Greenwood Gaming & Entm't, Inc. v. Commonwealth

• Decision Date: 30 September 2019
• Docket Number: No. 609 F.R. 2015,609 F.R. 2015
• Court: Pennsylvania Commonwealth Court
• Parties: GREENWOOD GAMING AND ENTERTAINMENT, INC., Petitioner v. COMMONWEALTH of Pennsylvania, Respondent

218 A.3d 982

GREENWOOD GAMING AND ENTERTAINMENT, INC., Petitioner

v.COMMONWEALTH of Pennsylvania, Respondent

No. 609 F.R. 2015

Commonwealth Court of Pennsylvania.

Submitted on Briefs April 10, 2019

Decided September 30, 2019

Mark S. Stewart, Harrisburg, for Petitioner.

Matthew S. Salkowski, Deputy Attorney General, Harrisburg, for Respondent.

BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge, HONORABLE ROBERT SIMPSON, Judge¹ , HONORABLE P. KEVIN BROBSON, Judge, HONORABLE PATRICIA A. McCULLOUGH, Judge, HONORABLE ANNE E. COVEY, Judge, HONORABLE MICHAEL H. WOJCIK, Judge, HONORABLE ELLEN CEISLER, Judge

OPINION BY JUDGE BROBSON²

Greenwood Gaming and Entertainment, Inc. (Taxpayer) has filed exceptions³ to the September 6, 2018 Memorandum Opinion and Order of this Court,⁴ which granted Respondent Commonwealth of Pennsylvania's (Commonwealth) application for summary relief and affirmed the order of the Board of Finance and Revenue (F&R) that denied Taxpayer's petition for refund of $1,122,654.89 in taxes paid based on gross terminal revenue during the period of January 1, 2009, through January 4, 2011 (Tax Period). "In tax appeals from [F&R], this Court functions as a trial court, and exceptions filed pursuant to Pa. R.A.P. 1571(i) have the effect of an order granting reconsideration." Consol. Rail Corp. v. Cmwlth. , 679 A.2d 303, 304 (Pa. Cmwlth. 1996) (en banc), aff'd , 547 Pa. 453, 691 A.2d 456 (1997).

In its Petition for Review, Taxpayer challenges F&R's determination, which denied Taxpayer's petition for refund for lack of subject matter jurisdiction and relied upon Section 3003.1(a) of the Tax Reform Code of 1971 (Code).⁵ Section 3003.1(a) of the Code provides:

For a tax collected by the Department of Revenue [ (Department) ], a taxpayer who has actually paid tax, interest or penalty to the Commonwealth or to an agent or licensee of the Commonwealth authorized to collect taxes may petition the Department ... for refund or credit of the tax, interest or penalty . Except as otherwise provided by statute, a petition for refund must be made to the [D]epartment within three years of actual payment of the tax, interest or penalty.

(Emphasis added.) This Court frequently reviews matters that require application of a statute to particular facts and circumstances. We did that in reviewing this matter initially. As reflected in the Court's Memorandum Opinion, we sided with the Commonwealth's position and held that Taxpayer's petition for refund was untimely. Taxpayer's exceptions once again provide us the opportunity to review the question of whether F&R erred in applying the three-year statute of repose in the Code⁶ to Taxpayer's petition. To aid our review, we requested supplemental briefs from the parties, limited to the question of whether, as a matter of statutory construction , the three-year statute of repose in Section 3003.1(a) of the Code⁷ applies to Taxpayer's petition for refund in this case, which sought only a credit against future tax liability. No court should ever apply a statute that, by its terms, plainly does not apply under the circumstances simply because the parties invite us to do so. See Estate of Sanford v. Comm'r of Internal Revenue , 308 U.S. 39, 51, 60 S.Ct. 51, 84 L.Ed. 20 (1939) ("We are not bound to accept, as controlling, stipulations as to questions of law.").

To determine whether Section 3003.1(a) of the Code bars Taxpayer's petition for refund in the nature of an adjustment/credit pursuant to 61 Pa. Code § 1008.1(c)(5), this Court is guided by the Statutory Construction Act of 1972, 1 Pa. C.S. §§ 1501 - 1991, which provides that "[t]he object of all interpretation and construction of statutes is to ascertain and effectuate the intention of the General Assembly." 1 Pa. C.S. § 1921(a). "The clearest indication of legislative intent is generally the plain language of a statute." Walker v. Eleby , 577 Pa. 104, 842 A.2d 389, 400 (2004). "When the words of a statute are clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit." 1 Pa. C.S. § 1921(b). It is presumed "[t]hat the General Assembly intends the entire statute to be effective and certain." 1 Pa. C.S. § 1922(2). Thus, no provision of a statute shall be "reduced to mere surplusage." Walker , 842 A.2d at 400.

