Opinion ID: 2010922
Heading Depth: 1
Heading Rank: 4

Heading: Respondent's Interpretation.

Text: Respondent contends: 1. That popcorn and soft drinks are not meals, food, food products or beverages; 2. That the theater is not engaged in the business of preparing food or beverages; 3. That a theater does not prepare food or beverages; and 4. That a theater is not a restaurant, hotel, cafe, bar, caterer, lunch counter, wagon, or other similar establishment. Each argument will be considered separately. 1. It is respondent's position that popcorn and soft drinks are confections and that confections are not taxable under the selective sales tax. Webster's Third New International Dictionary, Unabridged, 1967 (hereinafter referred to only as Webster's), contains the following definition of confection: 1. Mixture: a preparation esp. for human consumption made by mixing diverse ingredients: . . . a preparation of fruits, nuts, roots, or other morsels with sugar . . . . That same source defines food as: 1a: material consisting of carbohydrates, fats, proteins, and supplementary substances (as minerals, vitamins) that is taken or absorbed into the body of an organism in order to sustain growth, repair, and all vital processes and to furnish energy for all activity of the organism . . . Even if popcorn qualified as a confection, and it does not appear that it should, confections are still food, and they would certainly be considered so by most reasonably well-informed persons. Webster's also defines beverage: 1. Liquid for drinking: esp. such liquid other than water (as tea, milk, fruit juice, beer) usu. prepared (as by flavoring, heating, admixing) before being consumed . . . . There can be no doubt that the ordinary meaning given to the word beverage includes such items as soft drinks. 2. Respondent contends that a theater is engaged in the business of entertaining and not in the business of preparing food or beverages. It is conceded that a theater is primarily in the entertainment business, but the statute does not say  primarily engaged in the business; it merely says engaged in the business. The legislature intended the phrase engaged in the business of preparing food or beverages to have a broad meaning. If theaters were not within the meaning of the phrase, it would logically follow that food and beverages prepared and sold in department stores, drugstores, bowling alleys, bus terminals, on trains and in planes, in conjunction with these other business activities, also would escape taxation. Any business only incidentally engaged in the business of preparing food or beverages, but primarily engaged in another business activity, would be able to prepare and sell meals, food, food products and beverages without any sales tax liability. Under such a theory, theaters could prepare and sell full course meals without any sales tax liability. Respondent further contends that refreshments are provided to theater patrons merely as a convenience or as a service. However, the record is replete with evidence that the refreshment stands are high-profit endeavors. It is difficult to believe that refreshment stands would still be operated if they did not contribute to the income of the theater. We hold that selling of popcorn and beverages at a theater constitutes business as that word is ordinarily used by reasonably well-informed persons. 3. Respondent next contends that it does not prepare food or beverages. The trial judge stated: I don't think the legislature intended that the least `preparation' of an item suddenly changed the character of the vendor. If this is what the statute means, then it should simply state that anyone who prepares and sells food products for direct human consumption on or off the premises must pay or collect tax on such sales. To say that preparation does not include the least preparation is to fly directly in the face of the plain meaning of the word prepare. Webster's defines prepare: 1a: to make ready beforehand for some purpose: put into condition for a particular use, application, or disposition . . . b: to make ready for eating . . . . There can be no doubt that the clear and unambiguous meaning of prepare includes the operation involved in converting raw grain popcorn into the edible version of the food. We think conversion of soft drink syrup into a beverage involves preparation. The syrup is mixed with water and gas to form the ultimate beverage. This involves putting the syrup into condition for the ultimate use which is drinking. 4. Finally, respondent contends that a theater is not a restaurant, hotel, cafe, bar, caterer, lunch counter, wagon, or other similar establishment. It is necessary to expand respondent's argument somewhat. The contention is that even if a theater is engaged in the business of preparing food or beverages, a theater is not similar in nature to the enumerated members of the class mentioned prior to the use of the general term other establishments. The respondent would have the court apply the doctrine of ejusdem generis. [3] The rule:  `. . . accomplishes the purpose of giving effect to both the particular and the general words, by treating the particular words as indicating the class, and the general words as extending the provisions of the statute to everything embraced in that class, though not specifically named by the particular words.' National Bank of Commerce v. Estate of Ripley (1901), 161 Mo. 126, 131, 61 S. W. 587, 588, as cited in 2 Sutherland, Statutory Construction (3d ed.), p. 399, sec. 4909. Unfortunately, respondent does not indicate what the common element is in the specific types of establishments set out by sec. 77.52 (1) (a) 7, Stats. Certainly a hotel (which is primarily engaged in the business of providing lodging facilities) has very little in common with a bar or a caterer. The common element which we find is that the specifically enumerated establishments commonly sell prepared food for direct consumption. Therefore, even by applying the rule of ejusdem generis, a theater, which sells prepared food for direct consumption would be included in the term other establishments. None of the respondent's contentions would place theaters, which prepare popcorn and beverages, outside the application of the selective sales tax as we have interpreted sec. 77.52 (1) (a) 7, Stats.