OPINION
If thе taxpayer is the prevailing party in a contested tax case between the taxpayer and the Commissioner of Revenue, the taxpayer is entitled to costs and disbursements if the taxpayer shows thаt the position of the commissioner was not substantially justified. See Minn.Stat. § 15.472 (2004); Minn.Stat. § 271.19 (2004). This acrimonious tax case, involving issues that we have addressed in two previous opinions—Wilson v. Comm’r of Revenue (Wilson I),
I.
We begin with a brief history of this litigation between the taxpayer, relator James L. Wilson, and the commissioner.
Jay R. Hanson III worked as an indepеndent contractor providing janitorial services at the Apple Valley Oldsmobile car dealership. Due to Hanson’s substantial sales and income tax liabilities, on May 12, 1994, the commissioner revoked Hansоn’s sales tax permit and served notice of levy on the dealership, requiring it to pay all of Hanson’s wages to the commissioner. Hanson then retained Wilson, who devised a new arrangement for Hanson in which Hanson was hired by Wilson’s company, Hazardous Waste Controls of Blooming-ton, Inc. (“HWC”), which in turn contracted with the dealership to provide janitorial services. This arrangement did not require Hanson to have a salеs tax permit and reduced the amount the commissioner was able to garnish from Hanson’s wages from 100% to 25%.
On September 12, 1994, after learning that Hanson was working at the dealership as an employee of HWC, the commissioner served a notice of levy on HWC requiring it to withhold and remit to the commissioner 25% of Hanson’s wages and to complete a disclosure form and return it to the commissioner by September 22, 1994. HWC failed to сomply with this request, and after a warning from the commissioner and continued noncompliance, the commissioner entered an order on November 3, 1994, which concluded that HWC had willfully failed to follow the wagе-levy notice. As a result, the commissioner assessed HWC with liability not just for the wage levy, but for the entire amount of Hanson’s delinquent taxes, plus interest,
HWC appealed tо the tax court from the commissioner’s November 3 order. Hazardous Waste Controls of Bloomington, Inc. v. Comm’r of Revenue (Hazardous Waste), No. 6589,
Wilson then appealed to the tax court from the November 4 order assessing liability against him personally. Id. In doing so, he attempted to contest various issues already decided in Hazardous Waste, and again argued that the assessment constituted an excessive fine. Wilson v. Comm’r of Revenue, No. 6918,
On appeal to this court, we concluded that res judicata did not bar Wilson from raising the excessive-fine issue. Wilson I,
On remand, the tax court concluded that the commissioner’s personal assessment against Wilson was not an excessive fíne undеr the United States and Minnesota Constitutions. Wilson v. Comm’r of Revenue, No. 6918,
On July 27, 2004, the parties came to a settlement agreement that Wilson and HWC owed no further sums and the commissioner owed no refund, neither party admitting the substantive legal issues in the case. In the settlement agreement, Wilson expressly reserved the right to request attorney fees and costs.
On August 27, 2004, Wilson filed a motion for costs and disbursements, including reasonable attorney fees, under Minn.Stat. § 271.19, which allows for costs and fees to be awarded against the state in a tax court proceeding in accordance with Minn.Stat. § 15.472(a), which provides:
If a prevailing party other than the state, in a civil action or cоntested case proceeding other than a tort action, brought by or against the state, shows that the position of the state was not substantially justified, the court or administrative law judge shall award fees and оther expenses to the party unless special circumstances make an award unjust.
After briefing by both sides, the tax court denied Wilson’s motion, concluding that it could not determine that Wilson was the prevailing party. According to the tax court order, “[t]he settlement agreement is clear that the parties are simply walking away from a long and arduous case,” and “neither party appears to have succeeded in the matter overall.” From this order, Wilson appeals to this court.
II.
We will only overturn an award or denial of fees and costs by a tax court if the tax court has abused its discretion. Benigni v. County of St. Louis,
We have explained that “[t]he prevailing party in any action is one in whose favor thе decision or verdict is rendered and judgment entered.” Borchert v. Ma-loney,
As the tax court determined, “both parties succeeded in some aspects of the litigation.” Wilson succeeded to the extent that: (1) in Wilson I we overturned the tax court’s determination that his excessive-fine claim was barred by res judicata; (2) in Wilson II we overturned the tax court’s determination that his penalty was not, in fact, an excessive fine; and (3) the
In a situation highly similar to this, we have determined that the tax court did not abuse its discretion by not naming a prevailing party. Benigni,
This case has a similarly mixed result. Wilson suсceeded in getting his liability substantially reduced in dollar amount, but the commissioner succeeded in upholding the assessment of personal liability against Wilson. The tax court’s conclusion that “neither party appears to have succeeded in the matter overall” is an accurate characterization of the outcome of this case. We conclude that the tax court did not abuse its discretion by dеnying Wilson’s claim that he was the prevailing party entitled to costs and attorney fees.
Affirmed.
Notes
. The portion of the statute allowing the commissioner to assess HWC for the entire amount of Hanson’s delinquent taxes has since been repealed. Act of June 1, 1995, ch. 264, art. 13, § 13, 1995 Minn. Laws 2872, 3055-56.
. HWC needed to рerform the "Erie Shuffle” to vest the tax court with constitutional-claim jurisdiction. Wilson I,
The tax court has limited jurisdiction and no original jurisdiction to hear constitutional matters. * * * In Erie Mining Co., this court approved of a process whеreby a tax court could gain jurisdiction over constitutional matters even if a case originated in tax court. If the tax court stays proceedings and refers the case to the district court for determinаtion of the constitutional issue, and if after declining to make a constitutional determination the district court refers the case back to the tax court, the tax court may then exercise jurisdiction ovеr the constitutional issue.
Id. (internal citations omitted).
.The tax court held that Wilson was estopped from relitigating the following issues that had already been decided against him in Hazardous Waste:
Whether HWC received actual notice of the Levy;
Whether HWC willfully failed to withhold and remit taxes from its employee’s wages;
Whether HWC is liable for its failure to withhold and remit; and
Whether the amount of HWC’s liability is the amount of its employee’s delinquent taxes, $45,352.55, adjusted for any amounts paid on account.
Wilson,1999 WL 285896 at *2 (bullets added).
. We do not reach the question of whether the commissioner’s position in this litigation was "not substantially justified” under Minn.Stat. § 15.472. However, we express doubt that Wilson could establish this requirement given that the commissioner's pursuit of the original assessment amount, though eventually deemed an excessive fine by this court, was in compliance with the commissioner's statutory duty to enforce existing tax laws. See Minn. Stat. § 270.06 (2004).