Moreover, "[e]very statute shall be construed, if possible, to give effect to all its provisions." 1 Pa. C.S. § 1921(a). We, therefore, must be careful not to interpret sections of a statute in a vacuum. Iacurci v. Cty. of Allegheny , 115 A.3d 913, 916 (Pa. Cmwlth. 2015). As the Pennsylvania Supreme Court has explained:

When interpreting a statute, courts should read the sections of a statute together and construe them to give effect to all of the statute's provisions. In giving effect to the words of the legislature, we should not interpret statutory words in isolation, but must read them with reference to the context in which they appear.

Roethlein v. Portnoff Law Assocs., Ltd. , 623 Pa. 1, 81 A.3d 816, 822 (2013) (citation omitted).

In our June 10, 2019 Memorandum Opinion and Order requesting supplemental briefing from the parties, we raised the question of whether the reference to a petition for "refund or credit" in the first sentence of Section 3003.1(a) of the Code but a subsequent reference only to a "petition for refund" in the statute of repose language should be interpreted to mean that the statute of repose applies only when a party is petitioning for a refund of taxes and not for a credit. The Pennsylvania Supreme Court came close to answering this question once. In Mission Funding Alpha v. Commonwealth , 643 Pa. 432, 173 A.3d 748 (2017), the Supreme Court analyzed the three-year statute of repose in Section 3003.1(a) of the Code for purposes of determining when the period begins to run. In that case, the taxpayer filed a petition for refund with the Board on September 16, 2011, seeking an actual refund of its 2007 franchise tax liability in the amount of $66,344. The Supreme Court held the "actual payment of the tax," which triggers the running of the three-year statute of repose to seek a refund, is the point at which the taxpayer transfers money or credits to the Department and the Department accepts the same in satisfaction of the taxpayer's tax liability. Mission Funding , 173 A.3d at 763. Applying this interpretation, the Supreme Court determined that the taxpayer actually paid its tax liability on April 15, 2008, when the tax was due and payable and when the Department accepted the taxpayer's estimated tax payments and credits in satisfaction of the taxpayer's 2007 tax obligation. Id. at 759-60, 763. Accordingly, the taxpayer's refund petition, filed in September 2011, was late.

In a footnote to its opinion, the Supreme Court noted that the taxpayer raised an alternative argument, that being that the Supreme Court should treat the taxpayer's petition for refund as a petition for credit . In the taxpayer's view, the three-year statute of repose in Section 3003.1(a) of the Code did not apply to a petition for credit. Id. at 763, n.14. According to the Supreme Court's opinion, the taxpayer in Mission Funding only ever sought a refund in the case and never a credit. Id. Moreover, the taxpayer never advanced an alternative argument that it was seeking a "petition for credit" before the Board, F&R, or this Court. Id. The Supreme Court, therefore, refused to address this argument, considering it waived. Id.

Here, unlike the taxpayer in Mission Funding , Taxpayer has only ever sought a credit (as opposed to an immediate refund) against future tax liability as a remedy for the alleged overpayment of taxes. In its supplemental brief, Taxpayer argues why it believes that the statute of repose language in Section 3003.1(a) of the Code, which refers only to a petition for refund , should not apply in instances where the petitioning taxpayer seeks a credit and not a refund. In its supplemental brief, the Commonwealth argues, by reference to other provisions of the Code, that the reference to "petition for refund" in the statute of repose should be read to encompass petitions that seek either a refund or credit with respect to overpaid taxes. Of the two, the Commonwealth presents the more compelling argument.

As noted above, legislative intent controls in matters of statutory construction. The first sentence of Section 3003.1(a) of the Code authorizes a taxpayer to petition the Department for either a refund or credit with respect to any tax that the Department collects. The second sentence provides the statute of repose, requiring that "a petition for refund" must be submitted to the Department within three years of the actual payment of the tax. At first blush, the use of the word refund in isolation suggests that the statute of repose does not apply when the taxpayer petitions for a credit. Indeed, there is some authority from our Supreme Court to support the view that, from a relief perspective, tax credits and tax refunds are not the same. See City of Phila. v. City of Phila. Tax Review Bd. ex rel. Keystone Health Plan E., Inc. , 635 Pa. 108, 132 A.3d 946, 953-54 (2015) ("Applying these same principles to credits, we hold the Commonwealth Court did not err in affirming the Review Board's award of credits to [the t]axpayers. Ambiguity here is found only if credits and refunds are the same thing, and whatever their similarities, they are not. ‘Store credit’ is not the same as ‘your money back.’ The pertinent provisions [of The Philadelphia Code] discuss terms of ‘credits’ and ‘refunds’ distinctly.").

Upon further consideration, however, such a construction of the statute of repose provision would be contrary to the General Assembly's intent. The question is not whether a "credit" and a "refund" are synonymous; rather, we need only decide whether a "petition for refund," as that phrase is used in Section 3003.1 of the Code,⁸ is the filing by which a taxpayer may...