Court Opinion

ID: 9529359
Source: CourtListenerOpinion
Date Created: 2023-08-07 03:50:07.918285+00
Date Added: 2024-06-11T13:27:45.408360
License: Public Domain

KAUGER, Justice,
dissenting.
City Vending of Muskogee, Inc. (City Vending) argues that the Oklahoma Tax Commission’s ruling was void for lack of jurisdiction, and that the unstamped cigarettes sold to Indian Tribes were exempted by virtue of the Commerce Clause of the United States Constitution.1 The United States Supreme Court in Oklahoma Tax Comm ’n v. Citizen Band Potawatomi Indian Tribe, — U.S.-, -, -, 111 S.Ct. 905, 908, 912, 112 L.Ed.2d 1112, 1118, 1123 (1991), did not address the Commerce Clause; however, it held that under the doctrine of tribal sovereign immunity, the State cannot tax the sale of cigarettes to Indians. It also found that the State can collect taxes on sales to nontribal members.2
In Potawatomi, the United States Supreme Court offered the Tax Commission suggested alternatives it might pursue to collect the tax from nontribal members. The Court, while recognizing that the most reliable solution was Congressional action, suggested that states might collect sales tax from cigarette wholesalers. The majority opinion is bottomed on the Supreme *111Court’s solution. This might be appropriate relief — had the Oklahoma Legislature so provided. Here, the majority is not writing upon a clean slate. It has, by judicial fiat, amended § 302 apparently because the United States Supreme Court “in an effort to be helpful” offered some gratuitous advice unrelated to the reality of the Oklahoma statutes.
Because the majority has held that we need not address state jurisdiction to tax tribal members, this case turns not on cigarettes, tribal immunity, jurisdiction, or tax stamps; rather, it is a matter of statutory construction. The majority has refused to apply the statutes as written and has decided sua sponte to amend the controlling statute to add the wholesaler to the taxation chain. The Oklahoma statute, 68 O.S. 1991 § 302 provides that:
"... The impact of the tax levied by the provisions of this article is hereby declared to be on the vendee, user, consumer, or possessor of cigarettes in this state, and, when said tax is paid by any other person, such payment shall be considered as an advance payment and shall thereafter be added to the price of the cigarettes and recovered from the ultimate consumer or user_ Every re-toiler who makes sales of cigarettes within this state to persons for use or consumption shall separately show the amount of tax paid as evidenced by appropriate stamps on each package of cigarettes sold, and the tax shall be collected by the retailer from the user or consumer. ...”
Although the majority opinion fails to mention § 302, it has rewritten it in order to shift the responsibility for payment of cigarette taxes for all the unstamped cigarettes sold to Indian Tribes to the cigarette wholesaler. Instead, with certain exceptions, the majority finds that under 68 O.S. 1991 § 304 and § 305 the wholesaler is responsible for buying and affixing the tax stamps to all cigarettes it sells.3 Without further statutory analysis of § 302, § 304, § 305, or 68 O.S.1991 § 1356,4 the majority finds that the wholesaler is responsible for the sales tax because the wholesaler failed to show either any statutory exemption or to identify the Indian tribe’s ultimate consumer.
The only exception to the duty to pay taxes by the wholesaler allowed by the majority opinion occurs if the wholesaler can establish an exemption under 68 O.S. 1991 § 310 and § 321.5 Indian tribes are *112not specifically included within either of these statutory exemptions. However, sales to the United States are.
The sales in question were made to three Indian tribes. One of the tribes, the Citizen Band Potawatomi, furnished the wholesaler with a copy of a letter from the Oklahoma Tax Commission which stated:
“In reply to your letter of April 26, 1978, please be advised we recognize the Citizen Band Potawatomi Indians of Oklahoma as being exempt from sales tax on your purchases of tangible personal property under the provisions found in Paragraph (i), Section 1305, Article 13, Title 68, O.S.1971."6
Title 68 O.S.1971 § 1305(i) provided that sales to the United States Government, the State, or any of its political subdivisions were exempt from sales tax.7 Section 1305 has been repealed. Nevertheless, the same exemption is now found in 68 O.S.1991 § 1356.8 It provides exemptions to the United States government, the state of Oklahoma, its political subdivisions or agencies of those subdivisions. Because the tribe is not an arm of the state, its exemption must be on a footing with the only other sovereign nation listed — the United States.
Section 321 provides that all sales to the United States are exempt from the cigarette stamp excise tax. Because the Tax Commission interpreted United States within the meaning of § 1356 to include Indian Tribes as sovereign nations for the purposes of sales tax exemption, the exemption statute extends to Indian Tribes. The Commission, by continually interpreting "United States” to include Indian Tribes in § 1305 and now § 1356, has imparted to this term the character of a term of art. This is particularly evident because it is used in the same statutory setting with the sales tax exemption statute.9 The longstanding construction given to a statutory provision is given great weight. It cannot be undone by the Commission — Legislative amendment is required to change the longstanding construction.10
