*1 plaintiff’s tax for 1969 placed value was be recom- the same when puted to show on the basis of the later. He failed corrected assess- building years two value, we said: ment. change in legislature purpose of “The obvious Reversed. * * * in an change permit] [was
assessment, any year year ‘in after the made’, had been the assessment change limited the legislature
but has ‘where it finds the same
a situation
changed in value’.” deny does not the de-
While defendant building, argues it no plaintiff’s struction of IOWA MOVERS & WAREHOUSEMEN’S for 1969because the casu- possible relief is ASSOCIATION, Appellant, January year. after 1 of that alty occurred v. hold, We not so read the statute. We do BRIGGS, Donald Director of G. Iowa rather, a revaluation for permits the statute Revenue, Department of and Iowa occurring during in value a decrease Revenue, Appellees. Department of of Review still has author- the Board period words, protest act on a No. 2-57422. ity to —in the Board is still session. while Iowa. Supreme Court of case, it un manifestly present In the Jan. real estate compel plaintiff pay fair to 12, 1976. Rehearing Denied March which was not in exist property taxes year ten months of the for almost ence County, Bateson v. Hardin Cf.
question. 720-721, 202 N.W. 750-
199 Iowa (1925). destroyed sepa- property
Since $43,320, assessor at by valued
rately that the assessment for
agree with have been reduced year 1969 should places the assessment This
that amount. $27,290 $70,610. rather than year at
for that 445.62, have not overlooked §
We Code, with the discretion of which deals to remit all or Supervisors Board of destroyed property which of taxes on
part That statute covered insurance.
is not power of the discretionary with the
deals rightfully taxes due to remit
supervisors application has no here collectible. It change in its assess plaintiff seeks a
where right. as a matter of
ment and fix the judgment
We reverse year for the real estate
value $27,290. Defendant Board is direct-
1969at accordingly its records
ed to correct Supervisors so same to the Board
certify
761
the fifth issue. Plaintiff thus narrowed its appeal to the (2), issues have numbered (3), (5). Hence we proceed to the issues estoppel, wrapping, packing, pack- Holz, Jr., A. and Robert F. Donald Wine aging, standing. and of *3 Schoenthal, Thoma, Davis, Hockenberg of I. Estoppel. Iowa has had a sales tax Meade, Moines, Wine, & Des & and Buck a complementary and use tax a for number appellant. for years. of In 1967 General Assembly Gen., Turner, Atty. George Richard W. C. added as complementary to the sales tax a Gen., Murray, Sp. Atty. Harry Asst. and M. on gross receipts tax from enumerated Gen., Atty. appellees. Griger, Asst. for services, effective October year. 1 of that 20, 62 G.A. ch. 25. Code §§ See 422.42, (part 422.43 of the division on the §§ tax). sales The act defined broadly services UHLENHOPP, Justice. performed as acts within this state with appeal prob- In this de novo consider respect to enumerated activities. Id. with the lems in connection Iowa services 19(1) (4). and The enumeration included foreign income on tax and the Iowa tax “storage warehouse and storage locker” and 422.43, 422.33, Code 1975. corporations, §§ services, stating “warehouse” without that Iowa Plaintiff is an association of ware- storage goods exempt. of interstate present brought housemen. Plaintiff September On the Iowa State injunctive declaratory suit in and equity for promulgated Tax Commission services tax against Department relief Iowa defendants regulations. Regarding and storage ware- Director, its of Revenue and whom we will stated, regulations houses the any without In collectively Department. call district exception for interstate activities: court the suit involved several main issues: 5.46(422) Storage warehouse and stor- (1) application the constitutionality of the age providing locker. Persons facilities of the Iowa services to interstate ware- for storing type personal of property activities, (2) housing estoppel of are rendering, furnishing, performing or collect Department the services tax on a gross service the receipts from which period past, (3) such a in the activities for subject are tax. “Storage warehouses applicability wrapping, tax to certain include, and storage lockers” shall but are packing, packaging and activities ware- to, not limited facility provided for housemen, (4) constitutionality of the the purpose storing household or build- corporations Iowa on foreign income tax ing foods, clothes, furnishings, furs, and which exempt storing would be but automobiles, luggage, airplanes, or any Iowa, (5) standing goods plain- tangible personal (See property. tiff to raise that fourth issue. The trial Infra) “Warehouses” Department court on all found for is- 5.53(422) Warehouses. Persons en- fourth, it did except sues which gaged in the business warehousing appealed. reach. Plaintiff goods rendering, are others furnish- appeal, plaintiff On this abandoned its ing, performing gross or a service the issue, of the probably first because 1947 receipts which subject are to tax. Supreme United decision of the States A building is a or place “warehouse” Warehouses, Court in Inc. v. Independent adapted reception to the Scheele, 67 91 331 S.Ct. L.Ed. U.S. goods merchandise, and,- in a more (tax warehousing goods upheld un- sense, limited is a building place or here). der circumstances such as those deposits which a warehouseman issue, prob- its fourth Plaintiff also omitted of others in the course of his business. ably ruling the trial because of court’s I.D.R. 915-916. 344(f)(7), them. Rule also Rules of Civil regulations Pro-
The Tax Commission’s cedure. of the services tax. covered administration gov- that the rules stated regulations Operators of Iowa warehouses hoped that sales and erning the administration is, goods, in Iowa interstate administration of the to the apply use taxes into Iowa had come from other I.D.R. Those rules services tax. or states which were destined to leave desiring a taxpayer long required Iowa, exempted under might be the Com- information make written opinion an or They regard- merce Clause. became active pertinent all facts and in- request stating forming a ing question, committee documents, abstracts of copies clude into retaining look it and an attorney ruling desiring a formal that a taxpayer ruling obtain Tax Commission on it. before Tax Commission hearing *4 Primmer, manager Ernest of a warehouse application therefor. Rules make a written Iowa, Davenport, in testified that on Octo- 1, 5, 839, 841. 1971 I.D.R. 3, Burrows, 1967, ber telephoned he Earl enumerated the service of act also then chairman the Tax of Commission stating exception an advertising, without (predecessor of Department of the Iowa 28, September interstate On
