Park 'N Go v. Airport AuthorityPark 'N Go v. Airport Authority
Declaratory Judgments. An action for declaratory judgment is sui generis; whether such action is to be treated as one at law or one in equity is to be determined by the nature of the dispute. - Injunction: Equity. An action for injunction sounds in equity.
- Equity: Appeal and Error. On appeal from an equity action, an appellate court tries factual questions de novo on the record and, as to questions of both fact and law, is obligated to reach a conclusion independent of the conclusion reached by the trial court.
- Judgments: Statutes: Appeal and Error. When an appeal calls for statutory interpretation or presents questions of law, an appellate court must reach an independent, correct conclusion irrespective of the determination made by the court below.
- Taxes: Words and Phrases. A tax is an enforced contribution of money or other property, assessed in accordance with some reasonable rule or apportionment by authority of a sovereign state on persons or property within its jurisdiction for the purpose of defraying the public expenses.
Appeal from the District Court for Douglas County: TRESSA M. ALIOTH, Judge. Reversed and remanded with directions.
Patrick D. Pepper, J. Scott Paul, and Alexander K. Shaner, of McGrath North Mullin & Kratz, P.C., L.L.O., for appellant.
Matthew B. Reilly and Thomas J. Culhane, of Erickson | Sederstrom, P.C., L.L.O., for appellee.
FUNKE, C.J., CASSEL, STACY, PAPIK, FREUDENBERG, and BERGEVIN, JJ.
INTRODUCTION
Airport Authority of the City of Omaha (Airport Authority) appeals the order of the district court for Douglas County declaring a charge imposed by Airport Authority to be an impermissible tax in violation of the Nebraska Constitution. Airport Authority asserted that the charge was a user fee imposed under its statutory authority. In this action for declaratory and injunctive relief, Park ‘N Go of Nebraska, LLC (Park ‘N Go), challenged the charge as an unconstitutional tax. The district court permanently restrained Airport Authority from collecting the charge from Park ‘N Go and ordered Airport Authority to remit to Park ‘N Go all charges that it had collected.
We determine that the charge imposed by Airport Authority was not an unconstitutional tax. We therefore reverse the order of the district court and remand the cause with directions to dismiss Park ‘N Go’s complaint.
BACKGROUND
Airport Authority is a political subdivision of the State of Nebraska charged with operating, managing, and overseeing Eppley Airfield in Omaha, Nebraska. Airport Authority derives its authority from, and is governed by, the Cities Airport Authorities Act.1
Park ‘N Go is a limited liability company with its principal place of business in Omaha. Park ‘N Go operates a surface parking lot located on private property off the premises of Eppley Airfield. Park ‘N Go charges customers daily or hourly rates depending on the length of time a customer parks in the lot. Park ‘N Go offers a shuttle service to transport customers to and from Eppley Airfield. Park ‘N Go does not charge an additional fee for the transportation service, and a customer’s charge for parking is the same whether the customer uses the transportation service or not. Airport Authority grants Park ‘N Go and other transportation providers access to use
RESOLUTION ADOPTED
On June 15, 2021, the board of directors of Airport Authority enacted a resolution (Resolution) that imposed a charge, beginning August 1, 2021, upon off-airport parking companies for a continued right of access to use the Commercial Vehicle Lanes at Eppley Airfield. The charge was imposed as a monthly collection initially calculated as 10 percent of an off-airport parking company’s gross receipts, with the potential for Airport Authority to adjust the fee amount on an annual basis. In the Resolution, which defined Eppley Airfield and its facilities as “Airport,” the term “Gross Receipts” was generally defined as “all monies or other compensation received by a Parking Company from the conduct of its vehicle parking, vehicle storage business and/or shuttle services to Airport parking passengers or Airport tenant parking employees, which shall be separately accounted for by a Parking Company.” The Resolution specifically excluded certain receipts, including “[r]evenues received for providing independent transportation services exclusively for non-Airport parking activity,” from the definition of “Gross Receipts.”