The concurring in judgment opinion relying principally on § 305 reaches the same result by finding that the wholesaler’s withdrawal of the cigarettes with affixed stamps from storage for sale or distribution marks the taxable event. According to this scenario, the removal from storage mandates that the wholesaler collect the tax from the retailer. However, neither § 302 nor § 305 support this position. Section 302 specifically provides that the retailer shall collect the tax from the user or consumer. Under § 305, several parties are responsible either for affixing stamps or paying the stamp tax: 1) the wholesaler is required to affix stamps when the cigarettes are removed from storage and is only liable for taxes when the cigarettes are lost, unaccounted for or stolen; 2) a retailer can be responsible for affixing stamps to cigarettes if the cigarettes are purchased from an out-of-state wholesaler who is not required to stamp the cigarettes under Oklahoma law; and 3) an unlicensed consumer is required to pay the stamp tax if it purchases unstamped cigarettes from the wholesaler.
The view expressed by the concurring in judgment opinion is internally inconsistent with § 305 because: 1) an out-of-state *113wholesaler who removed the cigarettes from storage is neither required to stamp the cigarettes nor charge the retailer for the stamp tax because the retailer becomes responsible for affixing the stamps; and 2) the statute specifically states that the unlicensed consumers are responsible for the taxes on unstamped cigarettes. Had the Legislature viewed the taxable event as the moment the cigarettes were removed from storage it would be unnecessary to include provisions for the out-of-state wholesalers — tax stamps would have been required. Even more obvious is that under § 305 the unlicensed consumer pays the stamp tax directly to the Oklahoma Tax Commission. If the taxable event were the removal from storage logic would assume that the wholesaler would be required to collect the tax from the unlicensed consumer.
The goal of statutory construction is to determine the intent of the legislature through the language used.11 Under § 305(f), the wholesaler is responsible for cigarette taxes only if the unstamped cigarettes are lost, stolen or unaccounted for in transit, storage or otherwise. The cigarettes in question were not lost or stolen. The issue is whether the cigarettes were “accounted for” by the wholesaler. The Superior Court of Connecticut in Allied Grocers Co-op, Inc. v. Tax Comm’r, 36 Conn.Supp. 59, 411 A.2d 313, 314 (1979), interpreted a similar statutory provision. The Court using the natural and usual meaning of the word “unaccounted ” determined that it meant that the distributor would not be able to tell where the cigarettes went for ultimate sale to the consumer. This interpretation is supported by the Committee Comments which accompanied the enactment of subsection (f) of § 305. The Legislature provided in the Comments that the new subsection raised a presumption of consumption within the state and placed the burden on the last person who had the incidents of ownership or possession of the unaccounted-for cigarettes.12 Under the plain and clear meaning of the statute accompanied by the committee comment discussing subsection (f), it is evident that the Legislature did not intend for the wholesaler to be responsible for cigarettes which are not stolen or lost. City Vending can account for the cigarettes. All were sold to Indian tribes. Here, the last parties having incidents of ownership were the Indian tribes, not City Vending.
Statutes must be construed as a consistent whole in harmony with logic, and every portion or part of a statute should be given effect if possible.13 We presume that the Legislature does not act in vain.14 The Legislature stated explicitly in 68 O.S.1991 § 302, that the retailer shall collect the tax from the user or consumer.15 Under our statutory scheme, the ultimate burden of tax collecting is upon the retailer — not the wholesaler. If the legislative intent were for the wholesaler to collect the tax, the wholesaler would be included in the text of § 302 and it would not explicitly require the retailer to collect the tax. Section 305(f) would not provide an exemption for accounted-for sales. Under this analysis, the wholesaler is not responsible for taxes when it can account for the cigarettes.
*114Under the majority’s opinion, the wholesaler is required to know an Indian tribes’ ultimate consumer — Indian or non-Indian— and pay taxes accordingly. There is no provision in the statutes which requires the wholesaler to ascertain the identity of the retailer’s ultimate consumer. Assuming arguendo, that this result could be accomplished, it would require a statutory amendment by the Legislature — not by this Court — to reach this result. In fact, the Legislature has enacted legislation, which was signed by the Governor on May 28, 1992, on this very issue. It amends the Act to allow tribes to enter into tax compact agreements with the State and to provide for the wholesaler to be responsible for the cigarette tax on cigarettes sold to tribally owned or licensed stores which are not included in a compact agreement.16
The circumlocutionary reasoning in the concurring in judgment opinion will not stand when the new Act is read with the previous statutes. The concurring in judgment acknowledges the new Act; however, it fails to understand the significance of Section 11 of the new act — the provision which places the cigarette tax responsibility on the wholesaler — which would not be necessary if the State could already collect the cigarette tax from the wholesaler. I must dissent from the majority opinion because 68 O.S.1991 § 302 does not place the burden of taxation upon the wholesaler when the cigarettes can be traced to an identifiable purchaser exempt from taxation.

