Chris & Dick's Lumber & Hardware v. Tax Commission

establishing the district in way (Utah Ct.App.1987), P.2d 644-45 cert. We, denied, challengers. disadvantaged the there- For P.2d reason, oversight we that that decline to consider the fore, mer conclude its of the challengers’ purported defect. only cross-ap a technical viewed peal. file City’s to failure true It is reversed, judgment and case is adversely impacted a subse- might have proceedings remanded for further consist- notice took without who quent purchaser opinion. ent with this assessment, need reach to collect not but ability district’s question of the HALL, C.J., and STEWART DUR- because person a from presented by HAM, JJ., concur. In circum- the facts. HOWE, C.J., having disqual- Associate copy file a to stances, failure a himself, ified participate does not herein. resolution and of the intention notice of it was not. Here fatal. might be challengers’ next address the trial cross-appeal from attempt to to improper it was not finding that court’s count the CHRIS & DICK’S LUMBER AND nonobjecting church as LDS HARDWARE, a Utah as its land was because property owner Petitioner, corporation, earlier, church had the As noted sessable. owner, it property included as not been than one-half of more appears that the STATE TAX OF OF COMMISSION of the protest the formation did owners UTAH, Respondent. However, we cannot reach district. No. 880188. issue. 4(d) Supreme the Rules of Court Utah. Rule the Utah Su preme requires explicitly that a no Court April cross-appeal timely tice of is no record of such a filed. There filing.11 Absent cross-appeal, respondent may not attack court judgment the respondent of the below. “[I]f judgment desires to attack the favor, change timely it in his he cross-appeal_” Terry file a v. Zions Inst., 701- Coop. Mercantile Trucking see also Cerritos No. Co. v. Utah Venture (Utah 1982); Halladay Cluff, 739 equity justice of the go or to the prscribed by Paragraph (a) does time otherwise However, any par- proceeding. rule, or assessment ty expires. whichever pro- by an or feeling aggrieved assessment 4(a) appeal Rule states that “the notice of re- her] his ceeding [or has not waived who quired by Rule 3 shall be filed with the clerk of provided 10-16-7 objections thereto days the district within after the court date of right commence have shall entry judgment appealed of the or order from.” municipality Appellees comply en- against They did not with this rule. action a civil apparently appellant’s furnished counsel levy of the assessment with a join or collection 24, 1988, captioned proceed- document dated October "In unlawful the and declare aside to set Supreme the Utah Court” and entitled "Notice of ings. Counter-Appeal.” copy Intent File A Code Ann. rehearing. petition attached to the That however, copy, filing stamp, does not reflect a rehearing, appellees 11. On petition for contend and no such document record. cross-appeal they a notice of did file Apparently, it was not filed with the clerk of the taxability of the should consider addition, district court or with this court. 4(d) property. Rules of Rule church LDS days the document seventeen after is dated (renamed April Supreme Court as of the Utah expiration fourteen-day period specified Procedure) Appellate Utah Rules 4(d) days expiration in rule and twelve after states: thirty-day period specified 4(a). in rule Appellees nothing by party, attempt appeal have done else to timely is filed notice of If a any preserve appeal appeal. party the issue for Under the file notice on which the of rule this court does not after the date have within filed, jurisdiction cross-appeal. appeal within the to hear the notice of first Bishop, City,

R. LaMar Lake Salt petitioner. Dam, Stephen

R. Paul Van G. Schwendi- man, Bryce Pettey, City, H. Salt Lake respondent.

ZIMMERMAN, Justice: Hardware, Chris & Dick’s Lumber and Inc., seeks a writ of review of a final decision of the Utah State Tax Commission ordering pay Chris & Dick’s to a 10 interest, penalty, plus on over untimely on an filed of sales tax return. Chris & Dick’s claims that the improperly penalty was assessed under the or, terms of section 59-15-5.1 of the code alternatively, of the stat- pro- ute is as to violate so the due cess clause of the fourteenth amendment United States Constitution. We af- firm. requires

Section 59-15-5.1 of the code prepay portion certain entities to of their liability by state and local sales tax 15th. Utah Code Ann. (Supp.

