40 A.D.2d 15 | N.Y. App. Div. | 1972
This is a proceeding pursuant to article 78 of the CPLR (transferred to the Appellate Division of the Supreme Court in the Third Judicial Department by order of the Supreme Court, Albany County) to review a determination of the State Tax Commission, which denied petitioner an exemption from the highway use tax under subdivision 3 of section 504 of the Tax Law.
. Petitioner, a partnership whose business is the production of eggs for market, owns approximately 500,000 chickens which are continuously sold and replenished. At the time this action arose, petitioner leased two farms in New York: one at Dresden, the other 17 miles west at Middlesex. The Dresden farm was the principal place of business and it contained office space, garage
Subdivision 3 of section 504 exempts from the applicability of the highway use tax any vehicular unit: “ Owned and operated by a farmer and used exclusively by such farmer in transporting his own agricultural commodities and products, pulpwood or livestock, including the packed, processed, or manufactured products thereof, that were originally grown or raised on his farm, lands or orchard, or when used to transport supplies and equipment to his farm or orchard that are consumed and used thereon or when operated by a farmer in transporting farm products from farm contiguous to his own ”. The crucial words in subdivision 3 for the purposes of this litigation are “ his farm ”, “ exclusively ” and “ contiguous ”. The mere fact that petitioner is a farmer does not automatically entitle it to the exemption. The statutory language is clear and explicit; petitioner must meet the stated conditions or it cannot claim the exemption.
The term “ his farm ”, it is conceded, includes one owned or leased by a farmer. Thus the Dresden and Middlesex farms - clearly qualify, but the contract farms in our opinion do not. The contractual arrangement between the petitioner and the contract farms indicates that the relationship is not that of landlord and tenant but either that the contract farms were independent contractors or bailees. The fact that the contract farmer at all times had possession and control of the hen facilities on his property coupled with the fact that petitioner had to remove
As to the term “ exclusively ” as utilized in subdivision 3, the question is whether it applies to individual hauls or to an over-all time period. Petitioner insists that “exclusively” must be interpreted in light of the purpose of the individual haul citing as authority, 1953 Opn. Atty. Gen. 195, which states: “A farmer who uses a motor vehicle * * * for .a purpose other than those stated in § 504.(3) loses his exemptions under Art; 21 as to all mileage so traveled on public highways during the taxable period involved ”. (Emphasis added.) However, in construing this opinion.it depends on whether the emphasis it put on italicized words or the last phrase 1 ‘ during the taxable period involved ” and under the tax regulations, the State Tax Commission holds that any honexempt use of the vehicle destroys the exemption in its entirety and all mileage, regardless of the purpose of the haul, is subject to taxation (see, especially, 20 NYCRR 471.5, example 3). Moreover, a general rule of strict construction is applied to tax exemptions which favors construction against the exemption (Matter of Schwartzman, 262 App. Div. 635, affd. 288 N. Y. 568; County of Herkimer v. Village of Herkimer, 251 App. Div. 126, affd. 279 N. Y. 560) and the burden is on the one claiming the exemption to show, the statute clearly grants the exemption (Matter of Schwartzman, supra). In the instant cáse petitioner has merely offered a possible interpretation of the statute. He has not shown that he is entitled to the exemption. Accordingly, petitioner cannot claim the exemption for the mileage involved in transporting agricultural commodities, etc., to and from his farms in Middlesex and Dresden as the vehicles are used for nonexempt purposes also (notably, the transportation of feed, commodities-, poultry and eggs to and from the contract farms).
Petitioner’s final argument is that this court should construe the word “ contiguous ” as utilized in the last portion of subdivision 3 broadly to recognize the practices of modern agriculture. Petitioner’s farming operations, however, are clearly not “ contiguous ” by any reasonable definition that could be applied, and, if the granting of the exemption is not in tune with the practices of modern agriculture, it is not for this court to make any necessary adjustments but rather is the prerogative of the Legislature.
The determination should he confirmed, with costs.
Herlihy, P. J., Staley, Jr., Greenblott and Kane, JJ., concur.
Determination confirmed, with costs.