. United States Const, art. I, § 8, cl. 3, provides:
“To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;”

. This accords with the recent decision by the 10th Circuit Court of Appeals, Sac and Fox Nation v. Oklahoma Tax Comm., 967 F.2d 1425 (10th Cir.1992).

. Title 68 O.S.1991 § 304 provides in pertinent part:
"Every manufacturer, wholesaler, warehouseman, jobber or distributor of cigarettes in this state, as a condition of carrying on such business, shall annually secure from the Tax Commission a written license, ...”
Title 68 O.S.1991 § 305 provides in .pertinent part:
"... (b) Every retailer who has received cigarettes from a manufacturer, wholesaler, ... not required to secure a license as provided for under Section 304 of this Code, or to affix stamps as required under the preceding paragraph, shall, ... affix stamps upon all cigarette packages ...
(c) Any unlicensed consumer who buys direct from any distributor, jobber, manufacturer, warehouseman, or wholesaler, ... any cigarettes in excess of forty (40), at any one time to which are not affixed the stamps required by this Article shall, ... secure from the Tax Commission a written license ... and shall post with the Commission a surety bond ... conditioned that he will comply with the rules and regulations of the Tax Commission and pay all taxes and penalties and affix to all 835 P.2d — 5 such cigarettes the proper tax stamps as provided by law, ...
(f) Any person, including distributing agents, wholesalers, jobbers, carriers, warehousemen, retailers and consumers, having possession of unstamped cigarettes in this State shall be liable for the tax on such cigarettes in case the same are lost, stolen or unaccounted for, in transit, storage or otherwise, and in such event a presumption shall exist for the purposes of taxation, that such cigarettes were used and consumed in Oklahoma.”

. Title 68 O.S.1991 § 1356 provides in pertinent part:
"... There are hereby specifically exempted from the tax levied by this article:
(A) Sale of tangible personal property or services to the United States government or to the State of Oklahoma, any political subdivision of this state, or any agency of a political subdivision of this state; ...”

. Title 68 O.S.1991 § 310 provides in pertinent part:
"(a) Any person who sells cigarettes in interstate commerce shall, after filing proper bond with the Tax Commission, be excused from *112affixing stamps to the cigarettes he sells and ships to a person in some other state....”
Title 68 O.S.1991 § 321 provides:
"All cigarettes sold to veterans hospitals and state operated domiciliary homes for veterans located in the State of Oklahoma, for distribution or sale to disabled ex-servicemen or disabled ex-servicewomen interned in, or inmates of, such hospitals, or residents of such homes, and all sales to the United States are hereby exempted from the stamp excise tax levied by this article."

