Court Opinion

ID: 5156517
Source: CourtListenerOpinion
Date Created: 2022-01-02 02:22:37.950456+00
Date Added: 2024-06-11T13:54:47.129498
License: Public Domain

¶ 37 I respectfully dissent. In the instant case, we are asked to determine whether Ivory Homes is entitled to a refund for sales tax it paid on delivery charges that were not separately stated in invoices it received at the time of several transactions, butwere separately stated in subsequently provided, corrected invoices. Our resolution of this question requires interpretation of two statutes. The first statute, section 59-12-102 of the Utah Code (the Definitions Statute), states that delivery charges are not included in a purchase price — and are therefore exempt from taxation — "if separately stated on an invoice, bill of sale, or similar document provided to the *Page 16 
purchaser."1 The second relevant statute, section 59-12-110 of the Utah Code (the Refund Statute), provides that a taxpayer is entitled to a refund if the "taxpayer pays a tax, penalty, or interest more than once or the [C]ommission erroneously receives, collects, or computes any tax, penalty, or interest, including anoverpayment."2
 ¶ 38 Based on its interpretation of these statutes, the majority holds that Ivory Homes is not entitled to a refund from the Commission. In reaching this decision, the majority asserts that the Commission found, as a matter of fact, that "there were no delivery charges in the . . . transaction" between Ivory Homes and Parson.3 Additionally, the majority states that because the Commission found that the parties did not intend to separately state the delivery charges in the initial transaction, "the supplemental invoice [that] separately listed the purported charges became irrelevant."4 Finally, the majority concludes that "[e]ven if there had been separate delivery charges, Ivory Homes would not be entitled to a refund because a plain language interpretation of the Refund Statute's requirement that `the [C]ommission erroneously receive[] . . . [a] tax' contemplates some mistake on the part of the Commission."5
 ¶ 39 I disagree with all three of these conclusions. First, I do not agree that the Commission found, as a matter of fact, that the purchase price charged by Parson did not include a specific amount dedicated to delivery charges. Instead, I believe that the Commission's factual findings support the conclusion that a portion of the price Ivory Homes paid to Parson was dedicated to delivery charges. Second, although I agree that the Commission found, as a matter of fact, that the parties did not intend for the delivery charges to be separately stated in the original invoices, I do not agree that this intent prohibited the parties from subsequently correcting the *Page 17 
invoices to separately state the delivery charges. Rather, in my view, the plain language of the Definitions Statute provides that delivery charges are nontaxable any time they are separately stated in an invoice or similar document, even if the document is provided to a purchaser after an initial transaction. Finally, I disagree that the Refund Statute's use of the phrase "erroneously receives" requires that an error be made by the Commission
before a taxpayer is entitled to a refund. Instead, I believe that the Refund Statute's statement that a taxpayer is entitled to a refund whenever a taxpayer makes an overpayment indicates that the phrase "erroneously receives" contemplates refunds not only for errors made by the Commission but also for errors made by a taxpayer.
 ¶ 40 Because a portion of the sales price that Ivory Homes paid to Parson was dedicated to delivery charges and because these delivery charges have been separately stated on invoices provided to the Commission, I would hold that this portion of the purchase price is not taxable. Additionally, because Ivory Homes made an overpayment by paying sales tax that it was not, with proper documentation, required to pay, I would hold that the Commission erroneously received the tax and that Ivory Homes is therefore entitled to a refund.
 I. THE TAX COMMISSION DID NOT FIND, AS A MATTER OF FACT, THAT THERE WERE NO DELIVERY CHARGES IN THE ORIGINAL TRANSACTIONS ¶ 41 In paragraph fifteen of its opinion, the majority states that "the Commission found, as a matter of fact, that the parties' original transactions never contained . . . delivery charges" and that such separate charges were never intended. I agree with the majority that the Commission found, as a matter of fact, that the parties did not intend to include separately stated delivery charges in the original invoices given to Ivory Homes and that this finding is entitled to substantial deference. But I disagree with the majority's assertion that the Commission found, as a matter of fact, that no part of the sales price Ivory Homes paid to Parson was dedicated to delivery charges.
 ¶ 42 In its findings of fact, the Commission expressly noted that Parson had provided evidence demonstrating that it sold ready-mix concrete to customers that did not require delivery "at areduced price compared to ready-mixed concrete products with delivery." The Commission also noted that Parson's "accounting system allowed *Page 18 
for the tracking of delivery charges as a separate item from the cost of the products themselves" and that Parson had appeared at a hearing and provided evidence "as to what would have been the amounts of the delivery charges if they had been separately identified on [Parson's] invoices."
 ¶ 43 In my view, these findings of fact support the conclusion that the purchase price on the invoices received by Ivory Homesdid include a specific amount that was dedicated to delivery charges. Specifically, the portion of the purchase price dedicated to delivery charges represents the difference between the amount Parson charged for delivered concrete and the amount Parson charged for nondelivered concrete. This portion is reflected in the corrected invoices and similar documents that Parson provided to the Commission. Accordingly, because the Commission's factual findings suggest that a portion of the purchase price paid to Parson was dedicated to delivery charges, I disagree with the majority's conclusion that the Commission found, as a matter of fact, that the original transaction did not include any amount dedicated to delivery charges.
