Court Opinion

ID: 9560223
Source: CourtListenerOpinion
Date Created: 2023-08-21 17:45:30.491496+00
Date Added: 2024-06-11T09:12:26.867802
License: Public Domain

SHEPARD, Chief Justice,
dissenting.
For several reasons I cannot agree with the majority opinion. The facts are not disputed and are essentially as stated in the majority opinion, with a glaring omission which I feel is crucial to the disposition of this case.
In order to conduct its business, Consolidated acquires tariff schedules from various companies throughout the country. These schedules are mass-produced by tariff bureaus which specialize in compiling and preparing them and providing them to subscribing carriers. These tariff bureaus are non-profit organizations totally subsidized by the subscribing carriers. The printed tariff schedules are published in bound and in looseleaf form and may be updated as frequently as daily. After receiving the tariff schedules, some of the information is entered into computers and, thereafter, Consolidated may not have to refer to the printed published schedules. Consolidated also acquires computer tapes which contain rate information and uses the tapes to store information for future reference.
Various state public service commissions and the Interstate Commerce Act require Consolidated or its statutorily sanctioned agent, a tariff bureau, to provide a copy of the tariff rate schedules to the Interstate Commerce Commission. This is known as the “publishing” requirement. The Act reads: “A motor common carrier shall publish and file with the Commission tariffs containing the rates for transportation it may provide under this subtitle____” 49 U.S.C. § 10762(a)(1).
In its regulations, the ICC has further required either Consolidated or its agent, to provide on request to a shipper or member of the general public a copy of the tariff rate schedules. Consolidated may charge for the schedule, but at a much reduced rate. The ICC stated:
It is conceivable that, because of frivolous demands for copies of tariffs which *659would serve no reasonable purpose or be of any benefit to the carriers, the mandatory furnishing of tariffs to persons, whether subscribers or not, at a charge not to exceed the cost of first-class postage, could unduly increase the cost of the publishers. While we hold that the obligation of the carriers to distribute tariffs on a timely, nondiscriminatory basis is fundamental to the tenets of the Interstate Commerce Act, we also recognize that it is important to the economic stability and planning of the carriers that there be a balancing of the resultant cost due to the mutual benefits derived therefrom by both carriers and tariff users. Making some charge, however incidental to the sole purpose, would also tend to limit the requests for tariff matter to those who have a genuine interest in, and need for, such matter, and in so doing, would serve to reduce the financial burden on the earners. Carriers and agents, after all, should be “fairly entitled to know, with approximate accuracy, the number of extra copies that will be desired.”
Balancing the obligations and the benefits accruing, we have modified the rules to require each carrier and each agent to furnish one copy of each publication to the subscriber or other interested person without charge which, in no case, is more than one-half of the demonstrable cost of the paper and the printing or other reproduction process employed which is proportionately assignable to the copy as part of the publication of multiple copies for filing, normal distribution, and stocking. Carrier or publishing agent in-house cost factors related only to the material and its physical reproduction operation, such as for compiling, overhead, equipment, depreciation, handling, sorting, etc., may not be included in the base for the calculation, but the actual cost of postal service or other authorized means of transmission may be added thereto.
349 ICC at 133-134.
In addition, Consolidated must post at its Boise rate center a written copy of any tariff schedule that it may use in calculating the charge for a particular shipment whether by Consolidated or another carrier (“interlining”). This is the “posting” requirement of the Interstate Commerce Act. Consolidated acquires the tariffs from the tariff bureaus at a cost that is far greater than the cost of their preparation. Thus, Consolidated subsidizes the bureau for the losses incurred in providing tariff rate schedules to shippers for less than cost as required by the Interstate Commerce Commission.
At a trial de novo before the district court, Consolidated offered two affidavits from the manager of the tariff bureau in Denver. The affidavits in support of its cross-motion for summary judgment stated that the cost paid by Consolidated for the tariff schedules was far greater than the price charged shippers, thus indicating the service nature of the transaction. The Tax Commission offered nothing in support of its cross-motion for summary judgment.
The first question to address is the propriety of granting the Tax Commission’s motion for summary judgment. I.C. § 63-3812 requires that when a taxpayer appeals an adverse decision, the appeal is to be heard in the district court in a trial de novo. I.R.C.P. 83(u)(2) requires that on an appeal from a governmental agency or board involving a trial de novo, the district court shall render a decision as if the matter were initially brought in the district court. This Court has repeatedly held that summary judgment should be granted only if no genuine issue of material fact is found to exist after the pleadings, depositions, admissions, and affidavits have been construed in a light most favorable to the party opposing the summary judgment. Farmer’s Insurance Co. v. Brown, 97 Idaho 380, 544 P.2d 1150 (1976); Salmon Rivers Sportsman Camps, Inc. v. Cessna Aircraft Co., 97 Idaho 348, 544 P.2d 306 (1975).