1989)). Dick’s, through its ac- argu- consider these two countant, return thir- Constitution. We filed its separately. ments days late. The Utah State ty-eight percent penalty levied a 10 Commission initial claim that the Chris Dick’s 59- & Dick’s under section against Chris 59-15-5.1(3) specified in section pertinent part: in 15-5.1(3), which what it con- is based on any “In addition to language of section 59- tends is the 59-15-5, there in payment provided Section 15-5.1(3). says that the words ... It “10% of total penalty of the shall be a 10% prepayment from the the return the prepayment the due from amount of charge per due” create a annum Utah prepayment return due.” date the to from the return’s due date that is run (current (1985) ver- Ann. Code in- through filing. date of Under this the (Supp.1989)).1 This the terpretation, sion & Dick’s calculates days pay- to be of ultimately determined as follows: number (38), by the of $9,287, Upon Dick’s ment is late divided number plus interest. Chris & 10%, year multiplied by in the hearing, a formal the commis- motion for multiplied by prepayment required the April in 1988. the sion affirmed ($92,874.93),equals $966.92. appealed directly to Chris & Dick’s court, jurisdiction has over decisions which appropriate begin with the under section 78-2-2 of the tax commission tax commission of review. The standard Utah Code of code. See previ to we should defer contends that 2—2(3)(e)(ii)(Supp.1989). § 78— 59-15-5.1(3) as constructions of section ous two- Dick’s mounts a appeal, On case, penalty. In the usual imposing flat under which pronged attack on the statute statutory construction are questions of First, it asserts imposed. courts, rely and for the matters of law improperly construed that the commission re of error” standard of on a “correction 59-15-5.1(3) flat 10 as view, according no deference to adminis due, by the tax percent penalty measured See, interpretation. e.g., agency’s trative charge per- an interest of rather than Tel. and Tel. v. Mountain States Williams cent, deter- of which should be the amount 796, Co., Tele 763 P.2d during year proportion of by mined Resellers v. Public Serv. communications improperly un- return Comm’n, 1029, (Utah which the remained lan- it filed. contends Dep’t Public Admin. Servs. of 59-15-5.1(3) guage is so Comm’n, of section 658 P.2d Serv. inter- imposes penalty 1983). it number of cir as to whether are a limited There deprivation agency’s interpreta charge constitutes cumstances where four- or rule be entitled in violation of the tion of of due deference, construction of as where the United States some of teenth amendment payment form manner determined provides: in the and 1. Section 59-15-5.1 prepay- by Commission. the State Tax Prepayment of and use taxes—Return sales (1) State Tax Commis- Except provided ments shall be made —Penalty. in Subsec- liability year, (2) any person whose tax under of June each tion sion on or before 15th Chapters and and Title beginning Title $96,000 (a) previous Chapter for the 9 was (3) of shall be The amount $24,000 (b) previous year, quarter, or against the of the taxes due a credit amount (c) liability is estimated tax whose payable quarterly for the and month, by determined the State more payment became due. In Commission, prepay less than shall provided payment for late state local tax the amount of 90% of 59-15-5, be a there shall Section May year. liability April each total amount of 10% the by rule shall establish State Tax Commission prepayment return is the date the due from guidelines regulation procedures due. determining liability tax under ver- Ann. 59-15-5.1 section. (Supp.1989)). sion at accompanied prepayment shall be pre- showing the amount of a return ty” the statute account the done should take into be assumed have been advisedly. agency’s expertise developed prac- from its Board Educ. the Granite tical, County, Dist. v. Lake 659 P.2d experience subject firsthand with the School Salt See, matter. e.g., Hurley v. Board Re- view the Indus. Support proposition (Utah 1988). However, present using meant a flat statutory interpreta- 59-15-5.1(3) “penalty” in the word straightforward rather gathered provisions in the from other type easily and of the we can settle part same of the code. Elsewhere title resorting statutory to the usual tools of “penalty” it is clear that the term Therefore, does not construction. this ease imposition used to refer to the of a one present an for occasion invocation time, nonapportionable charge, opposed exception, governed by general but apportionable ex interest rate. For rule. We do not defer to the tax commis- ample, specific various sections make a dis previous sion’s construction. by tinction between and interest enumerating them both. Section 59-15- statute, interpreting this 5(11) proscribes payment late of the sales plain meaning language look to the tax, imposing “penalties both and interest” legislative at intent. issue to discern payment. late Utah Code Ann. Legion See Allisen v. American Post No. 59-15-5(11) (current version at § (Utah 1988)(“Where 59-12-107(19) (Supp.1989)). Section 59- § statutory language unambig payments deficient due to 15-8 addresses uous, beyond this Court will not look cases, negligence in that statute, intent.”). legislative divine greater “there shall be added the $50 drafted, artfully does indicate in while ten cent of the total amount of the places that flat was in several a deficiency pre and interest at the rate First, imposed. tended to be the title of in section 59-11-16.” Utah Code states, creating part, the act (1985) (current Ann. 59-15-8 at version § filing providing act ... dates and “[a]n ” 59-12-110(5) (1987)). And section 59- § payments.... See