The Resolution stated that pursuant to regulations promulgated by the Federal Aviation Administration, Airport Authority was required to “‘maintain a fee and rental structure for the facility and services at the [Airport,] which will make the [Airport] as self-sustaining as possible.’” The Resolution also stated that Airport Authority “incurs operating, administration, and other necessary expenses related to the Airport roadways and the Commercial Vehicle Lanes” and that it was assessing and charging the off-airport parking company a user fee “in an effort to support portions of the operating, administration, and other necessary expenses related to the Airport and [to] comply with the above referenced [Federal Aviation Administration] regulation.”
For purposes of the Cities Airport Authorities Act, including
any airport operated by the authority, including all real and personal property, structures, machinery, equipment, and appurtenances or facilities which are part of such airport or used or useful in connection therewith either as ground facilities for the convenience of handling aviation equipment, passengers, and freight or as part of aviation operation, air navigation, and air safety operation.
ACTION FILED IN DISTRICT COURT
On July 22, 2021, Park ‘N Go filed a complaint in the district court in which it sought declaratory and injunctive relief against Airport Authority regarding the charge imposed under the Resolution. The complaint named individual members of Airport Authority’s board and Airport Authority’s police chief as defendants in their official capacities. The court later dismissed a claim of unfair trade practices that had been included in the complaint, and it eventually dismissed all the individual defendants, leaving Airport Authority as the sole defendant.
In the operative amended complaint, in support of its claim for declaratory relief, Park ‘N Go alleged that although the Resolution purported to charge a user fee, the charge was instead a tax that Airport Authority did not have constitutional
In support of its claim for injunctive relief, Park ‘N Go alleged that when Airport Authority enacted the Resolution, it had acted outside its authority and imposed a tax under the pretext of a purported user fee. Park ‘N Go alleged the 10-percent “tax” was “inherently unreasonable, excessive, and untethered from the services sold, furnished, or supplied by” Airport Authority. Park ‘N Go further alleged that its property and other legal rights were affected by the Resolution and that it had no adequate remedy at law to restrain Airport Authority from exceeding its authority by enacting the Resolution and imposing the charge therein. Park ‘N Go sought orders enjoining Airport Authority from, among other things, putting the Resolution into effect and attempting to collect from Park ‘N Go the charges described in the Resolution.
TRIAL
The matter went to a bench trial in February 2025 on Park ‘N Go’s claims for declaratory and injunctive relief. At the beginning of the trial, the district court received without objection various exhibits, including the parties’ joint statement of stipulated facts. Other exhibits were received in connection with witness testimony.
Witnesses called by Park ‘N Go included three Airport Authority employees—the chief financial officer, the project manager, and the chief commercial officer—who had been involved in developing the Resolution and who generally testified regarding considerations that went into Airport Authority’s decision to implement the charge set forth in the Resolution and to use a percentage of gross receipts as the measure of the charge. Park ‘N Go also called as a witness its
DISTRICT COURT DECISION
After trial, the district court entered its order ruling on Park ‘N Go’s complaint. The court accepted the parties’ stipulation of facts and incorporated those facts into its order. The parties stipulated, among other things, that Airport Authority was “a non-taxing authority under Nebraska law,” and the court found that “Airport Authority is not granted taxing authority under Nebraska law.” The parties also stipulated that one of the reasons Airport Authority chose to implement a user fee based on gross receipts was because its research showed that other airports imposed similar charges on gross receipts and because Airport Authority used gross receipts as a routine method for calculating user fees for other commercial users of Eppley Airfield. The court made additional findings of fact, including a finding that evidence presented at trial showed that “the amount of the charge was not based upon any estimate of Park ‘N Go’s, or other similarly situated off-airport parking companies, actual usage of the Commercial Vehicle Lanes.”
The district court turned to analyzing the question it stated was presented to it: “whether the charge imposed by the ‘Off-Airport Parking User Fee’ is a fee or an impermissible tax.” In setting forth legal standards, the court stated that Airport Authority requested that the court apply a presumption of validity to the Resolution, but the court declined to apply such a presumption. The court stated that to determine whether the Resolution imposes a fee or a tax, it would need to employ “some sort of legal test,” but that no Nebraska precedent had adopted a clear test for distinguishing between
The district court chose to employ a test urged by Park ‘N Go and derived from a treatise.3 The court set forth the test as follows: “‘The test to determine whether a charge is a fee rather than a tax is whether the charge (1) applies to the direct beneficiary of a particular service, (2) is allocated directly to defraying the costs of providing the service, and (3) is reasonably proportionate to the benefit received.’”