for activities. Revenue), some to obtain advice on the publish- and 1967, newspaper broadcasters matter. offered as of Plaintiff evidence them, ers, with sued the and others allied this call a on telephone showing bill that claiming inter that the Tax alia Commission long-distance a October call was in Clause 8 of act violated the Commerce made Primmer’s warehouse to the They I, Constitution. Article United States number of the Tax Commission in Des that showed, example, newspaper pub- a Moines. Plaintiff also offered some hand- Iowa, Davenport, circulated in lished in written allegedly notes Primmer made dur- Illinois, the signal Iowa and that both and ing among *5 tax took Forst and other Little man named appear. not Moines ware- a tour of a Des on officials Dickinson tes- Burns and warehouseman attempt to increase under- house in an February they tified that about met by Forst testified standing of the business. with Forst to discuss the services tax on know, thing was one I “There deposition, further testified goods. They interstate left them we did not make that when we they they told Forst that since October 1967 gross to them their re- statement that any goods collected the services tax on had performance of those serv- ceipts from originating ultimately and delivered in personal property moving tangible on ices they Iowa, they asked him whether exempt.” were In interstate commerce session of the Gen- seek in the then should states that “the ware- its brief legislative exemption on Assembly a eral any specific not claim that do housemen They stated goods. interstate storage of given questions the taxation was advice on problem no that Forst told them at warehouse Mr. Forst tour]. [the legislative exemption. seek a and need not tour was informational.” warehouse however, in that 1969 session Interestingly, regarding peo- exists confusion Some did amend the defini- Assembly the General Earl present were on this tour. ple who per- to exclude services tion of services he went on a tour of testified that Burrows tangible personal property “de- formed on warehouses; thought this occurred he some . livered into commerce . ..” interstate appeared poor to have a 1967. But 247, amendment be- 63 G.A. ch. 2. This tour; he was unable to recollection 8, 1969. that May came effective Since warehouses were toured or which recall date, therefore, storage goods in Iowa of him, were with al- other officials what exempt been destined out of state has he did not think Forst though he indicated the tax. Forst Burrows testified that along. seemed to him Although Forst said there warehouse tours subsequent some went on meetings two between testified, to been attend. Forst he did not himself, he could not warehousemen and have been” on however, “may Burrows that meeting with Bums and recall a specifically Warehouseman February 1968 tour. indi- in 1969. He nonetheless Dickinson to have the clearest Burns seemed Frank he did not tell the ware- clearly that He said that cated of the tour. recollection other, 1968, housemen, meeting or at that February that place took tour goods charge interstate on On January the Department is- exempt. point At one in Forst’s tax sued a Tax Sales Use Bulletin which following took testimony, exchange included following: him and an for the attorney between place Listed below are seven items connected Harry Griger: M. Department, Mr. with performed services by warehouses And the other items Mr. Forst. [of explanation with an of each item and the I expressed petition], plaintiffs Department of position Revenue’s relat- them ware- explained or them ing to their taxability: on mov- performed goods services house Storage 1. goods on that are received out of the State of Iowa in ing into or either or intrastate interstate an exempt commerce interstate Iowa warehouse after of the sales tax but that application are delivered within the state— performed services warehouse local Taxable since October 1967. moving into interstate com- tax, subject I merce were sales 2. Storage that are received say I did not make that would have either intrastate interstate by an statement. Iowa warehouse and after storage are delivered into interstate com- Griger.
Mr. You did not make that merce —Taxable October 1967 to statement? 8, 1969; May exempt 8,May after No, Mr. Forst. I did not make that statement. words, Griger. you Mr. In other did brought Plaintiff this on April suit statement orally ever make that 26,1972. part In of the suit involved at representative? or his warehouseman point, plaintiff this asserts that notwith Mr. Forst. No. It’s statement standing the statute, services *6 been made It’s a orally. would not have Department is estopped collecting the that would have been tak- position formal services tax on interstate warehousing en, would made obviously and we have antedating January 28,1972, because of the quite that formal. Burrows, Bracewell, and Forst representa testified, don’t point At another Forst “I tions. The rule is that “the prove burden to just many recall how times met with [he estoppel establish on is the party as may have been warehousemen] —it serting it, with proof strict all ele It as many once. could been as twice. ments being demanded.” Paveglio v. Fire that we did not them quite give I’m certain Co., stone Tire & Rubber 636, 167 N.W.2d policy as to whether these were taxable (Iowa). 639 opinion or opinion, my our because Plaintiff first relies the alleged state- was.” that’s what it ments Earl Burrows and Harold Brace- Although Burns Dickinson both said well Ernest telephone Primmer Sheldahl, official, another tax Everett 3, 1967, conversation of October and on the meeting, stated spring at the 1969 Sheldahl representations on the interstate commerce that he deposition in a could not recall question may which have been made by meeting with the warehousemen other than Burrows on his warehouse tour with Forst 1968 tour. February and others in 1968. February 18, 1970, audit, August after an On against As to alleged Cedar Department assessed taxes Bracewell representa- Storage tions, Company, a Rapids Transfer & our examination the record per- included warehouser. assessment suades us Mr. Bracewell is a credible wit- upon storage goods into ness and came his testimony he was not Iowa from advising anyone other states. on the services tax is true.
765 case, Burrows, only, trial court found this similar tax which is collected As to that one tax commission- taxpayer evidence from customers or “There is others. Burrows, Jr., 422.49, felt that transactions er, Earl See Code 1975. out of were destined stored
[where
In a
an employer, relying
California case
sales
subject
to the Iowa
were not
state]
ruling
commission
it need not
evidence
finding
supported by
is
This
tax.”
withhold
employees,
tax from its
refunded
Prim-
did indicate to
probably
Burrows
to the employees
previously
amounts
with
per-
telephone
in the
conversation
mer
held. The
changed
commission later
understanding on the
indicated his
haps
ruling. The court held the state was es-
of such
tour that
warehouse
topped
employer
to collect from the
becomes,
then
is
question
exempt.
amount of the tax refunded to the employ
Depart-
to hold the
this a sufficient basis
estopped
collecting
ees but not
collecting the tax from
estopped from
ment
employer’s matching contribution to the tax
period prior
for the
Iowa warehousemen
fund. The
may
court said that “the state
28,
January
1972?
good
place
not in
conscience thus
on the
case, &
in a sales tax
S
This court stated
which the act
employer a burden
itself did
Comm’n,
Tax
v. Iowa State
Co.
Finance
M
that he should
La
intend
bear.”
Societe
505, 510(Iowa):
N.W.2d
Francaise De Bienfaisance Mutuelle v. Cali
estoppel is based on the idea
Equitable
Comm’n,
Employment
Cal.App.2d
fornia
represen-
who has made certain
that one
534, 552, 133
47,
P.2d
56. In a sales tax case
permit-
should not thereafter be
tations
stated,
taxpayer
a California court
“If the
change
position
prejudice
his
to the
ted
a mere
the state
agency
collection
one who has relied thereon.
It is re-
estopped, but not where the tax is imposed
injus-
sorted to when otherwise manifest
complaining taxpayer.”
Market
Maryland
tice would result.
v.
Sanborn
Board of
Ry.
Street
v. California State
Co.,
1319, 1327, 125
Casualty
255 Iowa
Equalization,
Cal.App.2d
citations;
758, 763, and
28 Am.
N.W.2d
20,
P.2d
also Crane Co. v. Arizona
See
Waiver,
27,
section
Estoppel
Jur.2d
Comm’n,
Tax
State
63 Ariz.
163 P.2d
28, page
section
629. It is not
page
656; Hoffman
City
Syracuse,
v.
2 N.Y.2d
state,
against
par-
invoked
generally
605;
161 N.Y.S.2d
141 N.E.2d
cf.
revenue is
ticularly when the collection of
v.
