Court Opinion

ID: 9649745
Source: CourtListenerOpinion
Date Created: 2023-08-23 15:08:01.702889+00
Date Added: 2024-06-11T18:12:14.253714
License: Public Domain

STEIN, J.,
dissenting in part.
I am in full agreement with the majority’s conclusion that the autobus excise tax, N.J.S.A. 48:4-20, discriminates against interstate commerce in violation of the Commerce Clause. I cannot, however, agree with the majority’s conclusion that Continental is not entitled to a refund.
Preliminarily, the majority fails to distinguish the taxes paid by Continental in connection with the interstate transport of passengers, which the Court today holds to be unconstitutional, from the taxes mistakenly paid by Continental for intrastate mileage traversed in regularly scheduled passenger service provided under the the authority of the PUC. According to the majority, Continental was a volunteer that paid its tax “under a mistake of law.” Ante at 549. However, the only tax paid by Continental under a mistake of law was the tax on intrastate *551mileage over routes approved by the PUC. R.S. 48:4-3. As the Tax Court noted, the balance of Continental’s taxes were not paid mistakenly but rather because they were mandated by the statute. 6 N.J.Tax 42, 58 (1983). Had Continental failed to pay the tax on interstate mileage, which we invalidate today, it would have been subject to revocation of its registration to operate autobuses in New Jersey. N.J.S.A. 48:4-30. As we noted in In re Fees of State Bd. of Dentistry, 84 N.J. 582, 589-90 (1980), “[i]t is well-established that the payment of a tax in order to avoid the loss of the payor’s right * * * to continue in business renders the payment involuntary and removes it from the ambit of the volunteer rule.” The majority’s application of the “volunteer rule” to the excise tax on interstate transportation of passengers is obviously misplaced.1
As the majority acknowledges, we noted in Board of Dentistry the established principle “that when a tax already collected is set aside by judicial decision, ‘the law raises an assumption to refund the money which can no longer be honestly retained.’ The taxing entity has ‘not a particle of right to the money in question,’ which is due to the taxpayer ‘according to principles of common honesty.’ ” Id. at 587 (citations omitted). That doctrine plainly applies to the tax which the Court today holds to be unconstitutional.
However, even the “volunteer rule,” on which the majority relies to deny Continental’s entire claim for refund, is of questionable application to the excise taxes paid mistakenly by Continental. Pursuant to the State Tax Uniform Procedure Law, N.J.S.A. 54:48-1 to 52-4, a statute enacted “to provide as far as feasible a uniform procedure to be followed by taxpayers *552in relation to any state taxes,” N.J.S.A. 54:48-3, the volunteer rule appears to be superseded. N.J.S.A. 54:49-16 provides as follows:
Where no questions of fact or law are involved and it appears from the records of the Commissioner that any monies have been erroneously or illegally collected from any taxpayer or other person or have been paid by any taxpayer or other person under a mistake of fact or law, the Commissioner may at any time, within two years of payment, unless a shorter limit is fixed by the law imposing the tax, upon making a record in writing of his reasons therefor, certify to the comptroller that the taxpayer is entitled to such refund and thereupon the comptroller shall authorize the payment thereof from the appropriation for such purpose. [Emphasis added.]
This statutory provision makes it clear that the legislative intent was to authorize the refund of taxes paid by taxpayers even under a mistake of fact or law.
The State Tax Uniform Procedure Law would appear to settle the matter of Continental’s claim for a refund with respect to both the tax mistakenly paid and the tax on interstate passenger transport which the Court holds to be unconstitutional. However, the majority points out that the State Tax Uniform Procedure Law only applies to a tax “which is payable to or collectible by the state tax commissioner,” N.J.S.A. 54:48-2, whose duties were subsequently transferred to the Director of the Division of Taxation. N.J.S.A. 52:27B-48. The majority concludes that since the taxes in question are payable to the Director of the Division of Motor Vehicles rather than to the Director of the Division of Taxation, the State Tax Uniform Procedure Law and its refund provisions are inapplicable.
I find this interpretation of the statute to be too restrictive. As the Tax Court appropriately pointed out, “[tjhere is no reason to distinguish among taxes paid to the State of New Jersey on the basis of which division of state government is the payee.” 6 N.J.Tax at 59. Such a construction of the statute is unreasonable, and we should not distort the legislative intent by so literal a reading. The Tax Court also observed that the State Tax Uniform Procedure Law imposes a two-year limitation on refunds of taxes paid to the Division of Taxation and concluded that the same limitation should apply to refunds of *553taxes paid to the Division of Motor Vehicles. Id. I find the reasoning of the Tax Court on this issue to be unassailable.
Accordingly, I respectfully dissent from that portion of the majority opinion that denies Continental’s claim for a refund.
Justice CLIFFORD joins in this opinion.

 The only support the majority is able to muster for its conclusion is the common law of Maine, which provides that "[m]ere protest without showing a purpose to avoid arrest of person or seizure of property does not preserve the right to recover taxes paid.” Berry v. Daigle, 322 A.2d 320, 326 (Me.1974) (citations omitted). This decision is not consistent with New Jersey law. See In re Fees of State Bd. of Dentistry; 84 N.J. 582, 589-90 (1980).