 II. UNDER THE DEFINITIONS STATUTE'S PLAIN LANGUAGE, IVORY HOMES' DELIVERY CHARGES ARE NOT TAXABLE BECAUSE THEY ARE SEPARATELY STATED IN INVOICES AND SIMILAR DOCUMENTS ¶ 44 Although the Commission's factual findings support the conclusion that the purchase prices in the original transactions between the parties included a delivery charge, it is undisputed that the original invoices did not separately state those delivery fees. We therefore must decide whether a party can modify or correct an invoice to separately state a delivery charge when that charge was not separately stated on the original invoice. In paragraph fifteen of its opinion, the majority agrees that "so long as some portion of payment is dedicated to an activity that falls within the definition of delivery charges contained in [the Definitions Statute], that portion would not be taxable." The majority therefore reasons that had Ivory Homes intended to dedicate a portion of its payment to delivery charges, that amount would not be taxable. But the majority concludes that Ivory Homes did not dedicate a portion of its payment to delivery charges because it did not intend to separately state the delivery charges in the original invoices. In reaching this conclusion, the majority appears to accept the Commission's legal conclusion that taxpayers can correct an invoice *Page 19 
only when they introduce evidence demonstrating that they intended, at the time of the original transaction, for the delivery charges to be separately stated. To the extent that the majority adopts this rule, I disagree.
 ¶ 45 The plain language of the Definitions Statute excludes delivery charges from taxation if a purchaser is provided with "an invoice, bill of sale, or similar document" that separately states the delivery charges.6 Nothing in the language of this provision requires that delivery charges be listed in an initial invoice. Additionally, nothing in the language of the Refund Statute suggests that a party must intend to separately state delivery charges at the time of the original transaction or that a party will be prohibited from correcting an initial invoice absent evidence of such intent. Instead, under the plain language of the Definitions Statute, the determination of whether a delivery charge is taxable depends solely on whether that charge has, at some time, been separately stated in "an invoice, bill of sale, or similar document" that has been provided to the purchaser.7
 ¶ 46 As noted above, it is undisputed that the original invoices that Parson provided to Ivory Homes did not separately state the portion of the purchase price that was dedicated to delivery charges. But it is also undisputed that, after these transactions, Parson provided Ivory Homes with corrected invoices and spreadsheets that did separately state the delivery charges. In my view, this is all that the plain language of the Definitions Statute requires to render delivery charges nontaxable. Specifically, pursuant to the Definitions Statute's plain language, the delivery charges that Ivory Homes paid for became nontaxable once they were separately stated on the corrected "invoice[s], bill[s] of sale, or similar document[s]."8 Accordingly, because the delivery charges were separately stated on the corrected invoices and similar documents provided to Ivory Homes, I would hold that those charges are exempt from taxation.
 III. THE PLAIN LANGUAGE OF THE REFUND STATUTE PERMITS A TAXPAYER TO RECEIVE A REFUND WHEN THE TAXPAYER MAKES AN OVERPAYMENT *Page 20  ¶ 47 In addition to concluding that the original transactions between Ivory Homes and Parson did not include delivery charges, the majority concludes that, even if they had "Ivory Homes would not be entitled to a refund because a plain language interpretation of the Refund Statute's requirement that `the [C]ommission erroneously receive[] . . . [a] tax' contemplates some mistake on the part of the Commission."9
 ¶ 48 I agree with the majority that, in some instances, the phrase "erroneously receives" may contemplate an error on the part of a receiving party, such as the Commission. But the phrase may also be used to describe an error made by someone other than the receiver. For instance, one may erroneously receive a phone call from a wrong-number dialer; an attorney may erroneously receive privileged information that opposing counsel did not mean to disclose; or one might erroneously receive payment for work not yet completed. In each of these instances, the error committed is not made by the receiver, but by the caller, sender, or payor, respectively.
 ¶ 49 Ultimately, however, I see no reason to engage in a linguistic debate about which usage of this phrase is more common because the Refund Statute expressly states that a taxpayer is entitled to a refund "[i]f . . . the [C]ommission erroneouslyreceives . . . any tax, . . . including anoverpayment."10 An overpayment occurs whenever the "amount [of tax] paid exceeds the amount due."11 This is precisely what occurred in this case.12 As explained above, *Page 21 
once the delivery fees charged by Parson were separately stated on corrected invoices, those fees became nontaxable. Thus, any sales tax paid by Ivory Homes on the separately stated delivery fees exceeded the amount of tax actually due and constituted an overpayment. Because an "overpayment" is an express basis for a refund under subsection 110(2)(a) of the Refund Statute, I would hold that Ivory Homes is entitled to a refund.
