¶ 1. April 11, 2008. Taxpayer Williston Inn Group appeals from a determination of the Commissioner of Taxes assessing meals-and-rooms taxes based on rents paid for the first thirty days of stays by long-term guests at its extended-stay hotel. Taxpayer argues that the Commissioner based the assessment on an erroneous interpretation of the governing regulation. We disagree, and therefore affirm.
¶3. The hotel offers accommodations with separate living, working and sleeping areas as well as fully equipped kitchens. In addition, each suite is equipped with a sofa bed, free high-speed internet access, separate telephone and data lines, a television, personalized voice mail, and other predictable items. The hotel’s amenities include an exercise room, indoor pool, vending machines, twenty-four-hour staffing, housekeeping services, on-site fax, copy and printing services and a coin-operated laundry. Guests are also welcome to use a computer terminal and printer located in the hotel lobby, as well as safe deposit boxes.
¶ 4. Taxpayer’s rates for suites are quoted on a per-night basis. The pricing varies with the length of stay and is tiered as follows: one rate for stays of one to four days, a lower rate for stays of five to eleven days, an even lower rate for stays of twelve to twenty-nine days, and, with a few exceptions, the lowest rate for stays of thirty days or more. In some cases, the hotel offers negotiated, discounted rates to corporate and government entities based upon forecasted volume, and these may be lower than the tiered rates. Taxpayer often makes direct billing arrangements with companies and governmental agencies in the case of planned stays in excess of thirty days.
¶ 5. Taxpayer does not charge guests the meals-and-rooms tax on the first thirty days of occupancy for stays exceeding thirty days. When an occupant who has checked in for a stay'of thirty days or more fails to stay for at least thirty days of that previously agreed stay, taxpayer’s practice is to increase the room rate for each night of that stay, and to impose the meals-and-rooms tax on the total, increased rates paid for the duration of the stay.
¶ 6. All of the guests who occupied suites for any number of nights at the hotel during the period of time relevant to this suit did so pursuant to documentation consisting of: (1) a reservation printout providing terms including the date of arrival and the departure date, the type of accommodation, a nightly rate quote, a term that advised that the rate is based upon continuous length of stay and that early departure may result in rate change, and other terms relating to the penalties for cancellation; (2) a registration card or slip attached to the reservation printout and signed by the guest, indicating the type of suite, the suite number, arrival and departure dates, the rate, and that the rate is based upon continuous length of stay and that early departure may result in an upward rate adjustment; and (3) for those who made reservations online, an email confirmation. Other than these three documents, there were no written agreements between the hotel and its guests.
¶ 7. Taxpayer treats the documentation as imposing an obligation on the hotel to provide the indicated accommodations to the guest for the period noted in the reservation and at check-in. It also treats the
¶ 8. Any person with the ability to pay the room rate may arrive at the hotel without a reservation and rent a room for any term, subject only to availability. Any such guest would be required to take a suite under the same terms as one who has made an advance reservation. At the time a reservation is made, taxpayer does not guarantee any guest any particular suite. Upon cheek-in and the signing of the registration card with the attached reservation printout, an occupant is assigned to a specific suite. The hotel does not charge any of its guests a security deposit. On occasion, guests who fail to pay for their rooms have been locked out of their rooms by the management or employees of the hotel; the hotel represents that it has taken such action solely for the purpose of inducing discussions concerning payment arrangements.
¶ 9. The statutory and regulatory framework is as follows. All rentals of hotel rooms in Vermont are presumptively subject to the meals-and-rooms tax. 32 V.S.A. § 9241(a). The tax is not due, however, when the occupant is a “permanent resident” of the hotel. Id. § 9202(6). A “permanent resident” is defined by statute as “any occupant who has occupied any room or rooms in a ‘hotel’ for at least thirty consecutive days.” Id. § 9202(7). Tax Department Regulation 1.9202(7)-1 further clarifies the term “permanent resident.” It provides in pertinent part as follows:
The term “Permanent Resident” includes the following:
(a) Occupants for more than thirty days. A person who occupies any room in a Hotel for more than thirty consecutive days becomes a Permanent Resident effective as of the thirty-first day and will continue to be considered a Permanent Resident thereafter as long as Occupancy remains continuous and uninterrupted.... Since qualification as a Permanent Resident under this subsection is not effective until the person has occupied a room or rooms in a Hotel for thirty consecutive days, Rent from the first thirty days of Occupancy is subject to rooms and meals tax.
