Opinion ID: 1753640
Heading Depth: 1
Heading Rank: 1

Heading: on application for second rehearing

Text: Champion argues in its application for rehearing that this Court, in determining who was the purchaser, has ignored a stipulation made between the parties, namely stipulation # 10, which reads as follows: The construction of the Project and purchase and installation of the Leased Equipment commenced in 1968 and continued through the periods here involved. The Board duly appointed Champion as its purchasing agent by an agency agreement with Champion dated as of February 1, 1973, a copy of which is attached hereto as Exhibit 8. The Board also duly appointed Brown & Root, Inc. as its purchasing agent by an agency agreement dated as of February 1, 1973, a copy of which is attached hereto as Exhibit 9. All purchases were made by the Board and in its name through one of its duly authorized purchasing agents pursuant to purchase orders in the form attached as Exhibit 10. Title was taken in and remains in the name of the Board. The Board's credit was obligated for all purchases. All purchases were invoiced by the vendors to and in the name of the Board in the form set forth as Exhibit 11. Champion made advances of the moneys necessary to pay the invoices for such purchases. Champion thereafter submitted to the Trustee monthly requests approved by the Board for reimbursement from the Construction Fund for such advances in the form attached hereto as Exhibit 12. The Trustee paid to Champion from the Construction Fund the amounts necessary to reimburse Champion for such advances pursuant to Section 4.3 of the Lease. Champion asserts that Stipulation # 10 is dispositive of the issue which this Court described as the single dispositive issue, that is, who actually made the purchases in question. Stipulation # 10 does state that the purchases were made by the Industrial Development Board of the Town of Courtland and that the Board's credit was obligated. This Court, on original deliverance, was aware of that stipulation. We said: The State, in this case, concedes that the purchases were made in the name of the Board, and that the Board's credit was obligated; nevertheless, the State contends that the additional requirement, by Amended Rule G27-916, that the property was `paid for with funds belonging to the Board,' was not met and, therefore, the exemption does not apply. We realize that facts stipulated by the parties are to be taken as true by the Court, Benedict v. Little, 288 Ala. 638, 264 So.2d 491 (1972), and Harper v. Talladega County, 279 Ala. 365, 185 So.2d 388 (1966), and Stipulation # 10, standing alone, and in another factual setting, would control. As we stated in the original opinion, the dispositive issue in this case was a determination of who the purchaser was. That was the ultimate fact to be determined. Stipulation # 10 is of the type which may be properly characterized as a stipulation of a conclusion in this factual context. Stipulations of conclusions which are contrary to the facts may properly be disregarded by the reviewing court. Commissioner of Internal Revenue v. Cummings, 77 F.2d 670 (5th Cir. 1935). The taxpayer, on rehearing, states that [t]ax avoidance, as opposed to evasion is not improper or illegal. We agree, and this case comes immeasurably close to the category of legal tax avoidance. We recognized all those arguments on original deliverance. We decided this case after an examination of a totality of the facts, and after a thorough examination of the intent of the legislature concerning exemption from taxation of industrial development boards. The Department of Revenue, in its administration of the tax laws, in the past has authorized a scheme of tax avoidance in cases similar to this one. Rule G27-916 prior to its amendment was consistent with the prevailing law that purchases made by an industrial development board were exempt from taxation if they were made in the name of the board and the board's credit was obligated. The department, however, after the State v. Allied Paper, Inc., 56 Ala.App. 661, 325 So.2d 171, cert. den. 295 Ala. 420, 325 So.2d 176 (1975), experience, changed its administrative practice by amending its rule to add a requirement that such purchases must be paid for with funds belonging to the board. The trial court found that this requirement was not met. We determined that the purchases were not paid for with funds belonging to the Board. We have carefully examined the taxpayer's additional arguments which it makes on rehearing, but we are still convinced that under Alabama law, these purchases were not tax exempt; the Industrial Development Board of the Town of Courtland was not the purchaser. OPINION EXTENDED, APPLICATION FOR REHEARING OVERRULED. MADDOX, FAULKNER, JONES, ALMON and EMBRY, JJ., and MERRILL, Retired Judge, concur. SHORES and BEATTY, JJ., dissent. TORBERT, C. J., not sitting.