Reve
Schuster
Commissioner of Internal
Am.Jur.2d, Estoppel and
involved. 28
nue,
(9 Cir.).
the present facts. As early as October
Estoppel applies only when par attorney apparently told Burns orally ty it asserting actually upon relied the al charge goods that on interstate was leged representations. M exempt S & Finance Co. from the tax. testified Burns Comm’n, v. Iowa Tax supra, opinion State 162 he also received a written from the April N.W.2d at As to the Burrows-Prim attorney, opinion in 1968. The said mer conversation of October will that “there be no taxes the gross Department estopped would not be any receipts following: in of the Goods in inter- plaintiff’s commerce, event unless members relied on state . . . ‘in-transit’ in goods, goods what Burrows told Primmer the conver those originating within sation. lading the state that have bills of designat- right is, testi- designations.” rely Burns if ing out-of-state their reliance was —that copies opinion made of the he had reasonable. M Finance fied S & Co. v. Iowa members. He further plaintiff’s Comm’n, to all supra; sent State Tax Estop- C.J.S. meeting Forst at the 1969 he told pel testified 71a at 432. We do not believe that in collecting was membership per that “our significance, a matter of this reliance by the interpretation on the cent tax based service warehousemen on what Burrows told Prim- (Italics mailed out to them.” that we had telephone mer in the conversation would which the added.) only interpretation have been reasonable. Primmer himself mailed at that time shows had beeh record testified Burrows explicitly said that any attorney. own opinion was gave advice he “unofficial.” Prim- Also, Primmer testified that when Ernest stated, mer’s notes “No official Ruling Rapids he Cedar Transfer and Stor- heard Tax Commission.” Burrows one been assessed back taxes age Company had of three tax commissioners and could not respond- of interstate speak for the Commission itself. “ ed, happen like that anything ‘How could addition, In Enterprises Lee case, following guidelines have been when we directly involved the interstate com- ’ sources; that have come several tax, merce issue under the services was in case, right phone from a call my particular the courts. Burns knew this. The Lee Commission, and in the to the office Enterprises litigation told the warehouse- association, through through other cases men Department that the asserted taxabili- attorney an named Mr. Wasker apparently ty. We hold that reliance by warehouse- (Italics . . ..” [plaintiff’s attorney] telephone men on the conversation would added.) not have been reasonable. Furthermore, this is not a case in which a We arrive at the same conclusion with telephones mechanic the Tax Commis- lone respect to alleged representations Burrows’ inquire whether the services tax sion to during the warehouse tour. The evidence work. That a small applies operator to his provides here even estoppel. less basis for manner is might seek advice such not The record does not contain a shred of improbable. Here however we have sub- evidence that the warehousemen relied on joined together businessmen in a stantial anything Burrows said on the tour. On the They association. form a committee contrary, plaintiff’s executive secretary They legal obtain information. retain asked, Burns was “Were there determi- get ruling applicability counsel nations question] the interstate [about pre- The Tax rules of the tax. Commission you recall made on that particular day procedure get ruling. scribe a February 1968?” He “There responded, applica- the warehousemen question have — was nothing specific. asking We weren’t of the tax to interstate activities —is tion for an right answer at that moment. We involving one thousands of dollars of tax were trying explain our situation and the state. Their counsel in- throughout give them an could answer idea so that of interstate forms them that give us an answer.” We find no testi- to be- is not taxable. We find it difficult mony that Burns or other warehouse- importance lieve that on a matter of such men even remembered what Burrows said warehousemen relied on the offhand these it. day, let alone relied on reaction of a commissioner over the tele- phone opin- rather than on their counsel’s again Here reliance would have been ion. reasonable. Our comments on the Bur- *9 apply rows-Primmer conversation say
Even if we could that the warehouse- here. The Lee Enterprises con- litigation men relied on the Burrows-Primmer told the versation, Department’s position es- warehousemen the Department would be topped only regarding if the warehousemen had a interstate commerce. In addi-
tion, February only Burrows was find Forst did not represent to the ware- Forst, was to who director of the deputy storage housemen that of interstate warehousemen Department. The ad- new goods exempt. was Forst did not tell them the tour that mit Even we arguendo if assumed that goods was exempt. of interstate representations officials made the representations We consider the finally plaintiff asserts, we do not think allegedly made Forst Burns and ware- plaintiff would be to estoppel entitled un meeting Dickinson in the houseman Feb- der the cases which plaintiff cites. This ruary Here we have a clear-cut fac- case differs the ordinary tax estoppel dispute. tual Dickinson testified Forst indi- case in an important respect. Ordinarily meeting in the that cated interstate ware- the plaintiff in such a is case one taxpayer, subject housing activities were not to the who shows he received information from a tax, any that he said “I don’t see need for tax agency and g. acted on it. E. La So go Legislature. at this time to to the you ciete De Francaise Bienfaisance Mutuelle v. telling this is what we you going I’m are Cal.App.2d Employment Comm’n, California thing out rule once this of Court.” P.2d 47. Here however the directly contradicted this Forst testimo- plaintiff is a statewide association of ap ny. The trial court believed Forst and proximately 65 members. Plaintiff claims representations he made no that found stor- estoppel each of those members. But age goods exempt. of interstate The we find no substantial evidence plain that findings trial court’s are entitled to consid- representatives tiff’s relayed alleged 344(f)(7), eration. Rule R.C.P. representations to their individual members indicate,
We doubt Forst would after this directly, indirectly by sending their own just court had Enterprises decided Lee opinions to the members, based on the al favorably Department, case to the that he leged representations. Nor do we find evi ultimately would rule of interstate dence that the individual members then re exempt. goods Forst stated that short- representations. lied on such On the con after this court ly handed down its decision trary, record does contain evidence that in that case he happened plaintiff’s to see from the effective date of the tax in Octo attorney “just mentioned the fact that 1967, plaintiff’s ber leaders and members the Lee Enterprises decision resolved the upon opinion relied of their attorney question on taxation of the services of warehousing that interstate was tax ex on warehouses in interstate com- empt; and the record does show opin that merce it seemed to point me.” At another ion was writing disseminated in all deposition testified, his Forst “I’m confi- plaintiff’s members in April 1968. that the Supreme dent Court decision Specifically with reference to the 1969 up any question cleared that of this meeting Forst, with we find no evidence warehousemen . . . [sic] advice on the interstate commerce clearly spring Forst thus felt in the of 1969 plaintiff’s issue was disseminated to mem- court in Lee En- that the decision of this bers after meeting. such From the evi- storage charges on terprises indicated the have, we dence we can conclude that interstate The plain- taxable. simply members continued their petition for tiff’s certiorari in the Lee En- reliance their attorney’s opinion and terprises case would make Forst even less any alleged representations by Forst had no likely give an opinion warehousemen effect on their conduct. Plaintiff has not nontaxability. find it We difficult to proved reliance its individual members making conceive of his such a statement at alleged Forst’s representations. light time. In of the trial court’s fact all finding including argument evidence In oral plaintiff appeared case, Enterprises suggest circumstance of the Lee that the Department should be *10 sales, the not or affirmatively furnishing it did service estopped because of transpor- of storage the warehousemen that in- tation service.” tell 422.45. the But stat- goods was
