Court Opinion

ID: 9796185
Source: CourtListenerOpinion
Date Created: 2023-08-31 03:51:28.430502+00
Date Added: 2024-06-11T08:47:52.770558
License: Public Domain

OPALA, J.,
with whom TAYLOR, V.C.J., joins, dissenting
T1 In publiclaw litigation the duty is ours-neither that of the litigants nor that of the trial court-to frame the issues to be resolved on review. The court decides this case today solely on the issues pressed by the taxpayer and conveniently forgets that this is not a private controversy but one in which this court alone is required to formulate the issues to be reached for disposition.1
12 As I analyze the record before us, the sole issue that is dispositive of the case and must be reached here is whether Oklahoma Goodwill Industries (Goodwill or taxpayer) presented below a stale claim that is barred by laches and estoppel for Goodwill's failure to raise the issue within a reasonable time after the taxpayer first knew or should have known that the tax stood imposed by those in authority.
13 In 2008 the Oklahoma Employment Security Commission (OESC or taxing authority) ruled that Goodwill employees who provide janitorial services at Tinker and State office buildings under state and federal contracts were entitled to unemployment compensation benefits. Today's reversal of that decision rests entirely on Goodwill's own analysis that the services of those individuals fall within the statutory exception from unemployment taxes.2
14 As I view the case before us, the burden to contest the applicability of the tax fell on the taxpayer when it first knew or should have learned of OESC's position in this matter.3 Goodwill utterly failed to bring here a record demonstrating that its claim is not stale. The record does not show that Goodwill timely resisted the application of the tax to its employees working at Tinker and State office buildings. On the other hand, clear indicia present in the record show that prior to 2002 an earlier Good*546will management had, for an indeterminate period of time, (a) accepted the rate and applicability of the unemployment insurance tax to its employees who work at federal and state facilities and (b) reported the wages of these individuals on its quarterly statements to the OESC.4 By these reports Goodwill has represented to the taxing authority that the employment of all similarly classified persons is not statutorily exempt from coverage. It was not until the appointment of a new president in 2002 that Goodwill changed its position. It now insists on pressing for judicial relief from its earlier self-assessed tax liability.
15 There is a clear distinction between challenging the very applicability of a tax and contesting the amount of the assessment. With each change of assessment, a taxpayer is given a new claim and another opportunity timely to challenge the assessed amount. But at the initial assessment of a tax, a taxpayer must act promptly to challenge the applicability of that assessment to the taxpayer who refuses to concede that the levy is proper.
T 6 An unemployment tax is an ever recurring levy that does not require an annual reassessment. The tax stands assessed at the same rate by operation of law and continues until it is changed by the Legislature. A taxpayer makes a self-assessment of its unemployment tax liability based on the payroll.5 When the tax is continuing and the taxpayer remains silent for a considerable time, the taxing authority may and will assume that the tax was not improperly imposed. A taxpayer must be diligent in challenging the applicability of a tax by timely notice to the proper government authority and in seeking a hearing on the contested issue.
T7 Goodwill should have challenged the applicability of the unemployment tax when it first employed persons under the federal and state programs and reported their wages to the OESC. By its self-assessment and classification of these individuals for unemployment benefits over a long period, Goodwill must now be viewed as having known of OESC's legal position with respect to this controversy. Because Goodwill waited for a long time after it acquired knowledge of, or should have learned of, OESC's position to contest its liability for the tax, Goodwill presented in this case a stale claim. That claim stands barred by laches and estoppel.6 Goodwill cannot raise its selected *547issue for judicial resolution until the Legislature changes the tax either as to the rate or manner in which it is to be collected or the OESC in some fashion alters its position visa-vis the taxpayer. From my review of the record, the only change that ever occurred here was Goodwill's altered perception of disadvantage from surrounding cireum-stances but the government's position never underwent any changes.
[ 8 It is for these reasons that I would hold this claim barred from judicial recognition as rendered stale by Goodwill's long-standing inaction. In short, Goodwill's hope for tax exoneration must fail in its entirety.

. The question of employer's liability for unemployment insurance taxes presents for our resolution an issue of public law. When confronting a matter of public law, this court may grant corrective relief on any applicable legal theory dis-positive of the case and supported by the record. Schulte Oil Co., Inc. v. Oklahoma Tax Com'n, 1994 OK 103, ¶ 7, 882 P.2d 65, 69 (a question of tax liability presents a public-law controversy); Yeatman v. Northern Oklahoma Resource Center of Enid, 2004 OK 27, ¶ 15, 89 P.3d 1095, 1101 (when resolving a public-law question, we are free to choose sua sponte the dispositive public-law theory although the wrong one is advanced); Amos v. Spiro Public Schools, 2004 OK 4, ¶ 7, 85 P.3d 813, 816.

. For the provisions of the challenged unemployment tax exemption statute see 40 0.$.2001 i-210(7)(d).

. See, eg., R.H. Stearns Company v. United States, 291 U.S. 54, 54 S.Ct. 325, 328, 78 L.Ed. 647 (1934) (the burden is on the taxpayer who seeks a refund to prove the allegation that an overassessment was illegally entered for the previous year).

. According to the president of Goodwill (a) after she was appointed to that position in 2002 she decided that the terms of § 1-210(7)(d) exempted the wages of the consumers involved here from unemployment taxes and (b) on 1 January 2003 Goodwill stopped reporting their wages to the OESC. She believed the consumers' wages that had been reported and paid prior to 2002 would have fallen under the statutory exemption. She did not know why Goodwill failed to claim the exemption before 2002, but she believed those pre-2002 wages were wrongly reported. The transcript of proceedings held on 28 January 2004 before the OESC Assessment Board shows at pgs. 81-82:
Q. [OESC counsel] And one of the things that's changed was that you stopped reporting wages to us. And that's what I'm saying-A. [Goodwill president] I think we reported wrongly before. I think it was incorrect. I don't know why it was incorrect before, but I know it was incorrect before. People that had wages reported prior to 2002, who were in the rehabilitation program, would have fallen under this statute. I don't know why that exemption was not claimed at that time.

. The unemployment compensation tax is akin to income tax which is a continuing assessment on the income and runs from year to year. In Hudson v. U.S., 82 Ct.Cl. 15, 12 F.Supp. 620 (Ct.Cl.1935), the court stated the "income tax is a general tax on all income;" "it is a continuing tax, usually divided for convenience in collection into periods of one year." See also U.S. v. Jefferson-Pilot Life Ins. Co., 49 F.3d 1020, 1022-23 (4th Cir.1995), where the court dealt with a "continuing tax levy on salary or wages" payable to a taxpayer on a recurring basis. The court explained that the continuing levy provision of the federal statute was designed to ease the substantial administrative problems that would be faced if the IRS could only impose successive levies upon remuneration contractually owed a defaulting taxpayer for personal services. Id.

. A proceeding to recover a refund of overpayment of unemployment taxes is in its nature equitable and governed by equitable principles. State of Oklahoma ex rel. Oklahoma Employment Security Commission v. Sanders, 1956 OK 262, ¶ 0 syl. 2, ¶ 7, 304 P.2d 287, 288-89. Since, in this type of action, the plaintiff must recover by virtue of a right measured by equitable standards, it follows that it is open to the defendant to show any state of facts which, according to those standards, would deny him or her the *547right. Stone v. White, 301 U.S. 532, 534-35, 57 S.Ct. 851, 852-53, 81 L.Ed. 1265 (1937).