Opinion ID: 1970312
Heading Depth: 2
Heading Rank: 2

Heading: Were appellees required to pay the New York U.B.T.?

Text: The District also contends that appellees are not entitled to a tax credit because they were not required to pay the New York U.B.T. This contention is doubly flawed. First, the District waived it by not asserting it below. Second, even if the point had been properly preserved for appellate review, this argument is merely a variation on the argument that the New York U.B.T. is not an individual income tax, which we have already discussed and rejected. We first address the issue of waiver. It is a well established principle of appellate review that arguments not made at trial may not be raised for the first time on appeal. See, e.g., Chase v. Gilbert, 499 A.2d 1203, 1209 (D.C.1985); Miller v. Avirom, 127 U.S.App.D.C. 367, 369-70, 371, 384 F.2d 319, 321-322, 323 (1967). A court deviates from this principle only in exceptional situations and when necessary to prevent a clear miscarriage of justice apparent from the record. Williams v. Gerstenfeld, 514 A.2d 1172, 1177 (D.C.1986) (citations omitted). We see no actual or potential miscarriage of justice here. Because the District's argument that appellees were not required to pay the New York tax was not made below, we hold that it was waived and cannot now be considered. But even if it had not been waived, it still would fail. The District argues that appellees did not really have to pay the New York U.B.T. because their partners in New York could have paid their share of the tax. To the District, the fact that appellees paid the New York tax is irrelevant; the partnership could have been structured in such a way as to relieve appellees of the obligation to pay that tax. Thus, the District contends, appellees really were not required by law to pay the New York U.B.T. This is just a slightly modified version of the District's argument that the New York U.B.T. is not an individual income tax. Because unincorporated business taxes are taxes on the partners themselves, as we held in Bishop, 401 A.2d at 961 n. 18, it is the individual partners who are required to pay those taxes. Moreover, as appellees point out, the partnership law of New York makes all Dewey Ballantine partners jointly and severally liable for all of the partnership's debts and liabilities  including the New York U.B.T. See N.Y. PARTNERSHIP LAW § 26 (McKinney 1988). Thus appellees potentially were required to pay the entire New York U.B.T. owed by the partnership. Under the partnership agreement, however, appellees paid only a percentage of Dewey Ballantine's New York U.B.T., the same percentage as their share of partnership earnings. To say that appellees did not have to pay the New York U.B.T. because some other partner or partners would be saddled with their unpaid share if they failed to pay ignores the fact that appellees' refusal to pay their share of the New York tax would affect their ability to draw the same proportionate share of the partnership income.