terstate taxable. Plaintiff admits that when its members warehousing inception at its taxed and ute engage in wrapping, packing, and packag- an commerce excep- not state interstate did ing merchandise meat, other than processed tion, Tax regulations, and the Commission’s etc., the tax applies, and that the tax ap- tax, the inception the of services adopted at plies of course when its members mer- store warehousing without an likewise covered non-merchandise, chandise or without more. exception. commerce Plaintiff interstate hand, On the other the Department admits case, none, we no and have found cites that wrapping, packing, packaging, and estopped officials are holds non-merchandise, transporting without tell affirmatively taxpay- if do not the more, taxable, is not and that the mere his transactions are taxable under such er moving goods of par- is nontaxable. The circumstances. dispute ties’ relates to wrapping, packing, packaging, we have the fact that the Tax and then again moving Here and and stor- Department regu- ing, and the non-merchandise. Commission procedure by letter providing the lations — members, Some of in addition ruling. obtain a Di- by application or —to to warehousing, engage in moving house- Department’s Briggs testified the rector goods. hold We to will refer those mem- requests is to rule on written “so policy move, bers as Preparatory movers. to a the the completely question.” we understand movers wrap pack goods. and the Since the proceed under Plaintiff did not choose merchandise, goods are not the tax ordinar- regulations. those would to the ily apply wrapping not and occasions, however, packing. On some Supreme Finally, the California Court has mover stores the goods in his estopped warehouse said that while the transporting before them to their matters, destina- “the case must be clear some tax tion, example, when he injustice great.” consolidates United States and loads when owner is not ready Fidelity Guaranty Co. v. State Board & at receive destination. 303 P.2d The 47 Cal.2d Equalization, Department asserts that ease, when such with its con- 1037. The instant occurs, charge wrapping pack- and sketchy and evidence of flicting testimony advice, ing automatically test, becomes taxa- alleged does not meet oral wrong. ble. Plaintiff claims this general- is applicable does it meet the test nor Paveglio v. Firestone cases. ly estoppel statute, construing In a tax Co., 636, 639 & Rubber 167 N.W.2d Tire resolve the taxpayer. doubts favor of (“with proof of all ele- (Iowa) strict Iowa National Industrial Loan Co. v. Iowa demanded”). being ments Revenue, Dep’t State 224 N.W.2d properly trial court held We conclude the (Iowa). taxability only We find if it to application is entitled appears clearly to be intended from the estoppel. the doctrine of re language of the statute. In Estate of Packaging. Revenue, Wrapping, Packing, Department Dieleman v. II. services, 459, 461 the tax Among (Iowa). hand, other enumerated N.W.2d On other “storage ware- “[Exemption strictly services of statutes must be applies con locker,” “warehouse,” house strued and doubts must be resolved packaging packing, against exemption “wrapping, and in favor of taxa meat, processed than claiming merchandise tion. burden is one fish, vegetables.” exemption fowl and Code show clearly right his there exemp- also states College Testing Program, 422.43. statute to.” American Forst, tions, “gross receipts (Iowa). from Inc. v. one which 182 N.W.2d *11 appear would Fraternal Order of to turn on predominant also Aerie the See Holland, 226 N.W.2d service involved in the Eagles v. situation.
(Iowa). Thus an may assigned individual to a two-year duty tour of abroad. He may upon relies the defini- Department The pack have a mover his goods household 422.42(13), “services” found in tion of § place them in the warehouse, mover’s to be rendered, “all acts or services 1975: Code kept there for the two-year period. The furnished, . . . performed or for a may individual intend to have the mover by any person valuable consideration en- transport the goods household at the end of occupation or gaged specifi- business period the to a different house which the in this division . . . .” cally enumerated individual owns. We could not fault (Italics added.) Department The argues Department ruling here that storage is that since warehousing specifically is a enu- predominant service, so that the pack- merated service and since a mover who also ing is taxable. goods engaged stores in warehousing, On the hand, the individual may be all services rendered him with respect to transferred from city one to another in this goods, including wrapping packing, country. He may have a partial truckload are automatically taxable. The trial court goods, household which the packs. mover Department. held for the mover goods take the to his ware- We cannot go Department as far as the house placed to be with another partial load argues. section, 422.43, The next goes on § headed in the same direction. The mover to provide, “The following enumerated may leave the goods in the warehouse over- subject services shall be to the tax herein night or even for days, several awaiting the ” imposed gross taxable services: . . rest of the load. We predominant think the (Italics added.) Then follows an enumer- service here is so clearly moving that ation of services including warehousing. Department could not reasonably rule the We think the legislature did not intend to packing to be taxable. make all activities of a person automatically Between these extremes cases will arise merely taxable because some of his activi- in which the Department will have to deter- ties are taxable. We believe the correct mine from the situation pre- whether rule to be that the tax applies only to the dominant service is moving or storage. enumerated services. questions in a Since the legislature has seen fit place given are, case what activities does an enu- the administration of this law in the hands merated service encompass, and what serv- of the Department, Department’s deci- ice is particular involved in the situation? sion given situations will control unless within 17A.19(8)(g),
As to the Code 1975. § first of See also questions, these 422.55(1). service of transportation goods of household undoubtedly encompasses wrapping and We thus overturn portion of the
packing the goods; transporting unpacked judgment trial court’s upholding the De goods household impractical would be if not partment’s position that storage of house unfeasible. But the service goods transported hold by a mover auto household goods also undoubtedly encom- matically renders the wrapping, packing, passes wrapping and packing. A ware- packaging goods of the taxable. houseman could practicably store un- Standing. III. issue, The third some- packed pots furniture, pans, bedding, independent what two, first stems and articles clothing. attack the validity of As to the question second the application of 422.33 of the Code to —whether service particular involved in a situation is foreign corporations deliver transportation answer points in Iowa to customers in Iowa. —the Prior gross sales an income tax on “within imposes 422.33 Section 422.33(l)(b) state” were defined 422.33(1)provides by § corporations. Section Iowa “gross Code as sales from sold part: relevant and delivered within the state . . . .” 1. If the trade or of the cor- business *12 (Italics added.) An amendment effective poration entirely is carried within the on 1, 1971, January deleted the italicized state, imposed the tax shall be G.A., words. 64 ch. 37. Thus § since income, entire net if such trade but corporation that date a foreign has been business is partly carried on within and taxed on income from the sale of goods state, partly the tax shall be without the point delivered in Iowa from Iowa even portion imposed only on the of the net though the sale effected outside the income to the reasonably attributable result, foreign state. As a if a corporation state, trade or business within the said Davenport, Iowa, solicits orders in ap- but net income to the state attributable to be proves the orders and stores the merchan- determined as follows: Moline, Illinois, dise in and makes delivery (a) class of of the income [Allocation from Moline to Davenport, the sales are not interest, dividends, rents, consisting of allocated to Iowa for Iowa income pur- royalties.] poses. But if corporation stores the merchandise in Davenport and makes deliv- (b) Net above income of the class hav- ery from point to the Davenport cus- ing been separately allocated and deduct- tomer, the sales are allocated to Iowa. ed as provided, above remainder of Plaintiff’s evidence indicates that because taxpayer the net income of the shall be allocation, of the latter some foreign corpo- as apportioned allocated and follows: rations have taken their out of Iowa than manufacture [Income warehouses and them stored in nearby personal or sale of tangible property.] states. This of course decreases the busi- Where income ness of is derived from the man- members. tangible
ufacture or
personal
sale of
Plaintiff
validity
attacks the
422.-
§
property,
part
thereof attributable to
33(l)(b) insofar
foreign corpora-
as it taxes
business within the state shall be in that
tions
only
whose
with
contacts
Iowa are
proportion
gross
which the
sales made
solicitation of sales in Iowa and storage of
gross
within the state bear to the total
goods in Iowa warehouses.
