DAIRYLAND HARVESTORE, INC., Petitioner-Appellant, v. Wisconsin DEPARTMENT OF REVENUE, Respondent. BADGERLAND HARVESTORE SYSTEMS, INC., f/k/a Badgerland Harvestore Products, Petitioner-Appellant, v. Wisconsin DEPARTMENT OF REVENUE, Respondent.
No. 88-1748
Court of Appeals of Wisconsin
July 17, 1989
447 N.W.2d 56
††Petition to cross-review denied. †Petition to review denied.
For the respondent, there were briefs by Donald J. Hanaway, attorney general, and Warren D. Weinstein, assistant attorney general.
Before Gartzke, P.J., Dykman and Sundby, JJ.
GARTZKE, P.J. Dairyland Harvestore, Inc., and Badgerland Harvestore Systems, Inc., appeal from an order affirming the Wisconsin Tax Appeals Commission‘s decision that they are not “persons” under
We accept the commission‘s construction of
1. BACKGROUND
Dairyland and Badgerland are Wisconsin corporations. They received notices of additional sales and use tax assessment from the department, Dairyland for the tax years 1976 through 1981, and Badgerland for 1979 through 1981. Appellants filed petitions for redetermination and claims of offset. The department denied Dairyland‘s petition in its entirety and issued a modified notice of additional sales and use tax assessment. The department granted Badgerland‘s petition in part and issued a modified notice of additional sales and use tax assessment. The department denied the claimed offsets against the deficiencies.
The claimed offsets arose out of refunds on purchases by appellants from A.O. Smith Harvestore Products, Inc. Appellants paid Wisconsin sales taxes to A.O. Smith at the statutory rate for each purchase. A.O. Smith in turn paid the taxes to the department, but later made refunds to appellants which reduced the price of the products they had purchased. A.O. Smith did not, however, refund to appellants the sales taxes on the refunded amounts. The refunds to Dairyland were for the fiscal years ending January 31, 1977 through 1981,
The commission concluded that each appellant lacked standing under
At any time within 4 years after the due date of the annual information return, a person may . . . file with the department a claim for refund of taxes paid by such person. Such claim for refund shall be regarded as a request for determination. The determination thus requested shall be made by the department within one year after the claim for refund is received by it. [Emphasis added.]
Effective April 30, 1980, this section was amended1 to provide in relevant part:
At any time within 4 years after the due date of the taxpayer‘s Wisconsin income or franchise tax return or, if exempt, within 4 years of the 15th day of the 4th month of the year following the close of the calendar or fiscal year, a person may . . . file with the department a claim for refund of taxes paid. The claim for refund shall be regarded as a request for
determination. The determination thus requested shall be made by the department within one year after the claim for refund is received by it. [Emphasis added.]
The interpretation of the statute is a question of law. Neither the trial court nor this court is bound by the commission‘s interpretation. NCR Corp. v. Revenue Dept., 128 Wis. 2d 442, 447, 384 N.W.2d 355, 358 (Ct. App. 1986). If the statute is unambiguous, we apply its terms without deference to the commission‘s view. Milwaukee v. Lindner, 98 Wis. 2d 624, 634, 297 N.W.2d 828, 833 (1980). If the statute is ambiguous, we will accept the commission‘s interpretation if it has a rational basis, unless it conflicts with the statute‘s legislative history, judicial precedent, or constitutional prohibitions. Pabst v. Department of Taxation, 19 Wis. 2d 313, 323-24, 120 N.W.2d 77, 82 (1963). We will, moreover, assume that the legislature is familiar with and has approved a longstanding interpretation of a statute by the agency charged with its administration. Cf. Town of Vernon v. Waukesha County, 99 Wis. 2d 472, 479-80, 299 N.W.2d 593, 598 (Ct. App. 1980), affd, 102 Wis. 2d 686, 307 N.W.2d 227 (1981) (legislature presumed to acquiesce in longstanding administrative construction if it reenacts or amends statute without substantive change).
2. PRE-APRIL 30, 1980 SALES TAXES
All parties appear to assume that if appellants had standing to file claims with the department for sales taxes they paid to A.O. Smith, then they are entitled to offset those sales taxes against additional sales taxes
Appellants contend that under the plain meaning of
At all relevant times before April 30, 1980,
In its pre-amendment form,
The word “person” is used twice. . . ; and within the scope and meaning of that word as used in said section, the word “person” in both instances refers to one and the same person.