(b) Occupants under leases covering more than thirty days. A person who has a right to occupy a room for more than thirty days pursuant to a preexisting lease is considered a Permanent Resident for the entire period of Occupancy pursuant to such lease, and no meals and rooms tax is payable with respect to any rent paid or received under such lease.
Tax Department Regulation 1.9202(7)-1,1 Code of Vermont Rules 10 060 023-2.
¶ 10. Following an audit, the Department of Taxes assessed taxpayer for meals-and-rooms tax on the unreported first thirty days of long-term stays at its hotel for a nearly three-year period. In addition to the $74,172.44 tax due, the Department assessed penalties and interest; the interest continues to accrue. Taxpayer timely appealed the tax assessments to the Commissioner. Taxpayer asserted that the guests upon whose first thirty days of long-term stays at the hotel the Department sought to impose the meals-and-rooms tax were “permanent residents” under Regulation 1.9202(7)-1(b) and, accordingly, that their occupancies were not subject to the meals-and-rooms tax. Specifically,
¶ 11. This Court reviews the Commissioner’s decision directly, independent of the conclusion on the intermediate, on-the-record appeal of the superior court. See Devers-Scott v. Office of Prof'l Regulation,
¶ 12. We have long extended this principle of deference to agency interpretations of statutes which the Legislature has entrusted to their administration. See, e.g., Town of Killington v. State,
The Legislature has entrusted the administration of the workers’ compensation laws to the Commissioner [of the Department of Labor and Industry], and the Commissioner necessarily has developed expertise in this administration. As a result, we give deference to the Commissioner’s interpretation ... of the workers’ compensation laws.
¶ 15. After noting that the Department has not adopted a definition of the word “lease,” the Commissioner reasoned that leases are generally defined as “‘[a]ny agreement which gives rise to relationship of landlord and tenant (real property) or lessor and lessee (real or personal property).’ ” (quoting Black’s Law Dictionary 889 (6th ed. 1990)). The Commissioner went on to note that a lease must contain four essential terms: “(1) the names of the parties; (2) a description of the leased property; (3) a statement of the lease’s duration or term, and (4) the amount of the rent.” The Commissioner concluded that taxpayer had failed to make a showing that its registration cards created landlord-tenant relationships between the hotel and its guests so as to require a departure from the general rule that hotel guests are considered lodgers subject to licenses rather than tenants subject to leases. See M. Friedman & P. Randolph, Jr., Friedman on Leases § 37:3 (2d ed. 2005) (reciting general rule). Having come to this conclusion, the Commissioner did not go on to analyze whether taxpayer’s arrangements with its guests included the four essential terms of a lease.
¶ 16. Taxpayer has not shown us any compelling indications that the Commissioner erred in interpreting Regulation 1.9202(7)-1. The Commissioner’s conclusion — that in order to be a “lease” within the meaning of 1.9202(7)-1, an arrangement must create a landlord-tenant relationship —• is reasonable and does not undermine the regulatory purpose. Taxpayer does not argue that the hotel’s arrangements with its guests create landlord-tenant relationships, but rather argues only that in light of the plain meaning of “lease,” and the Commissioner’s own statement of the regulatory purpose, the Commissioner was wrong to require such a relationship in order for taxpayer’s arrangements with its guests to be considered “leases” under the regulation.