Plaintiff
sales.
422.33(l)(b)
claimed on trial that
is invalid
§
it
to the
contrary
equal protec-
because
gross
corporation
sales of the
with-
tion clause of the United States Constitu-
gross
in the
to be the
state shall be taken
tion, it creates an undue burden on inter-
sales
within
delivered
state commerce in violation of the Com-
state,
excluding
transporta-
deliveries
merce Clause in
of Article I
of the
§
tion out of the state.
Constitution,
“arbitrary
it is
and unreason-
able,”
prohibit-
Since
a federal statute has
and it violates the federal statute we
have cited.
court
The trial
did not reach
imposing
foreign
ed
state from
claim,
the merits of plaintiff’s
holding that
corporation a net income tax on income
plaintiff
standing
did not have
to attack
within the
from interstate
derived
422.33(l)(b)
neither
because
nor
if the corporation’s
commerce
business
foreign corporation
its members is a
activity
is the
within the state
solicitation
taxed by that section.
tangible
orders
personalty,
for sale of
if
approv-
orders are sent out
state for
In arguing that it has standing, plaintiff
al,
if the
orders are
approved
filled
relies primarily upon federal cases. Since
shipment
point
from a
outside the state. 15 plaintiff’s
upon
claims are based
the United
statute,
U.S.C.A.
States Constitution and a
federal
enlighten-
Supreme
cases for
United States
look to the federal
Court held a
person charged with
standing.
being
accessory
an
ment
use
illegal
of contraceptives
to have
its members have
Plaintiff stresses
standing
rights
to raise the
of the persons
losses be-
substantial
economic
suffered
to whom he had allegedly acted as an acces
422.33(l)(b) and relies
such
cause of §
sory.
Connecticut,
v.
Griswold
381 U.S.
Carr,
186, 204, 82
as Baker v.
369 U.S.
cases
479, 481,
1678, 1680, 14
85 S.Ct.
L.Ed.2d
(the
gist
7 L.Ed.2d
S.Ct.
Court
513. The
also held
society
that a
in the out-
standing
“personal
is a
stake
engaged
private
education of children
come”).
argues, reasonably,
Plaintiff
standing,
on the basis
rights
overturning
a stake in
members have
its
children,
parents
guardians of the
*13
“injury
422.33(l)(b) they have suffered
§
—
requiring
to attack a statute
all children to
fact” because of the
statute.
schools.
public
Society
attend
Pierce v.
of
Sisters,
510, 534-536,
571,
268 U.S.
plaintiff
But
overlooks
deci
45 S.Ct.
573-574,
1070,
L.Ed.
who has
69
1078.
Court
party
which hold that a
suf
The
sions
may have based standing
not
in that case on
injury
usually may
in fact
assert
fered
the close teacher-student
Se-
rights
relationship.
of
tertii.
persons jus
third
—
dler, Standing to Assert
Seldin,
490,
2197,
Constitutional Jus
v.
422
95 S.Ct.
Warth
U.S.
Supreme Court,
Tertii in the
71 Yale L.J.
2205,
343, 355;
45 L.Ed.2d
McGowan v.
599, 642. The relationship
present
in the
429,
1101,
81
Maryland,
420,
S.Ct.
366 U.S.
case between the warehousemen and the
401;
1107,
393,
6 L.Ed.2d
Barrows v. Jack
corporations
foreign
ordinary
is an
commer
1031, 1034,
son,
249, 255,
346
73
U.S.
S.Ct.
cial
a relationship
one.
usual
Such
has not
1586,
97 L.Ed.
1594.
ly been held sufficient to allow
to
party
the rights
Plaintiff
of
does assert
persons’
third
champion
rights.
Id. at 638.
persons
foreign corpora
third
here —the
developed
The
has
excep
Court
another
Plaintiff
422.33(l)(b).
taxed under
tions
§
tion,
the rightholder
difficulty
where
has
are
corporations
that
those
denied
claims
his own
asserting
rights.
v.
Eisenstadt
protection
contending that
equal
of law.
In
Baird,
438, 446,
1029, 1034,
405 U.S.
92 S.Ct.
422.33(l)(b)
burden
is an unconstitutional
358;
349,
31 L.Ed.2d
Sullivan v. Little
commerce, plaintiff
ad
upon interstate
Park, Inc.,
237,
Hunting
229,
396
90
U.S.
right
corporations
the foreign
vances
of
404,
400,
386, 393;
S.Ct.
24 L.Ed.2d
Barrows
In
engage in such commerce.
its attack
to
Jackson,
v.
supra,
257,
346
at
U.S.
73 S.Ct.
422.33(l)(b)
“arbitrary
as
and unrea
on §
1596;
1035,
Note, Standing
at
97 L.Ed. at
sonable,”
means that
plaintiff apparently
Tertii,
Assert Constitutional Jus
88 Harv.L.
foreign
statute deprives
corpora
423,
(1974).
Rev.
425
But the
here
evidence
process.
relying upon
of due
And in
tions
that foreign corpora
contains no indication
statute, plaintiff
the federal
asserts the in
validity
tions are unable to attack the
foreign
of the
corporations
terests
422.33(l)(b)
if
wish.
statute
attempts
protect
bur
The Court has made a
exception
third
densome taxation.
where, unless assertion of the
person’s
third
jus
general
against raising
rule
tertii
The
rights
permitted,
those rights would
applies
The
thus
in full force here.
courts
be
and adversely
diluted
affected. Eisen
developed
exceptions
however
several
Baird, supra,
446,
stadt v.
