Opinion ID: 2010922
Heading Depth: 1
Heading Rank: 5

Heading: Appellant's Interpretation.

Text: If there is any single factor which has contributed to the apparent ambiguous understanding of the selective sales tax statute, it is the interpretation placed on the statute by the Department of Revenue. The department's current position on the application of the selective sales tax is set out in Administrative Opinion No. 16A. The opinion is dated January 29, 1964. The opinion exempts from the application of the tax all prepackaged ( i.e., unprepared) foods even when they are sold by a restaurant, hotel, cafe, etc. In other words, the ultimate criterion the department uses to determine whether or not the tax is applicable is whether or not the particular item was prepared. If it was prepared, the tax applies. If it was not prepared, the tax does not apply. We do not believe that this application of the selective sales tax is in accord with the plain and unambiguous language of the statute. As previously set out, we believe the statute plainly indicates that the entire gross receipts (from the sale of meals, food, food products and beverages) are subject to the tax if an establishment is one subject to the tax. Those establishments subject to the tax are the enumerated ones plus any other establishment which meets the dual test of (1) engaging in the business of preparing any foods or beverages, and (2) selling for direct consumption on or off the premises. Obviously, under either the interpretation given by the department or the interpretation which we subscribe to the statute, the sale of prepared popcorn and beverages in a theater is subject to the sales tax. The interpretation of the plain and unambiguous language in the statute, we feel, leads to a broader application of the sales tax than is now being done. Because the respondent's argument fails here under either our interpretation or the department's interpretation, we do not believe it is necessary to make more than a passing reference to the following rules of construction. The supreme court is not bound by an administrative agency's construction of a statute. Johnson v. Chemical Supply Co. (1968), 38 Wis. 2d 194, 156 N. W. 2d 455. Ordinarily, however, the interpretation placed upon a statute by the administrative agency charged with the duty of applying such statute is given great weight. Chevrolet Division, G. M. C. v. Industrial Comm. (1966), 31 Wis. 2d 481, 143 N. W. 2d 532; Cook v. Industrial Comm. (1966), 31 Wis. 2d 232, 142 N. W. 2d 827, and cases cited therein. These general rules fail when a statute is not ambiguous. . . . administrative interpretation is only of significance where there is an ambiguity in the statute. It cannot overcome the plain wording of a statute where there is no ambiguity. Nelson v. Ohio Casualty Ins. Co. (1966), 29 Wis. 2d 315, 320, 139 N. W. 2d 33. We hold that the Tax Appeals Commission was correct in concluding that the sales of popcorn and soft drinks prepared and sold at motion picture theater refreshment stands were subject to sales taxation under sec. 77.52 (1) (a) 7, Stats. By the Court. Judgment reversed. HALLOWS, C. J. ( dissenting ). In sec. 77.52 (1) (a) 7, Stats., it is plainly provided that food products and beverages must be sold by . . ., and other establishments engaged in the business of preparing food or beverages and selling for direct consumption. . . Popcorn, to me, is not food as that word is used in this section. Besides, theaters are in the entertainment business and are not establishments like restaurants, cafes, bars, lunch counters and hotels. The placement of a comma in statutory construction does not have the importance or significance ascribed to it by the majority opinion. The doctrine of ejusdem generis should apply. The sales tax statute is a limited and specialized tax and the statute is not to be given a broad interpretation. The result of the majority opinion is to take out the selectivity in the selective sales tax. If there is any ambiguity in this tax statute, it must be resolved in favor of the taxpayer, not the government. I do not think the legislature intended to tax a citizen on the purchase in the theater of the popcorn he eats while enjoying a movie. I would affirm.