RENT-A-CENTER WEST, INC., Pеtitioner, v. UTAH STATE TAX COMMISSION, Respondent.
No. 20140129
Supreme Court of Utah.
Jan. 5, 2016.
2016 UT 1
¶ 29 To demonstrate this point, we usе an example of a grandfather charged with sexually molesting a granddaughter and who had previously sexually molested his daughters in the same manner when they were the same age as the granddaughter. The opportunity for the grandfather to perpetuate abuse in a similar familial relationship and аge context would not arise until twenty or thirty years after his initial abuse of the daughters. If the prosecution were not allowed to bring in evidence of the prior abuse simply because of the long period of time between the incidents, then rule 404(c) would have no purpose in this all-too-frequent contеxt.10 We will not obstruct the prosecution from introducing such intergenerational abuse evidence on this basis.
¶ 30 In conclusion, the district court‘s misapplication of the above factors was unreasonable and we reverse.
CONCLUSION
¶ 31 The district court‘s exclusive reliance on the Shickles factors reprеsents an application of the wrong legal standard and thus is reversible error. The court‘s rigid application of the Shickles factors represents the same concern we had in Lucero over courts not heeding the actual language of rule 403. In addition, the district court‘s misapplication, in thе context of rule 403, of (1) the similarities between the past sexual abuse that Cuttler inflicted on J.C. and W.C. and the current allegations of his sexual abuse of K.C., (2) the use of the evidence given its propensity purpose, (3) the potential prejudice from the nature of the evidence, and (4) the time gap betwеen the acts of abuse was unreasonable. Therefore, we reverse the district court‘s ruling and hold that the evidence of Cuttler‘s past child molestation conviction was admissible under rule 403.
Sean D. Reyes, Att‘y Gen., Gale K. Francis, Asst. Att‘y Gen., Salt Lake City, for respоndent.
Justice DURHAM authored the opinion of the Court, in which Chief Justice DURRANT, Associate Chief Justice LEE, and Justice HIMONAS joined: Due to her resignation from this court, Justice PARRISH did not participate herein.
Justice DURHAM, opinion of the Court:
INTRODUCTION
¶ 1 Rent-A-Center West, Inc. appeals the Utah State Tax Commission‘s decision declaring Rent-A-Center‘s optional liability waivеr fee subject to Utah sales and use tax. We reverse.
BACKGROUND
¶ 2 Rent-A-Center leases and sells a variety of consumer goods, ranging from smartphones and televisions to couches and washing machines. Rent-A-Center leases its products through rental agreements describing the property, the payment amount, аnd the number of payments. Customers may choose to make payments weekly, semimonthly, or monthly.
¶ 3 Customers acquire ownership of the product once they have paid the full value of the property. Until the final payment is made, Rent-A-Center retains ownership.
¶ 5 Participation in the liability waiver program does not affect the amount owed for the rental payments. Both the rental payment and the liability waiver fee are due to Rent-A-Center at the same time. On the customers’ receipts, Rent-A-Center separately itemizes the amount paid for the rental payment and the amount paid for the liability waiver fee. Customers may cancel the liability wаiver payment at any time without any effect on the rental or the rental payment. Additionally, Rent-A-Center offers an early purchase program wherein the customer may make a lump-sum payment ahead of scheduled, and this option does not require payment of the liability waiver fee.
¶ 6 Rent-A-Center charges sales tax on the rental payment but not on the liability waiver fee. The Utah State Tax Commission conducted an audit of Rent-A-Center for 2007-2009 and discovered this practice. On March 28, 2010, the Commission issued a statutory notice to Rent-A-Center, imposing taxes and interest on the amounts Rent-A-Center chаrged for the liability waiver fee, totaling $147,864.35.
¶ 7 Rent-A-Center contested the audit results in a formal hearing before the Commission. The Commission found the liability waiver fee taxable because (1)
¶ 8 Rent-A-Center appealed. We have jurisdiction to review the Commission‘s decision under
STANDARD OF REVIEW
¶ 9 This court‘s review of the Commission‘s decision is governed by
ANALYSIS
I. THE LIABILITY WAIVER FEE IS NOT SUBJECT TO SALES AND USE TAX UNDER THE PLAIN TEXT OF THE UTAH TAX CODE
¶ 10 The issue we are asked to decide is straightforward: is Rent-A-Center‘s liability waiver fee subject to sales and use tax under the Utah Tax Code? The relevant portion of the statute is
¶ 11 The Commission argues that the statute, in conjunction with its own administrative regulation, unambiguously requires taxa-
¶ 12 We examine first the import of “paid for” in the statutory language of “amounts paid ... for leases or rentals of tangible personal property.” We conclude that the liability waiver fee is not contemplated by that language. Second, we examine whethеr the Commission‘s administrative regulation is in harmony with the statute and determine that it impermissibly broadens the statutory coverage and is therefore invalid.