party to a Among and 348. other changes, these en- is that the tax problem others. Plaintiff’s extinguished actments the state tax com- parties to this falls on which are entities January 1,1968, mission effective substitut- action. department ed a revenue, and raised con to the same Our own decisions lead sales and use taxes from per- two to three in a clusion. This court has held number cent. A three percent tax was imposed on only a cases that member class sub gross receipts from 59 enumerated services equal raise an jected to discrimination (§ 422.43, Code, 1971) which the “retail- Shama, claim. v. protection Green ers”, tangible inas sales of property, were (Iowa); Pipe Mid-America N.W.2d (§ 422.49, Code, forbidden absorb Comm’n, line v. Iowa Co. State Commerce 1971) were required to extract from the *14 804; 1304, 1309, 801, 125 N.W.2d 255 Iowa 422.48, Code, (§ 1971). service consumer The Pipeline Co., v. Natural 233 Browneller Gas 1, The service tax was effective October 477; 692, 474, 686, 8 Life Iowa N.W.2d Iowa G.A., 348, 1967. 62 ch. 35. The state tax § Supervisors Ins. Co. v. Board of of Black charged commission was with administra- 777, 782, County, 190 180 N.W. Hawk Iowa tion the of act. Commission chairman Earl 721, 723. also 16 Am.Jur.2d Constitu See Burrows, testified, Jr., “we a rela- A. had 319; 123 at 16 tional Law C.J.S. Constitu § tively short time in which get informa- 88 at tional Law 260. § tion out the administration of the collec- in by One case Iowa involved a claim taxes, tion of the so would make talks plaintiff outlawing statute studded invite also members associations or snow in unreasonably tires interfered with people, interested businessmen or others in terstate court commerce. This held to discuss with us the various facets standing get lacked raise the claim law and their ideas and also get ours. * * * because did not [Tjrying promulgate show that he himself rules and * * * regulations engaged was in such v. was difficult very commerce. Kruck it Needles, 479, 144 296, 470, my understanding Iowa that we stay 259 N.W.2d would taxability away from the of areas in which 302. interstate commerce would come The up.” correctly court held that plain- trial 30, hastily promulgated September rules standing tiff 422.33(l)(b). lacks to attack § day opera- before tax became Appeal costs are taxed two-thirds were, tional, main, merely repeti- in the plaintiff and one-third to the Iowa Depart- tion of statute and a loose definition ment of Revenue. services affected. respective part, part. Affirmed in reversed in members, many pro- Plaintiff’s of whom warehousing temporary property
vided except MOORE, J., All Justices concur C. moving transportation their interstate REYNOLDSON, business, RAWLINGS logically questioned whether un- JJ., HARRIS, Clause, who dissent. der the Commerce United States Constitution, required charge REYNOLDSON, (dissenting). Justice this their part tax on business. There novo I always exemption In our de review have concluded been an in the sales transportation serv- support the record does not tax law for “service of factual 774 1966; Code, has and for never state
ice,” 422.45(2), challenged tax commission- property “which er Burrows’ tangible personal statement the tax sales of commission taxing under had the prohibited assigned duty is “to help taxpayers this state laws of the or United the constitution know what is to be taxed and what is not.” * * 422.45(1), The *.” Section States 3,1967 So Mr. October Primmer on called legislation Code, The new amended the commission and asked for the “top by adding, following latter provision man”. After chairman Burrows placed the words “services ren- “property”, word on the line Primmer told him “we were in G.A., performed.” 62 dered, furnished * * * period now that we were his 22(1). ch. * * * unpaid collector, but we were of federal deci- Language in a number going job to do the for him as required by * * encouraged questions sions would guidance law but we needed some .” involuntary tax the new collectors. Primmer detailed the warehouse tax prob- 245, 252, 279 Kentucky, Helson v. U.S. 49 lem his moving company en- 279, 281, (1929) (“tax 73 L.Ed. S.Ct. countered because merchandise was sent to upon the directly which falls use of one of his company from of state suppliers, out the means which commerce is carried on warehouse, unloaded its then loaded on commerce”); directly Puget burdens that company complete trucks to delivery to the Commission, Co. v. Tax Stevedoring Sound ultimate consignee. Burrows replied, “If it 72, 74, 82 L.Ed. U.S. S.Ct. came across the line coming your into (1937) (“The loading business of and warehouse, it is involved interstate com- unloading being foreign interstate or com- exempt.” merce and that merce, Washington the state of is not at Primmer then detailed warehouse tax liberty privilege doing to tax the it problem by Maytag, created shipped *15 a exacting percentage in return therefor product its company’s to his Davenport gross the Federal receipts”); Compress & delivery warehouse for into both Illinois McLean, 17, 22, W. v. 291 Co. U.S. 54 S.Ct. and Iowa. At point put Burrows “our (1934) (“Here L.Ed. 627 the attorney” telephone on the who suggested privilege taxed a [operating is warehouse] the charged tax be on warehouse services exercised interstate commerce before be- stayed Iowa, merchandise which in but of the tax gins, hence the burden the not on that into delivered Illinois. commerce too indirect and remote to “very Burrows testified it was possible" transgress limitations”). constitutional Primmer could made telephone the regulations promulgated by the tax call; the commission was receiving avoided the totally commission above issue. many try give calls and “we would to Eminent told legislators members of the guidelines for the of the collector tax.” He plaintiff it was the legislature’s association testified it position was his there would be intent exempt to interstate commerce. It no warehouse on goods tax collected coming only natural that Ernest Primmer and into going Iowa or of Iowa and out on this in position, firing others like line and point among the three commission members charged collecting tax, with should con- “I probably majority opinion, had a if not tact the commission. Nor do I understand everybody’s.” testified, Burrows further be department asserting to here that “we were going apply the tax to to that it prior neither nor the commission had a part of charges that were attributable duty to advise these collectors. Rather it stay that would in Iowa.” it arguing seems to be had no obligation request regardless unless the was in Thus an writing uncertainty and in con- any estopped cerning identity event it could not be commission at- by oral agents. advice of its I will touch torney on these who participated Primmer points, infra, but note here the department conversation, Primmer said opinions he sion, those time by received were held at that Cunningham, Donald E. assistant sales state tax commission. record establish- director, tax probably others whose tour, es on a later Des Moines warehouse identity in the record is uncertain. representatives of plaintiff conducted Forst testified warehousemen “were organization for Burrows and com- concerned about the many different kinds personnel, mission Burrows further con- they provided services that and which of position firmed his there should no tax these services would be taxed and which warehousing charged for merchandise mov- might be exempt”, they were “definitely and he ing interstate commerce then looking for advice and direction as to what expressed same advice. they should do.” Several times in his testi- time During plaintiff organization this mony Forst stated he could not recall giv- members and little money. ing ruling. them He did volunteer “I Burns, secretary, The executive Frank R. may have made statement these month. per “pipeline” received An oral $15 obviously are consign- interstate exchange for the of information about the * * * ment I making any but don’t recall legislation new had been among established * * * positive levy statement .” through members the association its ex- On several he occasions carefully limited his secretary. ecutive Primmer testified he fed response, relying department’s fail- reverse”, the pipeline relaying “in the infor- ure to issue “formal ruling”, which he mation he received from the commission to defined as a written ruling. He finally Burns, who confirmed the information ventured, “Well, my I knowledge, cannot “pretty well dovetailed” with “what had positions recall or all taken in relation given been an attorney Iowa tangible personal property moving in in- (Emphasis Motor Truck Association.” sup- terstate commerce and performed services plied.) is a clear to be There inference on that property.” drawn from the record that the substance Assistant sales director consultation, Cunningham telephone of the Primmer fed agreed the warehousemen back into obtained little “pipeline”, what termed the reached the information from Forst on members of associa- this tour. He tion. testified they reported they collec- ting anything except purely “what was in- January 1,1968, the state tax commission trastate or local They warehouse.” “want- department went out