However, on cross-motions for summary judgment, on the same evidentiary facts and on the same theories and issues, the parties effectively stipulate that there is no genuine issue of material fact. Where the evidentiary facts are not disputed and the trial court will be the trier of fact, summa*660ry judgment is appropriate despite the possibility of conflicting inferences, because the court alone will be responsible for resolving the conflict between those inferences. Riverside Development Co. v. Ritchie, 103 Idaho 515, 650 P.2d 657 (1982). Justice Bakes recently noted in a dissent that “[If] there are sufficient facts from which inferences could be made which support the trial court’s decision, ... summary judgment should not be disturbed on appeal.” K Mart Corporation v. Idaho State Tax Commission, 111 Idaho 719, 727 P.2d 1147 (1986) (Bakes, J., dissenting). See also Argyle v. Slemaker, 107 Idaho 668, 691 P.2d 1283 (Ct.App.1984).
In this case the only evidence before the district court was two affidavits in support of Consolidated’s petition and a tariff rate schedule. The Tax Commission presented no evidence at trial. The Tax Commission’s decisions are entitled to a presumption of correctness. County of Ada v. Red Steer Drive Ins of Nevada, Inc., 101 Idaho 94, 609 P.2d 161 (1980); Merris v. Ada County, 100 Idaho 59, 593 P.2d 394 (1979). However, this presumption disappears as soon as the taxpayer introduces evidence sufficient to make out a prima facie case. Consolidated offered affidavits in support of its position. Absent the presumption, the district court had nothing in evidence from which inferences could be drawn to support summary judgment. Therefore, summary judgment was improper.
Next, I address the question of whether the use tax under I.C. § 63-3621 is applicable to Consolidated’s acquisition of the tariff rate schedules. The use tax states in pertinent part:
Imposition and rate of the use tax. — An excise tax is hereby imposed on the storage, use, or other consumption in this state of tangible personal property acquired on or after July 1, 1965 for the storage, use, or other consumption in this state at the rate of four per cent (4%) of the value of the property, and a recent sales price shall be presumptive evidence of the value of the property.1
The terms “use” and “storage” are defined in I.C. § 63-3615(a) and (b):
Storage — Use.—(a) The term “storage” includes any keeping or retention in this state for any purpose except sale in the regular course of business or subsequent use solely outside this state of tangible personal property purchased from a retailer.
(b) The term “use” includes the exercise of any right or power over tangible personal property incident to the ownership or the leasing of that property ..., except the term “use” does not include the sale of that property in the regular course of business____
I.C. § 63-3609, which was in effect during the period in question, in pertinent part defines a retail sale as follows:
Retail sale — Sale at retail. — The terms “retail sale” or “sale at retail” means a sale of tangible personal property for any purpose other than resale of that property in the regular course of business or lease or rental of that property in the regular course of business where such rental or lease is taxable under section 63-3612(h) of this act.
The sales tax does not apply to transactions where the rendering of a service is the object of the transaction, even though tangible personal property is exchanged incidentally. The sales and use taxes are complimentary so that if a transaction is not subject to a sales tax it is not subject to the use tax. Quotron Systems v. Comptroller of the Treasury, 287 Md. 178, 411 A.2d 439 (Md.1980). To determine whether the object of a transaction is a sale of services or a retail sale requires a balancing test as set forth in the Idaho Sales and Use Tax Regulation and Idaho Sales Tax Act, Regulation 9,l.b.i (I.D.A.P.A. 35.-02.09,l.b.i.). *661when a sale of tangible personal property includes incidental services, the measure of the tax is the total amount charged including the amount charged for any incidental services, except separately stated transportation and installation charges. The fact that the charge for the tangible personal property sold is principally derived from labor and/or creativity of the maker of the property does not transform a sale of tangible personal property into a sale of services. The cost of any commodity includes labor and skill of manufacture. In determining whether a transaction is a retail sale of tangible personal property or a sale of services, the following tests are to be applied:
*660b. RETAIL SALES OF TANGIBLE PERSONAL PROPERTY TOGETHER WITH SERVICES:
i. The sales tax applies to retail sales of tangible personal property. It does not — except to the extent stated above— apply to the sale of services. However,
*661(a) In determining whether a transfer of tangible personal property is a taxable retail sale or a transfer merely incidental to a service transaction, the proper test is to determine whether the transaction involves a consequential or inconsequential professional or personal service. If the service rendered is inconsequential, then the entire transaction is taxable. If a consequential service is rendered, then it must be ascertained whether the transfer of the tangible personal property was an inconsequential element of the transaction. If so, then none of the consideration paid is taxable.
(b) In determining whether a mixed transaction constitutes a consequential service transaction, a distinction must be made as to the object of the transaction —i.e., is the object sought by the buyer the service per se or the property produced by the service.
(c) Where a transaction is mixed in such a manner that the tangible personal property transferred and the service rendered are distinct consequential elements having a fixed and ascertainable relationship between the value of the property and the value of the service rendered so that both may be separately stated, there exists two separate transactions and the one attributable to the sale of tangible personal property is subject to sales taxation while the other is not.