Regarding the first factor, the district court found the evidence showed that Park ‘N Go directly benefits from using the Commercial Vehicle Lanes in its business offering parking to people arriving and departing from Eppley Airfield. But the court determined that because Park ‘N Go could allocate the charge to its customers, the customers were “indirect beneficiaries” of Park ‘N Go’s use of the Commercial Vehicle Lanes. The court stated that the charge was “not a fee to be applied solely to the direct beneficiary” and that instead, “the charge more closely resembles a sales tax,” the legal incidence of which falls upon the purchaser.
Regarding the second factor, the court found the evidence showed that “the charge imposed by the Resolution is not correlated with the off-airport companies’ actual use of the
Regarding the third factor, the court found that the charge under the Resolution “is not reasonably proportionate to the benefit that off-airport parking companies like [Park ‘N Go] receive.” The court stated that Airport Authority was unable “to quantify the costs associated with the benefit of using Eppley’s designated Commercial Vehicle Lanes” and that instead, Airport Authority witnesses testified “off-airport parking companies owe their entire existence to the presence of Eppley Airfield.” The court found this testimony “alarming . . . in that it may permit the Airport Authority to charge off-airport parking companies without limits.” The court stated that it could not “deny the existence of a benefit to off-airport parking companies in their use of the designated lanes,” but it could not find that a 10-percent charge on gross receipts
Based on its application of the test, the district court found that the “Airport Authority’s Resolution imposes an impermissible tax upon Park ‘N Go in violation of the Nebraska Constitution.” The court therefore declared that (1) “the Resolution is unlawful under the Nebraska Constitution, it is invalid, and it is void ab initio,” and (2) “the Resolution is not enforceable.” The court ordered that “Airport Authority is permanently restrained from enforcing the Resolution against Park ‘N Go or hereafter collecting any further sums under the Resolution from Park ‘N Go,” and it ordered Airport Authority to “remit to Park ‘N Go all sums collected from Park ‘N Go since the passage of the Resolution, together with prejudgment interest.” The court ordered Airport Authority to pay Park ‘N Go’s taxable costs.
Airport Authority moved to alter or amend the judgment or for a new trial. The district court sustained the motion to alter or amend to the extent that it (1) ordered the individual defendants dismissed from the action and (2) found that
Airport Authority appeals the district court’s order.
ASSIGNMENTS OF ERROR
Airport Authority assigns that the district court erred in (1) finding that the charge under the Resolution was an unconstitutional tax and not a permissible fee, (2) adopting the three-part test to determine whether a purported user fee is an unconstitutional tax, (3) failing to provide the Resolution a presumption of validity, (4) shifting the burden of proof to Airport Authority, (5) failing to enter judgment in favor of Airport Authority when Park ‘N Go failed to meet its burden to prove the user fee was a tax, and (6) granting permanent injunctive relief to Park ‘N Go.
STANDARD OF REVIEW
[1-4] Park ‘N Go sought both declaratory and injunctive relief. An action for declaratory judgment is sui generis; whether such action is to be treated as one at law or one in equity is to be determined by the nature of the dispute.4 An action for injunction sounds in equity.5 On appeal from an equity action, an appellate court tries factual questions de novo on the record and, as to questions of both fact and law, is obligated to reach a conclusion independent of the conclusion reached by the trial court.6 When an appeal calls for statutory interpretation or presents questions of law, an appellate court must reach an independent, correct conclusion irrespective of the determination made by the court below.7
Before addressing the issues Airport Authority raises on appeal, we find it helpful to clarify the challenge raised by Park ‘N Go and decided by the district court. The challenge Park ‘N Go set forth in the operative complaint was that the charge imposed by the Resolution was a tax that Airport Authority did not have authority to impose under the Nebraska Constitution. Park ‘N Go sought a declaration to that effect and injunctive relief based on that declaration. We do not read the complaint as setting forth a separate claim that even if the charge is a user fee, it did not comply with any statutory requirement that a user fee must be imposed in a reasonable and uniform manner.