Section 77.59(4) clearly means that at any time within four years of the due date of a sales tax return of a person required to file a sales tax return, that person may, unless a determination by the department by office or field audit has been made, file with the department a claim for refund of sales taxes paid by such person.2
We reject appellants’ argument that under the doctrine of equitable recoupment they are entitled to a refund and therefore an offset even if they lack standing to file a claim. Under that doctrine, the state may reduce a timely claim for a tax refund by the amount of a deficiency assessment barred by the statute of limitations. American Motors Corp. v. Dept. of Revenue, 64 Wis. 2d 337, 351, 219 N.W.2d 300, 307 (1974). Similarly, if a taxing authority makes a timely additional assessment against a taxpayer, the taxpayer may credit a refund
[1982-1986 Transfer Binder] Wis. Tax Rep. (CCH) para. 202-529 (1985); Edward Kraemer & Sons, Inc. v. Dept. of Revenue [1982-1986 Transfer Binder] Wis. Tax Rep. (CCH) para. 202-386 (1984); Jackson County Iron Co. v. Dept. of Revenue, 9 WTAC 283, 284-85 (1972). Netex and Kraemer expressly relied on Rent-A-Truck, 8 WTAC 233 (1971), and Jackson County repeated the pertinent language of Rent-A-Truck, without citing it.
Equitable recoupment “permit[s] a transaction which is made the subject of suit by a plaintiff to be examined in all its aspects, and judgment to be rendered that does justice in view of the one transaction as a whole.” Rothensies v. Electric Storage Battery Co., 329 U.S. 296, 299 (1946). For that reason, courts allow claims for equitable recoupment that would otherwise be barred by the statute of limitations as long as the main action is timely. Bull v. United States, 295 U.S. 247, 262 (1935); American Motors Corp., 64 Wis. 2d at 351, 219 N.W.2d at 307.
Appellants cite no case, however, allowing a claim for equitable recoupment when it is barred not only by the statute of limitations, but by a lack of standing to file even a timely claim. Extension of the doctrine to such a situation would, in effect, fashion a new equitable remedy for appellants. We have already explained our refusal to do so.
3. POST-APRIL 30, 1980 SALES TAXES
We conclude that the 1980 amendment to
Except for the legislative history of the amended statute, the rule of deference would come into play, and we would adopt the commission‘s interpretation of
The new statute permits a “person” to “file a claim for refund of taxes paid,” having deleted the qualifying words “by such person.” Consequently, the basis under the old statute for concluding that the “person” entitled to file is the same person who paid the taxes no longer exists. Because the new statute refers to the Wisconsin income tax or franchise tax return, the basis under the old statute for concluding that the “person” entitled to file is the one who filed a sales tax return no longer exists.
We can only conclude that the legislature intended by its amendment to
We have already referred to the apparent assumption of all parties that if appellants could file claims for sales taxes they paid to A.O. Smith, then they may offset those taxes against additional taxes owing for the same taxable years in question. Whether appellants’ standing under
We recognize that
recover the taxes, citing Brodbine v. Torrence, 545 S.W.2d 743 (Tenn. 1977), Harrison Sheet Steel Co. v. Rosenquist, 151 N.E.2d 462 (Ill. App. 1958), and Van Emmerik v. State, 298 N.W.2d 804 (S.D. 1980). However, the matter before us turns on the legislative history of a Wisconsin statute.
By the Court.---Order reversed in part, affirmed in part, and cause remanded with directions to remand the matter to the commission for further proceedings consistent with this opinion.
SUNDBY, J. (concurring in part, dissenting in part). The question is: Who “paid” the sales tax within the meaning of
When A.O. Smith collected sales taxes from Dairyland and Badgerland and remitted the taxes to the department, it was merely acting as the agent for the state. In reviewing
The construction given to
Reduced to basics, the state holds money of Dairyland and Badgerland to which it has no right. It‘s “[r]etention of the money [is] against morality and conscience,” Id. at 260. This case is comparable in this respect to Appel v. Halverson, 50 Wis. 2d 230, 184 N.W.2d 99 (1971), where the commissioner of revenue raised a procedural defense to
[W]hen the question of refund first arose, the attorney for the revenue department recommended that the $300 be paid by the department to the lady who is the respondent here. If that advice had then been taken, before court proceedings, litigation expensive to the lady and to the taxpayers of the state could have been avoided. If the recommendation to make the refund is now followed, weight should be given to the equities of the situation, and, with the imperfections of the legal procedures admitted, that is a result devoutly to be wished.
Id. at 236, 184 N.W.2d at 103.
Similarly, regardless of any perceived “imperfections” in the refund procedures, returning to Dairyland and Badgerland money which is rightfully theirs is a result devoutly to be wished.