A. The Liability Waiver Fee Is Not an Amount “Paid for” the Lease or Rental of Tangible Personal Property Because It Does Not Affect the Possession, Use, or Opеration of the Rental Property
¶ 13 When we interpret a statute, “our primary goal is to evince the true intent and purpose of the Legislature.” Marion Energy, Inc. v. KFJ Ranch P‘ship, 2011 UT 50, ¶ 14, 267 P.3d 863 (citation omitted). The best indication of the legislature‘s intent is the plain and ordinary meaning of the statute‘s terms. Anadarko Petroleum Corp. v. Utah State Tax Comm‘n, 2015 UT 25, ¶ 24, 345 P.3d 648.
¶ 14
¶ 15 “In determining the ordinary meaning of nontechnical terms of a statute, our ‘starting point’ is the dictionary” because it “is useful in cataloging a range of possible meanings that a statutory term may bear.” State v. Canton, 2013 UT 44, ¶ 13, 308 P.3d 517 (citation omitted). It is merely a starting point, however, because these possible definitions “will often fail to dictate ‘what meaning a word must bear in a particular context.‘” Hi-Country Prop. Rights Grp. v. Emmer, 2013 UT 33, ¶ 19, 304 P.3d 851 (citation omitted). Where this is the case, we must identify the meaning of the statutory language “based on other indicаtors of meaning evident in the ‘context of the statute (including, particularly, the structure and language of the statutory scheme).‘” Id. (citation omitted).
¶ 16 The Oxford English Dictionary defines “pay for” in quid pro quo terms—as giving “money or other equivalent for goods or services.” OXFORD ENGLISH DICTIONARY, www.oed.com (last visited Dec. 29, 2015). This definition indicates that it is not enough for a payment to merely “concern” a good or service; it must go to the purpose or aim of the transaction. We conclude that the essence of the transaction is the exchange of money for the right to possess, use, or operate the product that is the subject of the rental. Cf.
¶ 17 This interpretation is consistent with another subsection of section 103 that taxes “amounts paid or charged for services for rеpairs or renovations of tangible personal property.”
¶ 18 The Commission focused on six factual findings in rendering its decision. Supra ¶ 11. Although the findings show a connection between the rental payments and the liability waiver fee—the liability waiver provision is signed at the same time as the rental agreement, payments are made on the same schedule, etc.—none of these findings illustrate why this fee is paid fоr the rental
¶ 19 The Commission argues that other states tax liability waivers or similar fees. But those states have statutes with language much broader than Utah‘s. Louisiana, for example, taxes “the gross proceeds derived from the lease or rental of tangible personal property.”
¶ 20 The plain language of Utah‘s statute does not tax amounts “derived from” the rental of tangible personal property, nor does it specifically include “services, for which tangible personal property” is leased. Our statute taxes only amounts paid “for” the lease or rental of tangible рersonal property. Because the liability waiver fee does not affect the possession, use, or operation of the rental property, it is not subject to taxation under the plain language of
B. The Regulation‘s Use of “in Connection with” Impermissibly Broadens the Statute
¶ 21 We next determine whеther the Commission‘s regulation is consistent with
the authorizing statute. The administrative code implementing subsection 103(1)(k) requires a lessor to “compute sales or use tax on all amounts received or charged in connection with a lease or rental of tangible personal property,”
¶ 22 This regulation represents the Commission‘s interpretation of the Code, and that interpretation must harmonize with the text of the statute. Airport Hilton Ventures, Ltd. v. Utah State Tax Comm‘n, 1999 UT 26, ¶ 6, 976 P.2d 1197. “[W]e will uphold the Commissiоn‘s rule only if, inter alia, it does not ‘confer greater rights or disabilities’ than the underlying statute.” Id. ¶ 8 (citation omitted). Although we may defer to agency fact finding or discretionary decision making, we decide this case solely on pure questions of law and our review is therefore de novo. Hughes Gen. Contractors, Inc. v. Utah Labor Comm‘n, 2014 UT 3, ¶ 25 n. 4, 322 P.3d 712.
¶ 23 We conclude that the administrative regulation impermissibly broadens the language of the statute.3 “In connection with” encompasses a wide variety of products and services that may be associated with the rental without actually being “for” the rental. While the liability waiver fee might well be included under the Commission‘s expansive interpretation, it is not paid “for” the purchase of tangible personal property and therefore is not subject to sales and use tax under the statute. As we have determined, while the liability waiver fee may be “derived from,” “associated with,” “related to,” or paid “in connection with” the rental of tangible personal property, it does not affect the use, possession, or operation of tangible personal property and therefore does not fall under the plain language of the statute.
¶ 24 Because we conclude that Rent-A-Center‘s liability waiver fee is not “paid or charged for leases or rentals of tangible personal property,” we reverse the Commission‘s decision.