The district court likewise viewed Park ‘N Go’s complaint as limited to the contention that the charge under the Resolution was an unconstitutional tax. The court stated in its order that the question presented to it was “whether the charge imposed by the ‘Off-Airport Parking User Fee’ is a fee or an impermissible tax.” The court acknowledged Airport Authority’s power under
In arguing that the charge in this case is not a tax, Airport Authority relies in part on City of Ord v. Biemond,8 in which this court stated that a “use charge or rental fee” imposed by a municipality under
We do not read Park ‘N Go’s complaint to allege a similar claim to that in City of Ord v. Biemond. Park ‘N Go did not allege that a charge imposed under
Park ‘N Go urges that if we determine the charge is not a tax, we should affirm the district court’s order on the alternative basis that even if the charge is not a tax, it was outside Airport Authority’s power under
TEST USED BY DISTRICT COURT
Airport Authority assigns that the district court erred in adopting a three-part test to determine whether a purported user fee is instead an unconstitutional tax. While it was not error for the court to consider factors set forth in the test when analyzing the issues in this case, we decline to adopt the test, or any other specific test, as the controlling test to distinguish a tax from a fee in all circumstances.
The factors of the three-part test considered by the district court were derived from a Nevada case in which the court stated that if the three “criteria fit the charge, it is a fee.”9 But this test was among various considerations discussed in a treatise, including another “three-part test that looks to (1) what entity imposes the charge, (2) what population is subject to the charge, and (3) what purposes are served by the use of the monies obtained by the charge.”10 The treatise begins its discussion by stating that “[t]here is no bright line test for distinguishing a tax from a fee; rather, how such exactions
We agree that no single test can or should be mandated for distinguishing whether a charge is a fee or a tax in all cases in which the issue may arise. Instead, as we describe further below, the facts and circumstances surrounding the imposition of the charge should be considered with an understanding of the general purposes of fees and taxes and how similar charges imposed under similar circumstances have been characterized. We therefore proceed to review the district court’s finding in this case by considering the charge imposed under the Resolution in this manner.
WHETHER CHARGE IS TAX, RATHER THAN FEE
Airport Authority assigns that the district court erred in finding that the charge under the Resolution was an unconstitutional tax and not a permissible fee. We conclude that the court erred when it found that the charge was a tax.
[5] We do not appear to have specifically addressed how to distinguish between a tax and a user fee, but we have considered whether a charge imposed under another label was an unconstitutional tax. In Schumacher v. Johanns,13 we considered a challenge by subscribers of telecommunication services who relied in part on
In Schumacher v. Johanns, in determining that the surcharge was a fee and not a tax, we emphasized the primary purpose of the surcharge was not to generate revenue for governmental purposes, but, rather, “to regulate the telecommunications industry through a rebalancing and restructuring of rates.”16 Other courts have similarly emphasized the primary purpose of a charge when distinguishing between taxes and fees.17
In Ace Rent-A-Car v. Airport Authority,18 the court considered whether a fee imposed by an airport authority on off-airport car rental companies was an unauthorized tax on income, rather than a user fee. The airport authority possessed no taxing authority but was authorized by statute to collect charges from all users of its facilities and services. Pursuant to the statute, the airport authority assessed off-airport car rental companies a fee of 7 percent of sales for rental of cars to customers originating from the airport. The fee was imposed on the companies for the privilege of using airport roadways to operate their shuttle services. Distinguishing taxes and user fees, the court stated:
A tax is compulsory and not optional; it entitles the taxpayer to receive nothing in return, other than the rights of government which are enjoyed by all citizens. . . . On the other hand, a user fee is optional and represents a specific charge for the use of publicly-owned or publicly provided facilities or services.19
Comparing these descriptions to the charge at issue, the court reasoned that a company “must pay a fee to [the airport authority] only if it uses and benefits from the airport facilities which the fee supports.”20 The court rejected an argument that the fee was a tax because it was based on revenue, and the court stated that “[t]o the contrary, the fee charged to
