BCN Telecom, Inc. v. Assessor
151 A.3d 497
| Me. | 2016Background
- BCN Telecom operated in Maine (Mar 1, 2008–Oct 31, 2011) as both a CLEC and an IXC, reselling local and long‑distance telephone services to business and residential customers.
- BCN billed certain multi‑line business customers a monthly line item labeled “PICC: Primary InterExchange Carrier Charge,” charged per line regardless of calls made.
- The billed “PICC” amounts far exceeded BCN’s actual PICC costs (nationally BCN paid $386,802.46 in PICCs but billed $6,736,257.78 as “PICC”; Maine billed $825,940.30). BCN limited the charge to the federal maximum PICC amount and used it both to recover costs and to generate profit.
- Maine Revenue Services assessed service provider tax on the “PICC” revenues as part of the sale price of telecommunications services, assessing taxes, interest, and affirming on reconsideration and before the Board of Tax Appeals.
- The Superior Court granted BCN summary judgment, holding the charges were not part of the sale price and, alternatively, were exempt as interstate telecommunications. The State Tax Assessor appealed.
Issues
| Issue | Plaintiff's Argument (BCN) | Defendant's Argument (Assessor) | Held |
|---|---|---|---|
| Whether BCN’s billed “PICC” charges are included in the statutory “sale price” for telecommunications services | The charges are access/recovery fees, not consideration for telecom services, and thus outside the sale price | The charges were part of the total consideration customers paid for telecommunications services and fall within the defined “sale price” | Held for Assessor: the charges are part of the sale price and subject to tax |
| Whether the charges are exempt as sales of interstate telecommunications services | BCN: the label and origin (PICCs are federal interstate charges) make them interstate and exempt | Assessor: BCN provided no evidence linking billed amounts to interstate services; billed amounts exceed PICC costs, so exemption not shown | Held for Assessor: BCN failed to make a prima facie showing the exemption applied |
| Burden on summary judgment over tax exemption | BCN: exemption should be applied where FCC‑related charge exists | Assessor: exemption is narrowly construed; taxpayer bears burden to show applicability on summary judgment | Held: exemptions construed narrowly; taxpayer (BCN) failed to meet burden |
| Remedy / result on appeal | BCN sought affirmance of summary judgment in its favor | Assessor sought vacatur and affirmation of tax assessment | Held: Superior Court judgment vacated; remanded to enter judgment affirming the Assessor’s decision |
Key Cases Cited
- Camp Walden v. Johnson, 163 A.2d 356 (Me. 1960) (tax statutes construed narrowly against government)
- Scott Paper Co. v. State Tax Assessor, 610 A.2d 275 (Me. 1992) (statutory interpretation gives effect to legislative intent/plain meaning)
- Blue Yonder, LLC v. State Tax Assessor, 17 A.3d 667 (Me. 2011) (de novo review of superior court decisions on tax appeals)
- Brent Leasing Co. v. State Tax Assessor, 773 A.2d 457 (Me. 2001) (tax exemptions construed narrowly)
- Bobbins v. State Tax Assessor, 536 A.2d 1127 (Me. 1988) (tax exemption not extended beyond clear scope)