Bercier v. Kiga
| Decision Date | 21 December 2004 |
| Docket Number | No. 31052-0-II.,31052-0-II. |
| Citation | 103 P.3d 232,127 Wash. App. 809,127 Wn. App. 809 |
| Court | Washington Court of Appeals |
| Parties | Alex J. BERCIER, Appellant, v. Fred KIGA, Director, Department of Revenue, State of Washington, Gary Gilbert, Chief of Enforcement and Education, Washington State Liquor Control Board, the Washington State Department of Revenue, the Washington State Liquor Control Board, and the State of Washington, Respondent. |
David M. Hankins, Attorney Generals Office/Revenue Div, Heidi A. Irvin, Attorney Generals Office/Revenue Div, Olympia, WA, for Respondent.
Robert Eugene Kovacevich, Kovacevich Law Office, Spokane, WA, for Appellant.
Alex Bercier appeals the trial court's dismissal of his declaratory judgment action. He argues he should be exempt from all Washington excise taxes and regulations because, as a member of the Fort Peck Indian Tribe who resides and sells tobacco products on the Puyallup Indian reservation, he is an Indian doing business on Indian trust land, entitled to exemptions under RCW 82.24.260, 82.24.900, and 82.26.040. Holding that Bercier is not entitled to a tax exemption because he is not enrolled in the Puyallup Tribe on whose land he is doing business, we affirm.
Alex Bercier is an American Indian, enrolled in the Fort Peck Indian Tribe in Montana.1 He sells tobacco products at a smokeshop on the Puyallup Tribe reservation, where he is not a tribal member.2
In Thurston Count Superior Court, Bercier filed a "COMPLAINT FOR DECLARATORY JUDGMENT AND INJUNCTION PROHIBITING STATE TAXATION OF AMERICAN INDIANS DOING BUSINESS ON PUYALLUP RESERVATION; FOR RELIEF FROM REGISTRATION AND TAXATION BY THE STATE; TO INVALIDATE WAC 458-20-192 AND FOR CIVIL RIGHTS DAMAGES." Clerk's Papers (CP) at 5-26. He alleged that because he is an Indian licensed to do business on an Indian reservation, he should be exempt from Washington State excise taxes and related regulations. He also sought to enjoin the Puyallup Tribe from entering into an agreement with the State of Washington that could result in taxing his sales on the reservation.
Bercier further claimed that the State is discriminating against Indian smokeshops by granting a more favorable tax status to military concession cigarette sales, which are not subject to the state tax. Finally, Bercier's complaint appeared to assert three state-law claims for damages (violation of RCW 49.60, invasion of privacy, and damage to personal property) and possibly a federal-law claim for damages under 42 U.S.C. § 1983.
The State3 moved to dismiss Bercier's action for lack of jurisdiction and for a CR 12(b)(6) failure to state a claim for which relief could be granted. In response, Bercier filed a first amended complaint and memorandum in opposition, indicating that he was dropping his claims for damages and his claim against Gary Gilbert related to Gilbert's official capacity only. Bercier also filed a motion to compel discovery from the State.
The trial court granted the State's CR 12(b)(6) motion to dismiss the majority of Bercier's claims, but it declined to dismiss one claim — that the State was violating a 1981 declaratory judgment exempting certain tribes from the requirement that they keep other tobacco product ("OTP") tax records. The trial court denied Bercier's motion to compel discovery. Later, on the State's motion for reconsideration, the trial court dismissed Bercier's remaining claim, resulting in dismissal of Bercier's complaint in its entirety. Thereafter, it denied Bercier's motion for reconsideration.
Bercier appeals.
We review dismissal of a claim under CR 12(b)(6) de novo. Reid v. Pierce County, 136 Wash.2d 195, 200-01, 961 P.2d 333 (1998). In reviewing a dismissal for failure to state a claim, we accept as true allegations in plaintiff's complaint and any reasonable inferences therefrom. Reid, 136 Wash.2d at 201, 961 P.2d 333. Dismissal is appropriate only if the complaint alleges no facts that would justify recovery. Reid, 136 Wash.2d at 200-01, 961 P.2d 333.
This case presents the following issues.
We address each issue in turn.