payment 16-9 addresses deficiencies in the added). (emphasis 1984 Utah Laws ch. 64 by making consequence of use taxes a “penal uses the term pay “penalty the failure to the use tax a ty” percent charge the 10 to describe plus of such amount ... inter Third, imposed taxpayer. the sen on the prescribed est at the rate in section 59-11- prefaced by tence (1985)(re 16.” Utah Code Ann. 59-16-9 § stating clause “[i]n 1987). pealed payment....” for late Utah 59-15-5.1(3) (1985) (current Further, presence Ann. the mere of the clause § (Supp.1989)(empha “due from the date the return was due” version at § added)). not, “penal- language,2 of the term without additional cre sis These uses does Following analysis language imposed. add to this statute the dissent's 2. The dissent would only require support that an inter- would therefore not this court to in order to its conclusion was intended. If an interest insert into the statute to the time charged, by legislature, period over which the interest is to be were indeed intended peri- require of the time but would also us to determine what raises the troublesome period monthly yearly interest is to be as- that time od over which the be— perhaps quarterly. clearly or even That is sessed. While the dissent would insert legislative, judicial, "per im- concern. We also words annum" in the statute to avoid and not rate, weekly, monthly posing daily, reliance on Morrison- a closer note that the dissent's Commission, precludes Utah of the statute such an Merrill & Co. v. Industrial examination easy inapposite was due 18 P.2d 295 in this answer. 15th, quarterly payment case. That case involved the omission of while the full formula, disability July relatively point Given the decimal in a benefit sales tax was due 31st. clearly placement dates when the of which was indicated short of time between the prepayment due, quarterly payment Given the clear and and the became elsewhere obviously the statute. potentially monthly the decimal rate of interest could mistaken omission of charge. substantively fining 5.1 and not to alter apportionable ate an interest While this clause in other sections mechanism the statute. See 1986 Utah — charge, 55; it is invari States, ch. Finley Laws v. United ably preceded by the rate “interest at -, -, 2009, 104 U.S. 109 S.Ct. Code Ann. E.g., of....” (1989) (“[I]t L.Ed.2d will not be 59-12-110(7) (1987)); Congress, revising inferred and con- (1985)(repealed Code Ann. 59-16-6 laws, solidating change intended to 1987). effect, clearly their unless such intention is (quoting expressed.”) Anderson v. supports reading Chris Dick’s Pacific Co., 59-15-5.1(3) by relying clarify- Coast S.S. 225 U.S. 32 S.Ct. on (1912)). legisla- 626, ing passed the 1986 56 L.Ed. 1047 note amendment Among ture. Laws ch. 55. See 1986 Utah the 1986 amendment also struck dropped the things, the amendment same clause from section an al- the date the re- clause “from dealing identically most worded statute turn was last sentence due” prepayments. use tax with Utah Code 59-15-5.1(3). Dick’s ar- (1985) (repealed 1987). amendment, legisla- gues plain language conclude We that it ture an awareness that demonstrated the statute indicates that the clause “due an actually apportionable had created prepayment from the return is analogous annum to an interest not to create due” was intended an charge, a flat as it had rather than of the charge. language clause does elsewhere, and the final dropped created “per include such as or not terms annum” 59-15-5.1(3) clause order to make section of,” “interest at the rate which are found other flat tax stat- consistent with title 59 inter- in other sections of utes, such as section 59-1-401. Utah Instead, charges payment. est (Supp.1989). § was intended to indicate when the clause grounds. reject argument on two assessed, i.e., time penalty would be at the First, given no reason to consider it there is due, at return was and not language unambiguous of the statute. quarter, pay- of the full the end 134, Legion v. Post No. Allisen American of the tax for that ment sales 763 P.2d even if we were at 809. due.3 argument, much to consider this it seems attack fine & Dick’s second on the that the 1986 more reasonable to conclude argument imposed upon it is the that dropped the clause “from amendment inter- vague is so as to whether an statute to re- date the return is due” or be a flat is to any move doubt that deprivation it charged that constitutes amendatory imposed. The title be process due procedural violation relating legislation, “An Act to ... Const, amendment. U.S. fourteenth significant problems of reada- correction of XIV, claim, support ...,” sug- 1. In of this amend. bility, clarity, consistency § suggests that 1986 amendments sought to clear it gests that acknowledgment language in section 59-15- amount up the awkward point Compare point, § Utah Code Ann. included the decimal (1985) (current awarding 100 with Utah Code Ann. to avoid benefits the formula 59-12-110(7) (1987)) Here, (imposing ad- the existence times the intended amount. payable the statute ditional that become is far from clear and omission thirty after notice and demand indication of the no commission). interpretation alleged remedy omis- the tax included Supreme that was more clause in indicates it As the United States sion. stated 424, Monia, surplusage; it was included to have v. U.S. than rather Court in United States 430, 317 412, 409, (1943): meaning. the dis- "It is This would contradict 87 L.Ed. 376 some 63 S.Ct. Congress interpretation legislation our sent's conclusion that add the not us to any generally leaves clause devoid of pretermitted." Am.Jur.2d Stat- See 73 (1973). surplusage. therefore utes § 203 516 College