of existence. The *16 guidance.” ed some Cunningham viewed place revenue in its stood and William H. with some give awe Forst “didn’t Forst just arrived in Iowa to be its * ** anything. direct answer on I ad- director. as deputy Burrows remained * * * mired his kind of defense.” He the director. Members of plaintiff organi- quoted saying give Forst as “We you will yet any zation had not received written something,” “they because needed some guidelines, regulations relating rules or finalities along somewhere the line.” impact the commerce clause on their of They tax collection duties. were confront- Sales and use division director Shel- “top ed with a new man”. dahl also conceded warehousemen on the Forst tour wanted a determination Another tour Des Moines warehouses which services had to “collect and by plaintiff pay conducted director taxes on.” While he could persons not recall Forst’s industry Forst. Several words, exact got impression he “as present, including long executive secretary it Line as came in Storage Burns of Blue and Dave interstate and was labeled Little out Storage. go Transfer interstate and Merchants The continued on inter- * * * department represented revenue exempt would be [it] Sheldahl, Forst, Everett director A. director the tax.” apparent inconsistency be- use department’s sales and tax divi- Cunningham tween the and Sheldahl testi- mony may explained by the fact der regard to the interpretation of this * * * group together was not at all times during thing so we went to again him the tour. and asked if an order could be given, and he was not position in a time, at The majority concludes the ware- because of the involved, lawsuits to issue inspection house Burrows took was the an order. We asked him at time Forst tour in February 1968. Burrows point blank whether he thought we testified he toured one warehouse in 1967 go should to the Legislature and possibly and Mr. subsequent Forst took a tour. tie onto one of the bills that were being Forst to a single testified tour of two ware- proposed at that time. His answer to us February noted, houses in 1968. As above was that we had no problem and there Cunningham and Sheldahl depart- from the would be no reason for us to spend our ment were along. Sheldahl and Cunning- money.” ham separately denied recollection of Burrows accompanying them. Forst testi- As a result of that meeting, plaintiff organ- “ * * * fied A1 Burrows may have been ization did pursue not any legislation. with trip quite possible, us. That is Dickinson’s recollection of the meeting again but I can’t resurrect anything that was fully specific. as Forst could not recol- speak directly would to that.” The only lect this meeting or anything about it. person present who placed Burrows on the While it seemed to him there were two Forst tour was plaintiff’s executive secre- meetings, testified, he “Well, quite possibly tary Immediately Burns. after stating so if there had been a second meeting we gave he the following testimony: would have had it here because we would “Q. Cunningham Was Mr. on the tour? have already been to the field to look at it. A. Yes. There was some that met us at But I can’t recall a second meeting, nor can the luncheon. Now it is a possibility that I find any evidence of a second meeting.” maybe confused, this is where I became department produced never its division because we had lunch with people these director Sheldahl to refute the testimony of afterwards.” Burns Dickinson, although placed both
The inference is that Burrows may have him at the conference. Nor was Sheldahl’s lunch, met group although he did attention ever directed to this meeting Dick- repeat visit., his warehouse Majority’s inson and Burns testified about at trial. conclusion there was only one tour which Sheldahl’s only testimony was on was made both Burrows and Forst pre-trial discovery deposition. At the most against the great weight of the evidence. only gave negative response to the question, you
When “Did have any director Forst did not comply with other discus- sions with promise “give you group his something,” Burns warehousemen oth- er than the Dickinson, you one Darrell vice described president of in February of 1968?” (Emphasis Mid-America supplied.) Lines Public course, Warehouses Of *17 the evidence Household Goods discloses he was only Division of Kansas an City, ob- server and Missouri did not participate and a member in the discus- sion with directors, board of Dickinson paid him an office Burns. call. places Burns the time in March April or The majority only overlooks the 1969, Dickinson in late 1968 or early 1969. department’s failure produce Sheldahl’s Both testified present. Sheldahl was Burns testimony about this meeting, it refuses to
testified they explained again to Forst ex- give any weight to the testimony of Burns actly they tax, how were handling the regarding Dickinson Forst’s statements further, at this second meeting because “Forst di- “Well, our primary purpose you rectly contradicted this testimony.” I find —As know, we had not received a written or- no direct contradicting testimony in the time, Sheldahl, said, the case of Forst’s “I do only record. As in recall saying with Briggs to the testimo- Mr. prior leaving attention was never directed —and regard. of Burns and Dickinson this would have been in ny late 1969—that inferentially area, audits in warehousing know, While some of his statements you other statements we had testimony, contradict their to do because we had to address are evasive. ourselves to that policy that we had never issued rule on.” majority’s second reason for dis- counting testimony the Burns-Dickinson is got warehouse audits underway in Enterprises court had filed the Lee Briggs that this 1971 after department became the longer any and there was no reason director. He decision had not been a party to the guideline. a written But delay prior given for Forst to advice Ap- warehousemen. Enterprises litiga- the Lee case was still in parently quoted the “rules” by the majority way tion and on its to the United States insufficient even for the field audi- No- Supreme opinion According Sheldahl, Court. Our was filed tors. they ques- 12,1968. vember December when tions and “guidelines”. needed The re- petition rehearing pending sponse for adoption was not of rules or regula- here, stay of plaintiffs application (Sales filed for tions but the communication and Use final decision procedendo upon- any Bulletin) adverse Tax to the field staff dated Janu- them until final ary determination 1972. More years than four after Supreme Following a effect, United States Court. service tax went into the depart- ruling adverse to the Lee ment Enterprises finally stated in plain- writing position its petition rehearing, tiffs on their on seven different warehousing services staying procedendo situations, entered an order declaring some taxable and some continuing injunction lower court exempt.
against collecting plaintiffs the tax from A analysis close of Forst’s deposition $100,000 bond, posting their demonstrates, contrary department’s ar- 4, 1969, June the service tax on was filed. gument, that he never told the warehouse- G.A., advertising repealed. ch. 248. men they if did not collect the tax on appeal to the June United goods, they of interstate proceeded Supreme ap- Court was dismissed on States at their own risk. Forst said that was the question, motion. Without at the pellant’s position he took with the advertising peo- time of the Burns-Dickinson-Forst-Sheldahl ple. On cross-examination he was asked meeting, department very was still point-blank, you “Did tell that to the ware- much involved in the Lee Enterprises litiga- “Well, housemen?” to which he responded, I tion. don’t know that I told that to the ware- * * * majority assigns Thus the two reasons housemen. I do not recall telling clear, disbelieving the explicit and detailed them that. only That is the area [ware- testimony of Burns and Dickinson concern- housing] that I can see that I would have ing representations sup- Forst’s are not said something positive sounded as as ported by the facts. saying what are that I said.”
Although department Overall, knew the ware- testimony Forst’s was evasive collecting housemen were on stor- continually and inconsistent. He hedged by age property moving stating in intrastate com- the department issued no “formal merce, ruling”. no mass audits were made until aft- The implication plain he did not Enterprises appeal was anything er the Lee dismissed. consider he or other employee slip, In a classic Freudian Forst testified said to binding unless it was reduced to *18 department in the there was “discus- writing. Although conceding the ware- Enterprises sion after the Lee case that we housemen orally requested a for- posi- needed to revise our —not revise our mal ruling they maintained if tion, but to enforce the rule.” At another a request made written for a formal ruling given. ing, But on three
it would have been or that he was employed by plaintiff at testimony, occasions in his he maintained the time Forst claims to have made the take department position would not alleged statement to the attorney relating constitutionality levy because to warehousing service following supreme was before the court. Enterprises Lee case.
