52 A.3d 941
Me.2012Background
- Sears challenges the trial court’s ruling that Linnehan Leasing applies retroactively to Sears’s bad debt sales tax credit claims.
- Sears sought retroactive application of Linnehan Leasing under a Chevron Oil Co. v. Huson three-part test; Sears urged selective prospectivity.
- The court ruled Linnehan Leasing retroactively would apply, based on evolution of law and application to the parties in Linnehan Leasing, but Sears would not qualify for the credit under the statute regardless of Linnehan.
- Sears asserted eligibility for the 2005-2006 bad debt sales tax credit under 36 M.R.S. § 1811-A; the relevant facts involve third-party creditors charging off debts and Sears being fully compensated.
- The plain reading of the statute shows that a retailer cannot claim the credit when a third-party creditor charged off the debt and Sears was fully compensated.
- The court affirms the judgment on alternative reasoning, without deciding retroactivity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Linnehan Leasing should apply retroactively | Sears: apply Linnehan Leasing retroactively using Chevron/Huson test. | State: apply retroactivity under Myrick selective prospectivity or plain-law approach. | Retroactivity unnecessary to decide; decision affirms on plain reading. |
| Whether the plain statutory reading bars two corporations from a single 'person' under 36 M.R.S. § 111(3) | Linnehan Leasing would allow broader grouping; Sears argues for retroactive relief. | Statute requires the separate meaning of entities; cannot treat two corporations as a unit. | Plain reading prohibits two corporations as a unit under § 111(3). |
| Whether Linnehan Leasing applies to Sears under the doctrine of selective prospectivity (Myrick) | Myrick supports selective prospectivity preserving reliance. | Selective prospectivity applies only if relied upon; not persuasive here. | Court acknowledges selective prospectivity but bases decision on plain statutory reading. |
Key Cases Cited
- Linnehan Leasing v. State Tax Assessor, 2006 ME 33 (Me. 2006) (held two corporations cannot be treated as a single entity for bad debt credit)
- DaimlerChrysler Services North America, LLC v. State Tax Assessor, 2003 ME 27 (Me. 2003) (interpreted § 1811-A; credit allowed only for retailer who charged off the debt)
- Myrick v. James, 444 A.2d 987 (Me. 1982) (selective prospectivity if substantial public reliance and foreseeability concerns)
- Erlich v. Ouellette, Labonte, Roberge & Allen, P.A., 637 F.3d 32 (1st Cir. 2011) (cited for selective prospectivity signaling)
- Harper v. Va. Dep’t of Taxation, 509 U.S. 86 (U.S. 1993) (example of selective prospectivity concept in federal context)