statute was so it had to be Bldg. Weber v. Utah State comprehensible. 538, 542, 687, amended make 93 74 P.2d (1937); 690 Price v. Industrial Comm’n of duty It is the of this court to Utah, 152, 154, 592, 91 Utah 63 P.2d 593 construe statute to avoid constitutional interpretation, In the possible. infirmities E.g., whenever Blue strike, take, any courts or read State, Cross and Blue Shield v. 779 subtract, delete, thing out of a statute or (Utah 1989); City Corp. Provo v. anything omit therefrom. 73 Am.Jur.2d 1989); Willden, (Utah 768 P.2d (1974); Statutes State ex rel. Faw Lindquist, State v. 674 P.2d 1236-37 County cett v. Board Alba Comm’rs (Utah 1983). A un statute will be found Wyo. ny County, 73 273 P.2d constitutionally vague only when it is not only exception latter sufficiently explicit and to inform the clear rule is when the words of a statute are so ordinary intelligence reader of common meaningless or inconsistent with the inten proscribed. E.g., what conduct is v. State plainly tion of the otherwise (Utah 1987); Frampton, 737 P.2d expressed they may in the statute that Hoffman, 733 P.2d State omitted, rejected surplusage elimi Theobald, 645 P.2d nated, disregarded. 73 Am.Jur.2d Stat Pilcher, State v. show, utes As I will later gravamen of Chris & that is not the case here. The court will Dick’s constitutional claim addresses the particular provision not construe a of a allegedly uncertain nature of the fine im modify statute so as to neutralize or posed under what provisions if proscribed. conduct is The statute is ex particular provision at all is tenable. Miles plicit pro and clear as to the conduct Wells, 55, 62, 22 v. 61 P. 536 untimely filing prepay scribed—the (1900). Courts not undertake a correc will this, reject ment return. we must Given legislative of mistakes statutes not Chris & Dick’s due claim.4 withstanding the fact that the court The tax commission’s order is affirmed. convinced extraneous circumstances legislature intended to enact some HALL, C.J., DURHAM, J., concur. thing very different from that which it did HOWE, Associate Chief Justice: enact. American Electric Power Serv. (dissenting). State, (Utah 1980) Corp. v. 619 P.2d 314 (title of act indicated intended to I dissent. There are several fundamen- amend different section of the code than statutory tal related rules of actually body the section amended in the of which, 59-15-5.1(3), applied to section act); Fawcett, Wyo. the State ex rel. 73 support plaintiff taxpayer’s interpretation 197; Farmers-Kissinger 273 P.2d at penalty imposed the and dictate reversal of City Market House v. Reading, Co. 310 by the tax commission. of 493, 498, Pa. A. 400 begin the rule that of with the terms ap- When these rules of construction are presumed a statute are to have been used plied 59-15-5.1(3), to section I cannot dis- advisedly by legislature. the Board of regard, majority, as does the the italicized Educ. Granite School Dist. Salt Lake eight last of the last sentence of that words (Utah 1983). County, 659 P.2d subparagraph: Therefore, given effect should be to each word, clause, phrase, penalties and sentence In 59-15-5, reasonably possible. payment provided ex rel. in section where Chez Therefore, & Dick’s bases its constitutional claim eral we do 4. constitutions briefed. I, on fourteenth amendment of the federal not consider the issue under article section 7 past I, constitution. We have noted in the of the Utah Constitution. Utah Const. art. generally engage court will not in state 7; see, e.g., Lafferty, analysis argument for constitutional unless an 1247 n. 5 analysis different under both the state and fed penalty computed as 72 Am. be a interest. See there shall 10% Local total amount of Jur.2d State and Taxation § charged. return is separately Interest due. points The in sub- majority also out that disregard justifies its majority “per do not section the words annum” eight title last words because these figure appear following percent. 