Court Opinion

ID: 8168208
Source: CourtListenerOpinion
Date Created: 2022-09-09 21:05:36.356414+00
Date Added: 2024-06-11T16:39:42.138421
License: Public Domain

CROCKETT, Chief Justice
(dissenting) :
I cannot agree with the main opinion because to my mind it involves a misapplication of the facts in relation to the controlling statute and departs from previously established decisional law in an unwarranted overturning of the conclusion arrived at by the Tax Commission. Notwithstanding our prerogatives on review,1 due to the assumed expertise of the Tax Commission because of its specialized knowledge and experience in its field and its advantaged position with respect to the proceeding involved, this court has recognized its duty to indulge some deference to the Commission’s findings and conclusions and not overturn them unless they are shown to be clearly erroneous in that there is no reasonable basis in the evidence upon which they can be sustained.2
After a full hearing and consideration of all of the pertinent facts relating to the type of transaction here involved, which is the leasing of custom-made billboards for a term of years, the Commission made the following findings, which, as I view it, are controlling and have a reasonable basis for support in the evidence: that in the class of transactions in question, the clients of the plaintiff obtain a right of continuous possession and use of the billboards furnished by the plaintiff; that they exercise a proprietary interest and control over them; and that if the plaintiff had sold the billboards to the clients, there would have been a sales tax, so that the transactions come within the meaning of Sec. 59-15-2 (g) U.C.A.1953, quoted in the main opinion.
If these findings and the Commission’s conclusion are to be overturned, it should be incumbent upon the court to state the reasons with clarity, so that the findings *59are not merely brushed aside. With respect to the right of continuous use the opinion states, “ * * * no use thereof is had unless it be thought that calling attention of the public to the advertising business is a use. * * * ” and that “ * * * [W]e thing the Legislature had in mind a different use than this evanescent possibility.” What the statute states is that there be given the lessee the right of continuous possession or use of the personal property. The opinion correctly admits that in such a transaction there would be sales tax if the billboards were sold outright to the client. It is submitted that this is the very type of transaction in which the statute referred to was designed to prevent the use of a lease instead of a sale as a subterfuge to escape payment of a sales tax.
Some question may be raised as to the lessee’s right of possession of the billboards, since they are usually on other people’s land and the contracts do not give them any specific right to detailed physical control. On the other hand, the right to specify the location and manner of use is effectively in the hands of the client who pays for the service. Inasmuch as he has this right to exercise dominion over the billboard, I do not see how it can fairly and logically be said that the Commission was in error in its finding that he has such a property interest as to amount to a “right of possession” within the meaning of the statute.
In regard to the provision that the tax should be imposed if the client has the right to the continuous use of the property, the decision of the Commission is on even firmer ground. Suppose the client did in fact purchase the sign: what possible use could he put it to other than the use for which he leases it from the plaintiff. If placing the sign along public thoroughfares and advertising his business on it is not a use of the sign, but instead is only an “evanescent possibility,” I confess my inability to perceive what a “use” of such a sign would be. Without belaboring the obvious in this regard, it should further be noted that the record squarely supports the Commission in that one of the plaintiff’s own clients who testified at the hearing said that they “leased the privilege to use’’ the signs.
The point made that some importance should be attached to the fact that the Commission has not heretofore taxed these billboard transactions is not persuasive. The record is devoid of any indication that the matter has ever previously been before the Commission, or that it has made any determination thereon.
The fact that the materials used to construct the signs amounted to only about 15% of the total charge to the client is not of controlling importance. It is the nature of the final product which is sold or leased, rather than the original value of the raw materials of which it is made, in relation to *60the skill and labor necessary to produce it, which determines whether it is taxable.3 It should hardly be necessary to state that the Commission was not obliged to follow the opinions of plaintiff’s client witnesses, obviously interested in the nontaxation of these billboards, who said they considered they were paying for a service.
The analogy suggested of a barker rendering a personal service by using a megaphone calling attention to one’s business, is so overdrawn and unlike the leasing of these billboards that it can serve only to emphasize the basic unsoundness and difficulty encountered by the main opinion’s attempt to justify the overturning of the judgment of the Tax Commission.
It is difficult to appreciate why reliance is placed on the Commission’s regulation S-65 that advertising space in newspapers, magazines or otherwise is not subject to sales tax. The running of advertising in newspapers and magazines is quite obviously something of a different character which does not in any way involve the possession or use of tangible personal property as does the leasing of these billboards. The latter are tangible personal property, the signs themselves, which, as the main opinion admits, would be subject to sales tax if an outright sale were made. This is the premise which justifies the imposition of the tax.
Reasoning from what I have said above leads me to these conclusions: that the Tax Commission was within its prerogative in making the determination that the leasing of these billboards for a term of years was a transaction which well may be considered as a substitute for a sale and which “would be taxable if an outright sale were made,”' and therefore under the provision of Section 59-15-2(g) U.C.A.1953, was subject to a sales tax; and that under the Rules of Procedure hereinabove quoted, there is no' basis upon which this court can properly nullify its findings and decision. Accordingly, they should be sustained.

. U.C.A. 59-15-14.

. Western Leather and Finding Co. v. State Tax Commission of Utah, 87 Utah 227, 48 P.2d 526; McKendrick v. State Tax Commission, 9 Utah 2d 418, 347 P.2d 177.

. See discussion in McKendrick v. State Tax Comm.; see also Western Leather and Finding Co. v. State Tax Commission of Utah, supra; Young Electric Sign Co. v. State Tax Commission, 4 Utah 2d 242, 291 P.2d 900.