Opinion ID: 1280823
Heading Depth: 1
Heading Rank: 3

Heading: Resolution of the Controversy.

Text: Clearly, the county and municipal taxes involved are without legal authority. Rural electric cooperatives are exempt from state, county and municipal sales taxes. See, 18 O.S. 1981 § 437.25 and Branch, supra . The refund of all taxes, including county and municipal taxes, is predicated upon a retroactive application of Branch. I agree with the majority opinion and would apply Branch retroactively as to the State sales taxes. Retroactive application provides a remedy for recovery of unauthorized State sales taxes paid under protest, and the State has made no showing that retroactive application would curtail the delivery of governmental services. Retroactive application of Branch to counties and municipalities is a different matter. Regurgitation of literally millions of dollars by counties and municipalities is no small inconvenience. The Tax Commission's affidavit identifies approximately one-hundred and seventy-seven cities and twenty-four counties that would be required to contribute to the refund amount. The litigation against the respective cities and counties for the enforcement of the refund would consume additional tax dollars. The majority's citation of Chevron Oil Company v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971) and Griggs v. State, 702 P.2d 1017 (Okla. 1985) shows that a court must weigh the probable inequity of the retroactive application of a principle of law. Those citizens who paid the sales taxes received the benefit of governmental services when their respective counties and municipalities included those taxes in their fiscal budgets. Any refund of those taxes must come from those same governmental entities. Okla. Const. Art. 10 § 20. According to the argument of the Tax Commission these refund amounts would come from the current sales tax revenues of those counties and cities, a potentially disastrous consequence for the fiscal stability of several of the political subdivisions. In my view, the refunds would instead be required to come from the appropriate sinking funds  likely requiring raising the taxes of those very taxpayers receiving a refund. In either scenario the communities would be subject to litigation and fiscal turmoil with little net relief to the individual taxpayer. Thus, I would end this controversy now and hold that Branch will be held retroactive only as to the State, but prospective as to counties and municipalities.