.Exhibit A of the Brief of the Appellant dated March 31, 1986.

. Title 68 O.S.Supp.1971 § 1305(i) provides in pertinent part:
"(i) Sales to the United States government, State of Oklahoma, or any of its political subdivisions."

. Title 68 O.S.1991 § 1356 see note 4, supra.

. Atchison, Topeka and Santa Fe Ry. v. United States, 209 F.Supp. 35, 42 (N.D.Ill.1962).

. Oral Roberts Univ. v. Oklahoma Tax Comm’n., 714 P.2d 1013, 1016 (Okla.1985).

. State ex rel. Macy v. Freeman, 814 P.2d 147, 153 (Okla.1991); Ledbetter v. Oklahoma Alcoholic Beverage Laws Enforcement Comm'n, 764 P.2d 172, 179 (Okla.1988).

. Title 68 O.S.Supp.1965 § 305, Committee Comments, provides:
"Subsection (f) is new. It raises a presumption of use or consumption within this State of cigarettes lost, stolen or unaccounted for, placing the liability for taxes on such cigarettes upon the, person who had the incidents of ownership or possession of the cigarettes at the time lost, stolen or unaccounted for.”

. Cowart v. Piper Aircraft Corp., 665 P.2d 315, 317 (Okla.1983).

. Cooper v. Dix, 771 P.2d 614, 617 (Okla.1989).

. Title 68 O.S.1991 § 302 provides in pertinent part:
"... Every retailer who makes sales of cigarettes within this state to persons for use or consumption shall separately show the amount of tax paid as evidenced by appropriate stamps on each package of cigarettes sold, and the tax shall be collected by the retailer from the user or consumer. The provisions of this section shall in no way affect the method of collection of such tax on cigarettes as now provided for by existing law_”

. Senate Bill 759 (1992) provides in pertinent part:
"SECTION 1. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 346 of Title 68, ...
A. The Legislature finds that:
1. Federal law recognizes the right of Indian tribes and nations to engage in sales of cigarettes and tobacco products to their members free of state taxation;
2. The doctrine of tribal sovereign immunity prohibits the State of Oklahoma from bringing a lawsuit against an Indian tribe or nation to compel the tribe or nation to collect state taxes on sales made in Indian country to either members or nonmembers of the tribe or nation without a waiver of immunity by the tribe or nation or congressional abrogation of the doctrine; and
3. The Supreme Court of the United States, in 'Oklahoma Tax Commission v. Citizen Band Potawatomi Indian Tribe of Oklahoma', suggested that a state may provide other methods of collection of state taxes on sales of cigarettes and tobacco products made by Indian tribes or nations to persons who are not members of the tribe or nation, such as entering into mutually satisfactory agreements with Indian tribes or nations....
C. The Governor is authorized by this enactment to enter into cigarette and tobacco products tax compacts on behalf of the State of Oklahoma with the federally recognized Indian tribes or nations of this state.... All sales in Indian country by those compacting tribes or nations and their licensees shall be exempt from the taxes levied pursuant to the provisions of Section 301 et seq., Section 401 et seq. and Section 1350 et seq. of Title 68 of the Oklahoma Statutes and Sections 4 and 9 of this act, ... SECTION 8. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 424 of Title 68, ...
The provisions of Sections 9 through 12 of this act shall not apply to a federally recognized Indian tribe or nation which has entered into a compact with the State of Oklahoma pursuant to the provisions of subsection C of Section 1 of this act or to a licensee of such a tribe or nation during the period that such compact is effective. ...
SECTION 11. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 427 of Title 68 ...
Every wholesaler, jobber or warehouseman doing business within this state and required to secure a license as provided in Section 415 of Title 68 of the Oklahoma Statutes may sell tobacco products to tribally owned or licensed stores in this state. It shall be the duty of the wholesaler, jobber or warehouseman to collect, report and remit the tax imposed by Section 10 of this act on the tobacco products inventory sold to a tribally owned or licensed store-”