Court Opinion

ID: 6470910
Source: CourtListenerOpinion
Date Created: 2022-06-26 14:16:11.519129+00
Date Added: 2024-06-11T15:53:48.368220
License: Public Domain

SUTIN, Judge (specially concurring). I concur. Although the record in this case is lengthy, the pertinent facts are simple. Taxpayer contracted with Duke City Lumber Co. to cut, limb, skid, load and haul timber from United States Forest Service lands to Duke City’s mill, and it had to blade Forest Service roads leading to timber sites where trees were cut. This was called “road maintenance.” The Bureau seeks to tax for gross receipts obtained from (1) hauling timber from the landing to the mill and (2) road maintenance. Taxpayer argues that these two types of gross receipts are exempt from the gross receipts tax. I agree. Section 7-9-35, N.M.S.A.1978 reads in pertinent part: When a privilege tax is imposed by the Resources Excise Tax Act * * * no provisions of the Gross Receipts * * * Tax Act shall apply to or create a tax liability for such privilege * * *. [Emphasis added.] Under the Resources Act, a tax is levied on the privilege of severing and processing natural resources. Section 7-25-2, N.M.S. A.1978. Timber is a natural resource, and “severing” includes felling timber for commercial use. Section 7-25-3(D) and (H). Taxpayer was the person who severed timber for Duke City Lumber Co. Section 7-25-3(G). The tax imposed is a “service tax.” The dispositive question is the nature and extent of the “privilege” referred to in § 7-9-35. The Bureau says that the “privilege” covers only the felling of timber, not hauling or road maintenance. I disagree. Many views of mine have been expressed in Cardinal Fence Co., Inc. v. Commissioner, Bur. of Rev., 84 N.M. 314, 502 P.2d 1004 (Ct.App.1972), Sutin, J. dissenting; Title Services, Inc. v. Commissioner of Revenue, 86 N.M. 128, 520 P.2d 284 (Ct.App.1974), Sutin, J. dissenting; Co-Con, Inc. v. Bureau of Revenue, 87 N.M. 118, 529 P.2d 1239 (Ct.App.1974), Sutin, J. dissenting; Gathings v. Bureau of Revenue, 87 N.M. 334, 533 P.2d 107 (Ct.App.1975), Sutin, J. dissenting; Advance Schools, Inc. v. Bureau of Revenue, 89 N.M. 133, 548 P.2d 95 (Ct.App.1975), Sutin, J. dissenting, rev’d 89 N.M. 79, 547 P.2d 562 (1976); Ealey v. Bureau of Revenue, 89 N.M. 174, 548 P.2d 454 (Ct.App.1975), Sutin, J. specially concurring, rev’d 89 N.M. 160, 548 P.2d 440 (1976); Western Elec. Co. v. N. M. Bureau of Rev., 90 N.M. 164, 561 P.2d 26 (Ct.App.1976), Sutin, J. specially concurring. I adhere to those views which are: 1. Tax statutes have definitions that create ambiguities which create a battle of the dictionaries. The purpose of the statute should not be accomplished by “semantic niggling.” If there is ambiguity or doubt, it is not the fault of the taxpayer. 2. Where an exemption is claimed, the statute should be liberally construed in favor of the taxpayer because the exemption is granted for a beneficent purpose. We should protect the taxpayer by judicial construction. 3. The Commissioner should not play with the statute like a chess game. He sits in a quasi-judicial position and should seek to do justice and avoid injustice to taxpayers. He is both the judge and attorney for the Bureau. His qualifications are not fixed by law. He must not rely only on the evidence presented by his attorney, nor favor the State over the taxpayer. He must try to be objective in nature. 4. We do not view the evidence in the light most favorable to the decision. Our duty is to look at the whole record. 5. The statute does not delegate authority to the Commissioner to enact legislation by regulation which directly taxes a specific segment of business. 6. All doubts as to the meaning and intent of a tax statute must be construed in favor of the taxpayer. 7. Every taxpayer is entitled to a fair and impartial hearing. My disagreement with the Bureau centers around the narrow and strict interpretation of the words “felling timber for commercial use.” The Bureau concedes that “skidding” constitutes “severing.” To “skid” is “to drag (logs) from the stump to a landing, skidway, or mill.” Webster’s Third New International Dictionary, p. 2133 (1966). An expert witness testified that “to haul” and to “skid” were quite similar. “They are the same in that they are a hauling function.” “There’s very little difference between skidding and hauling logs, other than the fact you’ve got a different piece of equipment.” “Felling timber for commercial use” means “hauling timber from the stump to the mill.” In order to do so, taxpayer of necessity must blade Forest Service roads leading to timber sites. The Bureau tried to burden a person engaged in mining activities with the gross receipts tax instead of the service tax. It contended the taxpayer’s work was a construction service instead of “mining” a natural resource. This court said “no.” Patten v. Bureau of Revenue, 86 N.M. 355, 524 P.2d 527 (Ct.App.1974). My criticism of the Commissioner’s attitude toward taxpayers, heretofore expressed, continues to the instant case. His attitude is: “Let the courts decide.” Although not a financial burden on the Bureau, it is fractious and a conniption to the taxpayer to try and appeal such cases.