There is no shred of evidence in this The record is plain Burrows, record warehousemen ever told department lawyer, and Forst all made oral they request should submit written representations to the warehousemen ruling, ruling or that a “formal” only await- they reasonably relied. But taking such demand. What does come through ed possible worst view of the evidence impression all the evidence is the clear from standpoint, then it must be guidelines received oral but no written conceded that although repeatedly pressed from the commission in 1967 because of the guidelines the department played a cat- body state of that its employees chaotic game and-mouse with the warehousemen, following legislation. the massive After in which they were forced to either collect Enterprises the Lee case was (De- instituted and remit the tax peril at the of a class 12, 1967) department cember was reluc- action consumers if they were wrong, or it writing tant to reduce to what was tell- not collect it pay it themselves upon ing litiga- warehousemen for fear the assessment levy by the commission if might adversely tion affected. that course of proved action to be in error. Nor am I persuaded by defense plaintiff organi-
Burns testified because counsel’s suggestion in argument oral the plaintiff zation had no funds an ad hoc committee could have department the Motor sued the prevailed upon Truck Association to obtain guidelines. written to lend assistance of its Those lawyer attempt- whom the state ing placed to “find out what their on the cutting edge of tax collection [commission] ought thinking regard would be in to our to have storage been guidelines furnished portions our business that were in inter- and I am convinced in this instance they were, state prevailed commerce.” This until “we albeit in the form of oral advice. received a final notice attorney] from [the In 1958 when Professor published Davis through the Motor Truck Association in the his “Administrative Law Treatise” he stat- spring of ’68.” The reference is apparently ed, 17.06, p. 519: ato communication in March or April of “What the law of estoppel govern- attorney 1968 from the to the truck associa- mental units most needs is a larger meas- tion, dealing incidentally with service tax judicial ure of freedom from the rigidity setting guid- out the same of the oft-repeated statements that a gave ance Burrows the warehousemen. government or local cannot be es- majority plaintiff asserts associa- topped. Equity courts should restore tion’s members relied on this information power their own to determine whether or the attorney, not the advice of Bur- any particular not in jus- circumstances rows and Forst. This is belied by the fact requires tice resort to the doctrine of the warehousemen from the beginning col- equitable estoppel. The fortunate fact is lected tax only goods moving good that a many holdings recent ap- do intrastate, six prior lawyer’s months to the ply governmental that doctrine to units.” communication. This was in direct con- large A number of supporting decisions opinion formance with the then held quoted last sentence are cited and discussed majority of commission. It goes pages at 520-525. against all opinion reason assert that By communicated to the warehousemen. date of publication of this “Adminis- Neither is there evidence the trative Law Treatise 1970 Supplement” hired an attorney 17.09, obtain a “formal” rul- say, p. Professor Davis could 607:
779
allowing estop-
taxpayer
movement toward
the
“The
obtained preliminary advice
pel
governmental
units continues.
agent.
of
a
from
field
The record neither
govern-
allow the
courts often
Federal
disclosed the “nature of his work nor the
estopped,
to
ment or its officers
be
of
authority.”
extent
his
Id. at 511. Here
York,
of
highest
the
courts
New
Illinois
the warehousemen went directly to
“top
the
municipalities
be
hold
to
California
man”. There the erroneous oral advice was
estopped.”
promptly
by
corrected
a written communi
cation. Here the oral advice was corrected
recent
Among
more
cases cited and
years
four
later.
in
Nothing
S & M Fi
Davis,
in K.
Administrative Law
discussed
prevents
nance Co.
us
plain
from providing
17.03,
Treatise,
pp.
1970 Supplement
588—
tiff relief in
case.
this
17.06,
591,
United
pp. 594-597 are:
States
Bank,
962,
v. Fox Lake
366 F.2d
State
Many of the
estoppel
older
decisions from
(7
1966)
es-
(government
965-966
Cir.
held
jurisdictions
articulating hard-bitten
to
topped
bring action under Civil False
in
favor,
rules
the state’s
must be cautious-
a
v.
against
bank);
Claims Act
Schuster
ly viewed in
light
a modern movement
Commissioner,
(9
1962)
ing May out of state would goods destined
Iowa of G.A., ch. any event. exempt in
2.§ J.,
MOORE, and RAWLINGS and C.
HARRIS, JJ., in this dissent. join STEINBACH, Appellant,
Wayne
Cross-Appellee,
v. WESTERN INSUR
CONTINENTAL COMPANY, Appellee,
ANCE
Cross-Appellant.
No. 2-57021. of Iowa.
Supreme Court
Jan. 12, 1976. March
Rehearing Denied call. notes Those stated a radio station beamed into Davenport of things, Ruling official “No for Tax Tax took the both states. The Commission Ruling.” Commission” “Unofficial and position that could tax the full adver- Iowa explained Primmer he testified to Bur- tising paper pub- revenue because that part rows of his warehouse business the signal originated lished in this and state involved of storage merchandise here. in district court that case After trial on shipped consignment manufacturer court, came to which sustained the Tax this or distributor held in and his warehouse 12, position on Commission’s November until removal to fill lot lot local orders. Inc. Enterprises, 1968. Lee v. Iowa State Primmer said Burrows indicated that Comm’n, (Iowa). N.W.2d Tax charge goods storage which came petitioned plaintiffs in case the United into Iowa from another would be ex- for a Court writ certio- Supreme States tax, empt from the services whether petition rari their after the but dismissed goods were delivered from the warehouse repealed the tax on adver- legislature Iowa to in to someone Iowa or someone in anoth- 248, 63 G.A. ch. 1. tising altogether. er state. Primmer also said he asked Bur- in litigated That the courts at the case was rows about of the tax application to stored present time in the case of the events goods which in originated Iowa but were secretary, executive Frank ultimately state, delivered outside the Burns, it. The was aware of Tax Commis- responded Burrows he did not know the that case position bearing sion’s in has a on gave answer to that question the tele- parties’ here. conduct phone to a in his person office named Bracewell, attorney. plaintiff’s appeal The first who he said was an part deal largely We must thus with Primmer testified Bracewell factual. indicated that receipts goods give weight storage considerable We evidence. destined findings not bound exempt. the trial but are leave Iowa were also court’s trial, he, Little, Forst, Burrows, warehouseman evidence at read into deposition In a recall named he did not tax official Sheldahl were said Burrows Earl Primmer, although it present. presence He said of Burrows’ on with conversation tour, He did indicate place. “I remember him well.” very have taken We could he had felt ware- that in 1967 conclude that the tour Burrows referred to deposition his charges goods destined storage place in testimony February in his did take house Mr. from the tax. exempt Iowa leave 1968. Burrows testified that on this tour Bracewell, attorney for who was an Harold ques- he discussed the interstate commerce testi- October Tax Commission tion and his under- indicated the conversation not recall that he did fied standing apply the tax would not He also testified related. which Primmer destined out of state. knew he was not October definitely April In the warehousemen received on the services tax. advising anyone opinion a written attorney from their re- of Revenue Department The Iowa apply the services tax did not January Tax Commission placed coming into Iowa from out of state or Forst was director William in Iowa and destined out of originating was his deputy. and Burrows Department attorney testify state. The did at the and a warehouse- Burns February In trial and the source of his information does