 ¶ 50 The majority dismisses the statutory reference to an "overpayment" as "refer[ring] only to the duties and procedure of the Commission in examining filed returns."13 Specifically, the majority suggests that a refund for an overpayment is available only where the Commission commits an error "in its execution of th[e] duty" to "examine returns for . . . clerical mistakes."14 But I cannot see how this limitation can be reconciled with the text of the Refund Statute. There is simply no language in the Refund Statute suggesting that refunds for overpayments are limited to overpayments caused by the Commission's clerical mistakes. Moreover, contrary to the majority's suggestion, nothing in the statutory text restricts the right of a refund to instances where an *Page 22 
overpayment is detected by the Commission. Instead, in subsection (2), the provision that the majority believes "provides the grounds for which a refund is due,"15 the Refund Statute unequivocally prescribes a right to a refund for "an overpayment described in Subsection (1)(c)."16 The "overpayment described in Subsection (1)(c)," in turn, says nothing about "clerical mistakes" or overpayments detected by the Commission. It simply describes an overpayment as a tax payment that "exceeds the amount due."17 In my view, that plain language is dispositive. I would therefore reverse the Commission's decision and hold that Ivory Homes is entitled to a refund.18 *Page 23 
 ¶ 51 Justice Lee concurs in Associate Chief Justice Durrant's dissenting opinion.
1 UTAH CODE ANN. § 59-12-102(87)(c)(ii)(B) (Supp. 2011).
2 Id. § 59-12-110(2)(a) (2008) (emphasis added). In 2009, the Refund Statute was substantively changed. Seeid. § 59-12-110 (Supp. 2011). Throughout this dissenting opinion, I therefore cite to the 2008 version of the statute, which governs Ivory Homes' refund requests.
3 Supra ¶ 8.
4 Supra ¶ 13.
5Supra ¶ 20 (quoting UTAH CODE ANN. § 59-12-110(2)(a) (2008)).
6 UTAH CODE ANN. § 59-12-102(87)(c)(ii)(B) (Supp. 2011).
7 See id.
8 id.
9Supra ¶ 20 (quoting UTAH CODE ANN. § 59-12-110(2)(a) (2008)).
10 UTAH CODE ANN. § 59-12-110(2)(a) (2008) (emphases added).
11 Id. § 59-12-110(1)(c).
12 The majority argues that Ivory Homes did not make an overpayment "because the purported delivery charges had not been separately stated on an invoice, bill of sale, or similar document" at the time that the Commission received the tax submission.Supra ¶ 25 n. 33 (internal quotation marks omitted). I disagree with the majority's interpretation of "overpayment." Specifically, I do not agree that, in determining whether there has been an overpayment, the Commission may look only at the documents filed at the time the tax was paid. In my view, the Refund Statute provides that an overpayment exists as long as the Commission has received a payment that exceeds the amount due. See UTAH CODE ANN. § 59-12-110(1)(c). If taxpayers can show that they paid an amount greater than the amount ultimately due, they have made an overpayment and are entitled to a refund. Thus, I believe taxpayers can correct errors in the calculation of their tax by submitting post-transaction documentation. In contrast, the majority's interpretation of "overpayment" appears to foreclose a taxpayer's ability to correct many errors. Under the majority's analysis, an overpayment can only exist — and therefore only be corrected — at the moment the tax is originally paid. Seesupra ¶ 25 n. 33. In practice then, subsequent invoices cannot be created and filed to correct the amount of the tax that is due. By essentially foreclosing a taxpayer's ability to correct the amount due, the majority's interpretation is at odds with its assertion that it "express[es] no opinion regarding a taxpayer's ability to correct errors through post-transaction documentation."Supra ¶ 14.
13 Supra ¶ 24.
14 Supra ¶ 25.
15 Supra ¶ 26.
16 UTAH CODE ANN. § 59-12-110(2)(a).
17 Id. § 59-12-110(1)(c).
18 I also disagree with the majority's attempt to sustain its contrary view on the basis of a canon of statutory interpretation that requires strict construction of tax credit statutes.Supra ¶¶ 31-33. In my view, the distinction between affirmative "tax imposition statutes" and a negative "tax credit" is untenable.See supra ¶ 31. A party's effective tax rate is generated by the net application of all relevant tax provisions. I cannot follow the logic of construing one side of that net equation liberally and the other side strictly.
Moreover, I am unpersuaded by the notion that tax credits — but not tax impositions — are "matters of legislative grace" that lend themselves to strict construction.Supra ¶ 31. At some level, any legislative act is a matter of "grace," in that all statutes stop short of an extreme that would impose greater hardships on the regulated parties. And that is surely true of "tax imposition statutes," which decline to impose an even higher tax rate. In that sense, "tax imposition statutes" are every bit as much a matter of "grace" as tax credit statutes, and thus both are logically as worthy of strict construction in favor of the taxing authority.
Finally, I believe that the line between the two is ultimately unworkable. The Refund Statute can be characterized as a "credit" provision in the sense that it prescribes a procedure for taxpayer recovery of taxes that are erroneously received. But the statute is every bit as much an integral part of the underlying "tax imposition statute," in that it sets forth a mechanism for ensuring that the amount paid is the correct amount of tax originally imposed.
Because of these concerns, I do not think that we should assume that the legislature exaggerates its tax refund enactments or understates its tax imposition statutes. Instead, we should presume that the legislature means what it says and interpret tax refund provisions the same that way we construe other statutes. *Page 1