Bercier's central argument is that he is entitled to exemption from Washington State's tobacco taxes because he is an Indian and he operates a smokeshop on Indian land. The relevant law, however, provides such tax exemption only for Indians who are members of the tribe on whose land they are operating. Bercier is enrolled in the Fort Peck Tribe and he is doing business on Puyallup tribal land. Therefore, he does not qualify for the State tobacco tax exemption.
Construction of a statute is a question of law, which we review de novo under the error of law standard.4 Review begins with the plain language of the statute.5 If a statute is unambiguous, we determine legislative intent from the language of the statute alone.6 Similarly, if a regulation is clear and unambiguous, we apply its plain language.7 Generally, however, we give "substantial weight... to the agency's view of the law if it falls within the agency's expertise in that special field of law."8
The State of Washington imposes an excise tax on cigarettes sold, used, consumed, handled, possessed, or distributed within Washington. RCW 82.24.020, 82.24.027(1), 82.24.028. The State collects this tax through cigarette stamps. RCW 82.24.030. The State requires wholesalers and certain retailers to keep detailed records of the purchase and sale of cigarettes. RCW 82.24.090.
The State of Washington also taxes the sale, use, consumption, handling, or distribution of all other tobacco products (OTP) by taxing the distributor. RCW 82.26.020, 82.26.030. As with the cigarette tax, OTP distributors must keep records of their activities. RCW 82.26.060-.070.
Federal law, 4 U.S.C. §§ 105-06, generally authorizes States to levy and to collect sales or use taxes from people in federal areas. Washington State's cigarette tax and OTP tax do not apply, however, when the federal or state constitutions or federal statutes prohibit the tax. RCW 82.24.900, RCW 82.26.040. 4 U.S.C. § 109 specifically exempts Indians from state taxation: "Nothing in sections 105 and 106 of this title shall be deemed to authorize the levy or collection of any tax on or from any Indian not otherwise taxed." Thus, State tobacco and OTP taxes do not apply to Indians.
Washington provides additional statutory cigarette tax exemptions for Indian and military personnel. RCW 82.24.260(1), for example, exempts:
(Emphasis added).9 RCW 82.24.010(3) defines an "Indian tribal organization" as follows:
"Indian tribal organization" means a federally recognized Indian tribe, or tribal entity, and includes an Indian wholesaler or retailer that is owned by an Indian who is an enrolled tribal member conducting business under tribal license or similar tribal approval within Indian country.
These statutes clearly exempt "Indians" and "Indian tribal organizations" from State cigarette and OTP taxes. But the statutes do not specify whether a nonmember Indian operating on tribal land qualifies for these exemptions.
The State Department of Revenue (Department) has specifically addressed this issue under the Legislature's grant of authority to "prescribe forms and rules of procedure for the determination of the taxable status of any person." RCW 82.32.300. The Department promulgated WAC 458-20-192 to address State taxation of Indians. WAC 458-20-192(5) recognizes the general principle that the State may not tax Indians or Indian tribes in Indian country. WAC 458-20-192(5) defines the term "Indian" for State taxation purposes: "For the purposes of this rule, the term `Indian' includes only those persons who are enrolled with the tribe upon whose territory the activity takes place and does not include Indians who are members of other tribes."10 WAC 458-20-192(5).
This rule unambiguously excludes nonmember Indians from State tax exemption. In other words, nonmember Indians are subject to the State cigarette and tobacco taxes. See WAC 458-20-192(5).11 Because the rule's plain meaning is clear, we need not look further to determine its meaning. And because Bercier is not enrolled in the Puyallup Tribe, on whose territory he sells cigarettes and tobacco products, he does not qualify for State tax exemption under WAC 458-20-192(5).12
In Wash. v. Confederated Tribes of the Colville Indian Reservation, several Indian tribes challenged Washington's imposition of cigarette tax and sales tax on purchases made by non-Indians and Indians who were not members of the tribe on whose reservation the sales took place. 447 U.S. 134, 139, 100 S.Ct. 2069, 65 L.Ed.2d 10 (1980). Pre-dating Lara,13 the Court upheld Washington's recordkeeping requirements and cigarette and sales taxes for non-tribal members' on-reservation purchases. Confederated Tribes of Colville, 447 U.S. at 150-61, 100 S.Ct. 2069. The Court ruled:
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