The majority, in describing its proper test, sets out on page four, three requirements:
[Fjirst, it must be established that the printed tariff schedules are tangible personal property; second, the tariff schedules must have been obtained through a retail sale; and third, it must be shown that the printed tariffs were under the control and ownership of Consolidated Freightways in Idaho. (Citations omitted).
No one disputes that the tariff schedules are tangible personal property and that they were under Consolidated’s control. The majority’s second requirement, however, requires a retail sale. The majority then conveniently cites cases from other jurisdictions supporting its position, ignoring the fact that Idaho has a statutory definition of retail sale. I submit that Consolidated’s use of the tariff schedules occurs in the regular course of business and is subject to neither the use tax nor the sales tax. This position is supported by the crucial fact that Consolidated is required by federal law to sell the tariff schedules at a loss to anyone who wants one. I can think of no clearer example of a sale in the regular course of business.
Further, in this case there is a strong inference of a service transaction. The affidavits offered by Consolidated show that anyone could purchase the tariffs for a fraction of the price that Consolidated could. To apply the test outlined in Regulation 9,1 above, much more information is needed. How much of the cost to Consolidated was for the volumes themselves? How much was cost for acquisition, and how much consisted of dues paid to belong to the organization of shippers that form the tariff bureaus? What other benefits or services did Consolidated receive for its money? These questions need answers to determine the object of the transaction.
Recently, in Old West Realty, Inc. v. Idaho State Tax Commission, 110 Idaho 546, 716 P.2d 1318 (1986), the Court dealt with a similar case but involving the sales tax. Since sales and use taxes are complimentary, much of the reasoning is applica*662ble here. In Old West Realty, supra, the dispute centered on weekly or by-weekly multiple listing booklets (MLS books) used by real estate salesmen. Old West was a member of Ada County Multiple Listing Service (Ada MLS). Old West received, for its monthly fee, a number of MLS books as well as other services. These books listed all properties for sale in Ada County with pictures and other information. In the contract for the service, Ada MLS required that the books remain confidential and that the books could not be shown to any nonmember. The Tax Commission held that (1) the books were tangible personal property, and (2) any incidental services provided along with the transfer were inconsequential. Old West appealed to this Court claiming the MLS books transfer was incidental to the services provided by Ada MLS.
This Court stated that:
[F]or the Tax Commission to prevail in this case, it must be clear from the facts that (1) the MLS books constitute tangible personal property, (2) the transfer involving the transfer of the books from Ada MLS to Old West constitutes a “sale” of tangible personal property “at retail,” and (3) the “sales price” is the entire amount of the monthly fee. Old West Realty, 110 Idaho 546 at 548, 716 P.2d 1318 at 1320.
The Court then held that the MLS books were tangible personal property, that there was a “sale at retail” since Old West had no intention of reselling the books and, in fact, was prohibited from doing so by the bylaws of the Ada MLS, and that the entire monthly fee was the “sales price” because Old West failed to allege or separate from the monthly fee those amounts properly attributable to the monthly fees.
The instant case can be distinguished on two grounds. First, as stated above, where Old West was prohibited from distributing copies of the MLS books, Consolidated is required by the ICC to resell the tariff rate schedules. Clearly, Consolidated resells the schedules in the regular course of business. If so, Consolidated would not be subject to the use tax.
Second, a genuine question exists as to whether Consolidated provided the schedules incidental to a service. How much of the fee is paid for services in addition to the actual costs of the printed tariffs? How much consisted of dues to belong to the organization of shippers that form the tariff bureaus? What other benefits or services did Consolidated receive? Unlike in Old West Realty, supra, Consolidated appears to have paid far more for the tariff schedules than their actual worth, giving the implication that the transaction was a service.
Finally, I turn to Consolidated’s claim that the penalty for negligence assessed against Consolidated pursuant to I.C. § 63-3046(a) violates due process and is unconstitutional. Consolidated claims that of the $49,379.00 penalty assessed by the Tax Commission, and later affirmed by the district court, only $6,069.00 of that amount relates to assets other than the tariff schedules. Consolidated offered a substantial legal argument in support of its position. They further assert that to hold Consolidated liable for the entire penalty without proof of negligence results in the imposition of strict liability, thereby violating due process. The penalty was assessed on the entire deficiency of $49,379.00 when only a deficiency of $6,069.00 is arguably due to negligence under the statute. This Court has repeatedly held that it will not pass upon the validity of a statute unless essential to the disposition of the case. Erickson v. Amoth, 99 Idaho 907, 591 P.2d 1074 (1978); Curtis v. Child, 95 Idaho 63, 501 P.2d 1374 (1972). We need not decide this question at the present time.
I submit that the granting of summary judgment was improper. The decision of the district court granting summary judgment should be reversed and remanded for proceedings not inconsistent with this opinion.

. During the time period in question the rate was 3%.