59-15-5.1(3) and enacting the act However, That true. this court held itself, the word throughout v. Industrial Morrison-Merrill Co. majority used. The “penalty” repeatedly Utah, Commission of eight apparently believes that last an omis- where imposition with the are inconsistent words obvious, sion in a statute given must be therefore supply proper would to avoid an word That is not true. The no effect whatever. case, absurd result. In that this court was fact that majority overlooks the construing a formula benefits contained nonpayment taxes sometimes compensation in a statute. workmen’s imposition of interest take the form the Taking literally, injured the formula delinquent unpaid. amounts charges on weekly worker have been entitled to would Local 72 Am.Jur.2d State and Taxation $1,385. compensation in the amount of exactly what That is figure that a in the formu- court noted prescribed has here. But the obviously missing point, la was decimal changes prescribed penalty to majority which, inserted, weekly if would make the eight penalty by giving a flat By the same benefit a reasonable amount. no or effect. words sup- reasoning in the instant we can strength majority finds for its also “per figure 10 to ply following annum” penalties pre- position fact result follow avoid the absurd which would our in other sections of taxation daily, weekly, monthly if a rate of 10 reasons statutes to be used. were also in subsection must rule Another crucial of construction my opinion, penalty. flat each be a ignored majority is has been in our provision statutes taxing are to be construed statutes wording. stand on own Admitted- strictly taxpayer in favor of (3) differently worded ly, subparagraph Prods., Asphalt Inc. doubtful. Parson many provisions. How- Comm’n, Utah State Tax ever, unique. it is not Section Intermountain Pacific delinquent tax use imposing 8 Utah Express v. State Co. identically to sub- prepayments, worded (1958). Stat- 2d which is before us. Thus prescribing penalties are not be utes statutes, separate imposing one two have Am. implication. 72 extended mere delinquent prepayment of sales penalty for Local Jur.2d Taxation § imposing the other tax and penalties will Statutes (which prepayment of use tax delinquent anything be- not be construed include other), complement each which taxes two letter, though may be yond even their identically similarity worded. are spirit. within their Am.Jur.2d employment of persuasive Forfei- In the Penalties tures and not a eight words subsection opinion giving majority instant legislative oversight or error. To one-time credit, subject to two full subsection contrary, indicates that the their use I have demon- interpretations. different pre- separate sections two plausible interpre- another strated there is computed interpretation made the ma- tation. The points out that the majority interest. jority produces of almost “interest” is not used subsection word my produces. times that which not. The did Of course majority a The would it to interest but to be intend STEWART, J., taxpayer’s 38-day delinquen- concurs in the cy, interpretation dissenting HOWE, opinion whereas the which I Associate Chief Justice. produces penalty would make of $966.92.

I believe that where the members of this

court are divided on the

statute, taxpayer is entitled to ben-

efit of the doubt under the strict construc- subjected

tion rule and

extremely heavy penalty legisla- where the language.

ture has left doubt

Case Details

Case Name: Chris & Dick's Lumber & Hardware v. Tax Commission

Court Name: Utah Supreme Court

Date Published: Apr 24, 1990

Citation: 791 P.2d 511

Docket Number: 880188

Court Abbreviation: Utah