Court Opinion

ID: 9564354
Source: CourtListenerOpinion
Date Created: 2023-08-21 18:58:42.904944+00
Date Added: 2024-06-11T09:18:22.216705
License: Public Domain

COCHRAN, J.,
concurring in part, dissenting in part.
I agree with the majority that United is not entitled to exemption from payment of sales and use taxes for food and related items served to passengers. The exemption provided by Code § 58-441.6(u) for tangible personal property sold or leased to an airline “for use or consumption by such airline directly in the rendition of *393its common carrier service” is not applicable. Food and related items are not used directly in the rendition of United’s common carrier service. Nor is the purchase of such items by United for service to its passengers a “sale at retail” for resale that would be exempt under the provisions of Code § 58-441.2(c). And I find no merit in United’s contention that the tax would impose a direct burden upon interstate commerce. Therefore, I concur with the majority in holding that the trial court erred in ruling that food and related items were entitled to exemption.
I cannot agree with the majority that all the other tangible personal property in controversy is exempt because it is used directly in the rendition of United’s common carrier service. Such a holding cannot, in my view, be reconciled with the principles recently approved by us in Commonwealth v. Community Motor Bus, 214 Va. 155, 198 S.E.2d 619 (1973), and reaffirmed in Webster v. Department of Taxation, 219 Va. 81, 245 S.E.2d 252 (1978).
The majority opinion correctly points out that the language of the exemption provided in Code § 58-441.6 (u) for airlines parallels the language of Code § 58-441.6(h) which sets forth the exemption of tangible personal property sold or leased to a motor vehicle common carrier for use or consumption “directly in the rendition of its public service”. We narrowly construed the word “directly” in the exemption provision of Code § 58-441.6(h) in Community Motor Bus to include “only such essential tangible personal property used immediately and principally by a common carrier to keep its motor vehicles on the road in performance of its public service”. Id. at 159, 198 S.E.2d at 622. We also held that items which are essential to operation of a business but are not an immediate part of public-utility service are not exempt and that exemption is not provided merely because the taxpayer is required by law to comply with certain conditions.
In Webster Brick, we noted that since adoption of the 1971 Constitution we have applied the mandate of strict construction against taxpayers in all cases where exemptions were sought under Code § 58-441.6; we resolve any doubt against one claiming the exemption; and we accord great weight to the construction placed upon the statute by a state official charged with its administration.
*394While the majority opinion does not disavow these guidelines and, indeed, restates them with approval, its effect is to establish a new and broader definition of “direct use” applicable only to common carriers by air. For example, in approving the exemption of anti-hijacking surveillance equipment, the majority recognizes that this equipment is not per se exempt merely because it is required by federal law. However, the majority goes on to hold that the “direct use” exemption applies to this equipment because of the potential culpability of an air carrier for failure to provide adequate protection against air piracy. This would seem to extend the definition of “direct use” far beyond that contemplated by Community Bus.
The exemption of the highly sophisticated electronic computer system known as “Apollo” was also based upon its direct use in the furnishing of air carrier service. That some of the data furnished by the Apollo system, such as weather information, flight plans, fuel limitations, cruising altitudes, and weight limits, are used directly in providing common carrier service is not denied by the Department of Taxation. But, insofar as the Apollo system comprises reservation and ticketing equipment, the Department contends, and I agree, that the exemption should not apply. As to this category I would remand the case for a determination of the property not entitled to exemption.
By the same reasoning I cannot agree that aircraft passenger and baggage servicing equipment, while useful and even essential in maintaining an airline’s competitive marketing position, is used directly in the rendering of common carrier service by air under the guidelines heretofore approved by us.
Although it is a very close question, I concur in the majority view that under § 210 of the Airport and Airways Development Act, effective July 1,1970, the Department of Taxation has jurisdiction to impose sales and use taxes on United’s tangible personal property at Washington National Airport, except for fuels for aircraft and items similar to fuels used in servicing aircraft.