¶ 17. As taxpayer points out, the Black’s Law Dictionary definition of “lease” has broadened from edition to edition. See Black’s Law Dictionary 1035 (4th ed. 1951) (“Any agreement which gives rise to relationship of landlord and tenant.”); Black’s Law Dictionary 800 (5th ed. 1979) (“Any agreement which gives
¶ 18. Nor are we persuaded by taxpayer’s arguments that a broader definition of “lease” would be consistent with other tax statutes. Taxpayer points out that the definition of “[l]ease or rental” of personal property includes “any transfer of possession or control of tangible personal property for a fixed or indeterminate term for consideration.” 32 V.S.A. § 9701(33). That the parties need not have a landlord-tenant relationship for the rental of personal property to constitute a ‘lease” is unremarkable, as the “landlord-tenant” label has traditionally applied only to leases of real property. Taxpayer’s analogy to the breadth of the statutory definition of “rent” is equally unpersuasive. Taxpayer argues that because “rent” is defined broadly by statute as “consideration received for occupancy,” id. § 9202(8), and without reference to any landlord-tenant relationship, “lease” should be broadly construed to include “any agreement that confers the right of occupancy.” We fail to see the logic in taxpayer’s argument. This is a case about when rents for the first thirty days of occupancies, which are normally taxed, are instead exempt because they are paid pursuant to a “lease.” It is therefore of no moment that the definition of “lease,” which applies only to a subset of situations in which rent is paid, is narrower than the definition of “rent.”
¶ 19. Furthermore, the Commissioner’s construction of “lease” is entirely consistent with the regulation’s purpose. The Commissioner opined that Regulation 1.9202(7)-l(b) furthered the purpose of “aeknowledg[ing] that some hotel occupancies are so akin to residential ones that they may escape taxation.” The Commissioner’s articulation of regulatory purpose is reasonable. We agree with the Commissioner that the consequence of taxpayer’s proposed reading of “lease” would be so broad as to convert any hotel registration card into a lease. Such a construction would read subsection (a), which establishes the presumptive tax-ability of the first thirty days of hotel stays, out of the regulation.
¶ 21. Taxpayer is wrong to suggest that under the Commissioner’s interpretation long-term residents of its hotel may never be treated similarly to tenants in other residential rentals. If taxpayer wishes to rent its suites as residences, it is free to do so. It could, consistent with the regulation, enter into genuine leases with its customers and eliminate any tax-collection requirement beginning the first night of occupancy. The Commissioner’s decision merely establishes that under the regulation taxpayer may not have leases without tenants. That is not to say that taxpayer is precluded from adopting arrangements with its guests that create landlord-tenant relationships. The Commissioner simply found that taxpayer failed to show that its arrangements did so. Taxpayer does not challenge this finding, and we therefore leave it undisturbed.
¶ 22. Taxpayer has failed to bring to our attention any compelling indications that the Commissioner erred in interpreting Regulation 1.9202(7)-l(b). We therefore affirm.
Affirmed.
Notes
Taxpayer does not argue that the tax regulation at issue is contrary to 32 V.S.A. §9202(7). Rather, taxpayer argues only that the Commissioner misinterpreted the regulation. In a single paragraph toward the end of taxpayer’s appellate brief, taxpayer does make the conclusory statement that the Commissioner’s reading of the regulation is “without regard to the legislative purpose,” and “contrary to the legislative intent.” However, taxpayer does not attempt to establish what the legislative intent was. Moreover, the above language is sandwiched between arguments regarding regulatory intent, and under the argument heading “The Commissioner’s Interpretation Undermines [t]he Purpose of the Regulation ...” Finally, at oral argument, taxpayer conceded that the regulation was valid and confirmed that it was not challenging the validity of the regulation. As such, we are at a loss to determine whether taxpayer is making a statutory argument at all, and, if so, what that argument is. We therefore reserve for another day the question of whether Regulation 1.9202(7)-1 is consistent with § 9202(7), and limit our review to the question of whether the Commissioner’s interpretation of the regulation was reasonable. See Johnson v. Johnson,
We note that one of the cases taxpayer cites in support of its standard-of-review argument is in some tension with our reasoning. See Devers-Scott,
Because the Commissioner did not perform this analysis, and because we hold that the Commissioner’s construction of “lease” to require the formation of a landlord-tenant relationship was reasonable and consistent with the regulatory purpose, we do not address taxpayer’s arguments that its arrangements with its guests included the four essential terms of a lease.