In Jacksonville Port Auth. v. Alamo,23 the court similarly concluded that a charge imposed on an off-airport rental and parking company was “not a tax but an authorized user fee.” The fee was a charge of 6 percent of gross receipts, and the court used reasoning like that in Ace Rent-A-Car v. Airport Authority regarding the respective purposes of taxes and user fees. The court stated that “in assessing and collecting the user fee, the [airport authority was] acting in a proprietary capacity requiring those who benefit from its airports to pay their fair share of costs incurred in providing the benefits,” and that the company “pays the fee only if it uses and benefits from the facilities the fee supports.”24 The court also stated that “the fee is for [the company’s] use of all of the [airport’s] facilities which benefit [the company] by generating its business”; that “[i]f [the company] wished to avoid the fee, it could obtain its customers from another source”; and that the “charge is tied exclusively to [the company’s] use of the airport facilities to conduct its business.”25
In Westrac, Inc. v. Walker Field,26 the court determined that a fee in the amount of 10 percent of gross revenues imposed on a car rental company was not an illegal tax. The court distinguished taxes and user fees, stating that “[r]ates charged for use of a public facility owned by a municipal corporation ordinarily are not considered taxes because their purpose is
The district court in the case before us focused much of its analysis on whether the charge imposed under the Resolution was reasonably proportionate to the benefit the companies receive from using the Commercial Vehicle Lanes and the costs incurred by Airport Authority from that use. The court expressed alarm that Airport Authority witnesses testified that the companies “owe their existence to the presence of Eppley Airfield,” and the court indicated concern that this rationale could allow Airport Authority to impose a charge “without limits.” However, courts in other jurisdictions have determined that the general benefit a user derives from the operation of the entire airport is a relevant consideration when imposing a user fee.
In a portion of Ace Rent-A-Car v. Airport Authority, not specifically related to whether the charge was a tax, the court stated that user fees under the statute could be based on the overall benefit a user derives from the existence of the airport.28 The court reasoned that “the airport’s very existence provides a marketplace from which [the company] derives an economic benefit” and that therefore, “the fees imposed by [the airport authority] are not limited to recoupment of costs related to repair and maintenance of airport roadways.”29 The court stated that “a fee based on a percent of the rental sales of automobiles made to customers originating at the airport represents at least one fair, although imperfect, method of measuring ‘use.’”30
As we have previously mentioned, no single test can or should be used to determine whether a charge is a fee or a tax. Instead, these determinations must be made on a case-by-case consideration. In the matter currently before us, the reasoning in Ace Rent-A-Car v. Airport Authority persuades us that the charge imposed under the Resolution is properly characterized as a user fee and not a tax.34 The fee is optional and not compulsory. Further, the fee represents a specific charge for the use of publicly owned or publicly provided facilities or services. Park ‘N Go must pay the fee to Airport Authority only if it uses and benefits from the airport facilities that the fee supports.
In summary, considering the optional nature of the charge under the Resolution and the circumstances under which the charge was imposed, we determine that the charge was a fee and not a tax. Because we have determined that the charge under the Resolution was not a tax, we conclude that the district court erred when it found that the charge was an unconstitutional tax.
RESOLUTION OF APPEAL
The district court’s error in finding that the charge was an unconstitutional tax requires reversal of the district court’s order, including the declaratory and injunctive relief provided
The claim raised in Park ‘N Go’s complaint and the relief requested therein depended on finding that the charge was an unconstitutional tax. Because the charge is not a tax, there is no relief to be afforded and no other issues to be decided. Therefore, on remand, the district court should dismiss the complaint.
CONCLUSION
We conclude that the district court erred when it found that the charge imposed under the Resolution was an unconstitutional tax. We remand the cause with directions to the district court to dismiss Park ‘N Go’s complaint.
REVERSED AND REMANDED WITH DIRECTIONS.
VAUGHN, J., not participating.