768 N.Y.S.2d 33 | N.Y. App. Div. | 2003
Appeals (1) (upon remittal from the Court of Appeals) from a judgment of the Supreme Court (Canfield, J), entered October 13, 1999 in Albany County, which, inter alia, in a combined proceeding pursuant to CPLR article 78 and action for a declaratory judgment, declared Tax Law §§ 301 and 301-a to be facially constitutional, and (2) from a judgment of said court, entered June 19, 2002 in Albany County, which, inter alia, granted respondent’s motion for partial summary judgment.
The relevant facts underlying this proceeding have been presented in our prior opinion and in the recent decision of the Court of Appeals (283 AD2d 78 [2001], revd 99 NY2d 443 [2003]). Briefly stated, in June 1998, petitioner Moran Towing Corporation commenced a combined declaratory judgment action and CPLR article 78 proceeding to overturn a decision of the Department of Taxation and Finance which denied its request for a petroleum business tax (hereinafter PBT) refund premised on the ground that Tax Law § 301 (a) (1) (ii) and § 301-a (b) (2) and (c) (1) (B) violated the Commerce Clause (US Const, art I, § 8 [3]). In November 1998, petitioners Eklof Marine Corporation and its subsidiaries, along with petitioner Reinauer Transportation Companies, Inc. and its successor in interest (hereinafter collectively referred to as petitioners), successfully intervened and joined in these claims.
Supreme Court found the PBT to be constitutional and denied the request for refunds due to a failure to exhaust administrative remedies. While both Moran and petitioners appealed, Moran withdrew its appeal to pursue its administrative remedies. This Court found the challenged sections of the PBT to be facially unconstitutional (283 AD2d 78, 81-83 [2001], supra) and the Court of Appeals dismissed the appeal sha sponte due to the lack of a final judgment (96 NY2d 937 [2001]). Respondent returned to Supreme Court seeking dismissal of all remaining
Supreme Court granted respondent’s motion and declared the operative sections of the Tax Law to be unconstitutional. Petitioners’ requested relief was denied. Although petitioners appealed from that determination, the Court of Appeals, in the interim, reversed this Court’s determination that the relevant sections of the PBT were facially unconstitutional (99 NY2d 443, 445 [2003]) and remitted the matter (id. at 451). Petitioners and respondent then agreed to join the appeal with the remittal; they acknowledge that the pivotal issue is whether the retroactive application of the PBT violated due process and, if so, whether refunds or counsel fees are due.
Tax Law §§ 301 and 301-a (b) (2) and (c) (1) (B) were amended in 1997 in response to Matter of Tug Buster Bouchard Corp. v Wetzler (217 AD2d 192 [1996], affd 89 NY2d 830 [1996]). There, Tax Law § 301 (a) (1) (ii) was found to be facially discriminatory and in violation of interstate commerce because if another state were to enact a similar statute, an entity that purchased petroleum in that state for consumption in New York would be subject to double taxation (see Matter of Tug Buster Bouchard Corp. v Wetzler, supra at 196). Additional sections were, therefore, added to Tax Law article 13-A to clarify and cure this constitutional defect; they provided credits, refunds and reimbursements to entities which were subjected to multiple taxation (see L 1997, ch 389, part A, §§ 151-158, 219). Therein it was specified that Tax Law § 301 (c) was to be retroactively applied to 1984 whereas the amendment to Tax Law § 301-a was to be retroactively applied to 1990 (see L 1997, ch 389, part A, § 219). Other than excepting recreational motorboats and commercial fishing vessels from their scope, the amended laws taxed petroleum businesses that bring petroleum into New York in their fuel tanks either for their own consumption or for shipments made to points within the state; they did not affect the way in which the taxes were to be computed (see L 1997, ch 389, part A, §§ 151-158). It is against this backdrop that we assess whether such retroactive application is violative of due process.
The retroactivity provisions of a tax statute will generally be upheld if they are imposed for a short period (see Matter of Replan Dev. v Department of Hous. Preserv. & Dev. of City of
Here, we find that the 1997 amendments to Tax Law article 13-A cured the lack of internal consistency identified in Matter of Tug Buster Bouchard Corp. v Wetzler (217 AD2d 192 [1996], supra). Their retroactivity served to eradicate the discrimination and, in compliance with due process concerns, “create in hindsight a nondiscriminatory scheme” (McKesson Corp. v Division of Alcoholic Beverages & Tobacco, supra at 40). “Having
Finally, addressing the facial constitutional challenge to this statute (see Tennessee Gas Pipeline Co. v Urbach, 269 AD2d 19, 21 [2000], revd on other grounds 96 NY2d 124 [2001]), we find that petitioners have failed to sustain their burden of demonstrating that the retroactivity provisions are “ ‘ “so harsh and oppressive as to transgress the constitutional limitation” ’ ” (Matter of Boynton Suites v Board of Assessment Review of City of Plattsburgh, 274 AD2d 926, 928 [2000], supra, quoting Matter of Replan Dev. v Department of Hous. Preserv. & Dev. of City of N.Y, 70 NY2d 451, 455 [1987], supra, quoting Welch v Henry, 305 US 134, 147 [1938], supra). Further, we find that the postdeprivation procedures to rectify the unconstitutional privation were adequate (see McKesson Corp. v Division of Alcoholic Beverages & Tobacco, supra at 36-37; see also Tully v Griffin, Inc., 429 US 68, 75 [1976]). Accordingly, petitioners’ CPLR article 78 proceeding must be dismissed. With no successful claim under 42 USC § 1983, there is no entitlement to counsel fees under 42 USC § 1988.
Her cure, J.P., Spain, Mugglin and Lahtinen, JJ., concur. Ordered that the judgments are affirmed, without costs.
We reject respondent’s assertion that petitioners abandoned this claim.