Court Opinion

ID: 9695787
Source: CourtListenerOpinion
Date Created: 2023-08-25 18:29:24.576791+00
Date Added: 2024-06-11T18:20:16.525509
License: Public Domain

SUNDBY, J.
(concurring in part, dissenting in part). The question is: Who "paid" the sales tax within the meaning of sec. 77.59(4), Stats. (1977)? Because I conclude that Dairyland and Badgerland "paid" the tax, I respectfully dissent from the majority opinion insofar as the majority holds that for taxable years prior to April 30, 1980, Dairyland and Badgerland lacked standing to file sales tax refund claims.
When A.O. Smith collected sales taxes from Dairy-land and Badgerland and remitted the taxes to the department, it was merely acting as the agent for the state. In reviewing secs. 77.52(1), (2), (3) and (4), Stats., we said that under this statutory scheme, "the retailer or seller is in practical effect an agent of the state for the collection of a tax imposed upon the consumer of tangible goods and the user of certain services." Midcontinent Broadcasting Co. v. Dept. of Revenue, 91 Wis. 2d 579, 587, 284 N.W.2d 112, 116 (Ct. App. 1979) rev'd on other grounds, 98 Wis. 2d 379, 297 N.W.2d 191 (1980).
*811The department and the majority read sec. 77.59(4), Stats. (1977) literally. I agree with Judge Learned Hand who said "There is no surer way to misread any document than to read it literally . . .." Guiseppi v. Walling, 144 F.2d 608, 624 (2d Cir. 1944) (concurring opinion), quoted in Massachusetts B. & Ins. Co. v. United States, 352 U.S. 128, 138 (1956) (Frankfurter, J. dissenting). A literal construction of sec. 77.59(4), Stats. (1977), leads to the result that a purchaser who has overpaid sales tax is dependent upon the seller to recover the overpayment. This construction assumes a degree of altruism in hardheaded business people I am not willing to assume. Further, this literal construction ignores the intent of the statute. The purpose of refund statutes is explained in Bull v. United States, 295 U.S. 247, 260 (1935), as follows: "In recognition of the fact that erroneous [tax] determinations and assessments will inevitably occur, the statutes, in a spirit of fairness, invariably afford the taxpayer an opportunity at some stage to have mistakes rectified."
The construction given to sec. 77.59(4), Stats. (1977), by the department and the majority negates this spirit of fairness. The construction is unreasonable. "It is well established . . . that the law favors rational and sensible construction, and that a construction which would produce an unreasonable and absurd result is to be rejected in favor of one producing a reasonable result." Midcontinent, 91 Wis. 2d at 591, 284 N.W.2d at 118.
Reduced to basics, the state holds money of Dairy-land and Badgerland to which it has no right. It's "[retention of the money [is] against morality and conscience," Bull v. United States, 295 U.S. at 260. This case is comparable in this respect to Appel v. Halverson, 50 Wis. 2d 230, 184 N.W.2d 99 (1971), where the commissioner of revenue raised a procedural defense to *812defeat a claim for refund of a sales tax deposit. The court was forced to sustain the defense but its dissatisfaction with the result was stated in terms no less applicable here:
[W]hen the question of refund first arose, the attorney for the revenue department recommended that the $300 be paid by the department to the lady who is the respondent here. If that advice had then been taken, before court proceedings, litigation expensive to the lady and to the taxpayers of the state could have been avoided. If the recommendation to make the refund is now followed, weight should be given to the equities of the situation, and, with the imperfections of the legal procedures admitted, that is a result devoutly to be wished.
Id. at 236, 184 N.W.2d at 103.
Similarly, regardless of any perceived "imperfections" in the refund procedures, returning to Dairyland and Badgerland money which is rightfully theirs is a result devoutly to be wished.