Ivory Homes, Ltd. v. Utah State Tax Commission
2011 UT 54
Utah2011Background
- Ivory Homes paid sales tax on purchases of concrete from Parson from July 2005 to August 2008 with invoices stating a single price and no separate delivery charges.
- In 2008 Ivory Homes learned that delivery charges could be non taxable if separately stated on an invoice, bill of sale, or similar document.
- Ivory Homes obtained a supplemental invoice from Parson that purportedly separated delivery costs from the purchase price, enabling a refund claim under Utah Code § 59-12-110(2)(a) (Refund Statute).
- The Utah Taxpayer Services Division denied Ivory Homes’ refund request; the Utah State Tax Commission also denied it after hearing Ivory Homes’ evidence.
- The Supreme Court affirmed, holding there were no delivery charges in the original transactions and the Refund Statute requires the Commission to err before a taxpayer is entitled to a refund.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether there were delivery charges in the original transactions | Ivory Homes argues delivery charges existed and were mispriced in the original invoices. | The Commission found no delivery charges in the original transactions. | No delivery charges in original transactions; no refund. |
| Plain meaning of Refund Statute requiring Commission error | Ivory Homes contends the statute allows refunds when overpayments occur or when the Commission errs. | The Court holds the Commission must err in receiving/collecting/ computing taxes for a refund. | Refund denied unless the Commission erred. |
| Ambiguity and construction of the Refund Statute | Statute ambiguity should be construed against the Tax Commission. | Statute should be narrowly construed in favor of the Commission when ambiguous. | Ambiguity resolved against Ivory Homes; the Commission’s interpretation upheld. |
Key Cases Cited
- Shea v. State Tax Commission, 897 P.2d 1214 (Utah 1995) (holds that refunds are tied to Commission errors in receiving/collecting taxes)
- CIG Exploration v. Utah State Tax Commission, 706 P.2d 1066 (Utah 1985) (interprets 'erroneously or illegally collected' in refund context)
- WebBank v. American General Annuity Serv. Corp., 54 P.3d 1139 (Utah 2002) (discusses ambiguity and extrinsic evidence in contract/benefit interpretation)