconsin cases. First and foremost, the purpose of the La Crosse Queen's excursions is different from that of the Madeline Island Ferry and the Washington Island Ferry. The movement of the La Crosse Queen in interstate waters is not for the purpose of facilitating commerce among the States. Passengers embark on the La Crosse Queen for entertainment and recreation, not for transportation from one point to another. Further, the voyages of the La Crosse Queen do not constitute a necessary link for the completion of an interstate journey. The La Crosse Queen's journey ends where it begins, with no stops in between. Her voyages do not constitute interstate commerce.
¶ 16. The activities of the La Crosse Queen are best compared to those of the taxicabs in the case of United States v. Yellow Cab Co., 332 U.S. 218 (1947), overruled on other grounds by Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984). Yellow Cab involved an action under the Sherman Anti-Trust Act by the United States against Yellow Cab and others for relief against an alleged monopoly conspiracy. In discussing the theory that interstate commerce may have been involved when taxicabs in Chicago were used to transport people and luggage to and from railroad stations, the Court stated as follows:
We hold, however, that such transportation is too unrelated to interstate commerce to constitute a part thereof. . . . [I]n transporting passengers and their luggage to and from Chicago railroad stations. . .their service is confined to transportation 'between any two points within the corporate limits of the City.'
Id. at 230-231. The Court proceeds to explain that "[I]n short, their relationship to interstate transit is only casual and incidental." Id. at 231.
¶ 17. If the taxicabs described above were not engaged in interstate commerce, then certainly the activities of the La Crosse Queen do not constitute interstate commerce. Like the cabs, the service of the La Crosse Queen is confined to only one city, and not even to two separate points within that same city. The relationship of the La Crosse Queen to interstate commerce is, at best, "casual and incidental." The excursions on the La Crosse Queen are not a necessary link in the interstate travels of her passengers.
¶ 18. In order for an activity to qualify as interstate commerce, there must not only be interstate movement but also interstate business. There was none here involved. See Mayor of Vicksburg v. Streckfus Steamers, 150 So. 215, 218 (Miss. 1933). See also Meyer v. St. Louis County, 602 S.W.2d 728, 738 (Mo. App. 1980). The taxpayer's boat is not involved in the transfer of any goods, money, or people from Wisconsin to any other state. The simple fact that persons from other states take excursions on the La Crosse Queen does not result in those persons being involved in the stream of interstate commerce. The voyages of the passengers start and finish in the same place. While this may be considered "interstate travel," it is not sufficient to rise to the level of "interstate commerce."
¶ 19. Because we find that the La Crosse Queen was not engaged in interstate commerce during the years in issue, we hold that La Crosse Queen, Inc., was not entitled to the tax exemption provided pursuant to Wis. Stat. § 77.54(13). Since we have determined that the La Crosse Queen is not involved in interstate commerce, it is unnecessary for us to discuss whether the vessel is "primarily" engaged in interstate commerce.
By the Court. — The decision of the court of appeals is reversed.
Wis. Stat. § 77.54(13) exempts from taxes "[t]he gross receipts from the sales of and the storage, use or other consumption in this state of commercial vessels and barges of 50-ton burden or over primarily engaged in interstate or foreign commerce or commercial fishing, and the accessories, attachments, parts and fuel therefor."
See Washington Island Ferry Line, Inc. v. Dept. of Revenue, Wisconsin Tax Appeals Commission, Nos. 91-S-126, 91-S-385 (March 16, 1993), aff'd, Wisconsin Tax Reports, CCH ¶ 400-029 (Dane County Cir. Ct., December 4,1993).