960 N.W.2d 384
Wis.2021Background:
- Southwest (and AirTran) paid property taxes for assessment years covering 2012 and 2013 and later sought the Wisconsin "hub facility" property tax exemption under Wis. Stat. § 70.11(42).
- The hub definition requires a facility from which the carrier "operated at least 45 common carrier departing flights each weekday in the prior year" and served at least 15 nonstop destinations.
- Southwest initially filed no exemption claim; during a DOR audit it submitted flight data consisting of scheduled departures (not actual departures) and sought to consolidate Southwest and AirTran reports via Wis. Stat. § 76.075.
- DOR denied the request, citing improper mechanism, untimeliness, and that Southwest failed to meet the 45-departing-flights-per-weekday threshold (Southwest conceded several weekdays below 45 in 2013 and did not meet the threshold on many days in 2014).
- The circuit court granted DOR summary judgment; the court of appeals and the Wisconsin Supreme Court affirmed, holding the statute’s plain language requires operating (actual departures of) at least 45 flights every weekday with no averaging or weather/holiday exceptions.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Southwest qualifies for the hub exemption despite not operating 45 departures on some weekdays | Statute should be read "strict but reasonable": forgive days lost to holidays/weather; substantial compliance suffices | Statute plainly requires 45 departing flights each weekday; no exceptions | Court: No exception; plain text requires 45 departures each weekday; Southwest failed to qualify |
| Whether scheduled departures count as "operate"/"departing flights" | Scheduled flights should count toward the threshold | "Operate" and "depart" mean actual flights that leave, not merely scheduled ones | Court: "Operate"/"depart" require actual operation/departure; scheduling alone insufficient |
| Whether an annual average (e.g., >45 average per weekday) satisfies the "each weekday" requirement | Averaging (annual total / number of weekdays) should qualify carriers who meet the overall volume | "Each weekday" means every individual weekday; averaging inserts language not in statute | Court: "Each" means every; averaging not allowed; failing any weekday disqualifies carrier |
| Procedural challenge: use and timeliness of §76.075 adjustments / voluntary payment doctrine | Southwest sought retroactive adjustment and refund under §76.075 | DOR argued §76.075 was improper mechanism and claim was untimely; also raised voluntary payment doctrine | Court assumed without deciding some procedural points but resolved case on the statute's plain language; did not grant refund because substantive criteria not met |
Key Cases Cited
- State ex rel. Kalal v. Circuit Court for Dane Cnty., 271 Wis. 2d 633 (statutory interpretation begins with plain language)
- Covenant Healthcare Sys., Inc. v. City of Wauwatosa, 336 Wis. 2d 522 (tax exemptions construed "strict but reasonable")
- Columbus Park Hous. Corp. v. City of Kenosha, 267 Wis. 2d 59 (burden on claimant to prove entitlement to exemption)
- Kickers of Wis., Inc. v. City of Milwaukee, 197 Wis. 2d 675 (doubts resolved in favor of taxation; exemptions not extended by implication)
- State ex rel. Pierce v. Kundert, 4 Wis. 2d 392 ("each" construed as "every")
- Racine Educ. Ass'n v. WERC, 238 Wis. 2d 33 ("at least" establishes a minimum floor)
- Dawson v. Town of Jackson, 336 Wis. 2d 318 (court will not read words into statute that legislature omitted)
- Putnam v. Time Warner Cable of Se. Wis., Ltd. P'Ship, 255 Wis. 2d 447 (voluntary payment doctrine principles)