Boise Bowling Center v. State
| Decision Date | 17 November 1969 |
| Docket Number | No. 10271,10271 |
| Citation | 461 P.2d 262,93 Idaho 367 |
| Parties | The BOISE BOWLING CENTER, et al., Plaintiffs-Respondents, v. The STATE of Idaho: and Floyd West, as Tax Collector of the State of Idaho, Defendants-Appellants. |
| Court | Idaho Supreme Court |
Robert M. Robson, Atty. Gen., and Thomas C. Frost, Asst. Atty. Gen., Boise, for defendants-appellants. Eberle & Berlin, Boise, for plaintiffs-respondents.
The sixteen plaintiffs-respondents (fifteen proprietors of bowling alleys and the American Machine & Foundry Co., hereafter referred to as A.M.F., who supplies and leases to these proprietors certain devices used in their respective enterprises), brought suit against the State of Idaho to recover sales taxes paid by the fifteen proprietors (on the equipment leased by them from A.M.F.) which were collected by A.M.F. and then paid to the State.
A.M.F. leases automatic pinsetting devices to each plaintiff-respondent. The rental payment is based on the use (number of lines bowled) made of these pinsetting machines by the respective lesses (owners of the bowling establishments). However there is a minimum rental provided for in the lease regardless of use.
The State Tax Collector determined that the leasing to the pinsetting machinery by A.M.F. to the individual proprietors of the bowling establishments constituted a 'retail sale' within the meaning of I.C. § 63-3609. 1 This statute classifies a sale, lease or rental of personal property which is not held for resale (release or re-rental) as a 'retail sale.'
I.C. § 63-3612(h) 2 defines the term 'sale' as including, 'receipts from the lease or rental of tangible personal property.'
Since an excise tax is imposed on each retail sale at the rate of 3% of the sales price, I.C. § 63-3619, the Tax Collector, pursuant to I.C. § 63-3619(b) required A.M.F., the lessor or seller, to collect a sales tax from each of the fifteen plaintiffs-respondents in proportion to the rental fee paid by each of them.
The trial court in its Conclusion of Law I, determined,
In Conclusion of Law II the court determined,
'That lease payments made by bowling proprietors to American Machine & Foundry Company are not retail sales within the meaning of the Idaho Sales Tax Act, supra.'
The issue presented by this appeal is whether or not the leasing of bowling equipment by its manufacturer to individual proprietors of bowling establishments constitutes a 'taxable sale' within the meaning of the Idaho Sales Tax Act. 3
Applying these definitional statutes heretofore enumerated to the commercial transaction in the case at bar, it is evident that the leasing of the pinsetting equipment by A.M.F. to the individual proprietors of the bowling establishments does in fact constitute a taxable event. The pinsetting equipment, personal property, was leased rather than sold. However, I.C. § 63-3612(h) 4 deems a 'lease' a 'sale' for purposes of the Sales Tax Act. Since it is the purpose of the act to tax 'retail sales,' the question arises: what are the elements constituting 'retail sale?' The statute is quite explicit by stating that:
'The terms 'retail sale' or 'sale at retail' means a sale of tangible personal property for any purpose other than resale of that property in the regular course of business or lease or rental of that property in the regular course of business where such rental or lease is taxable under section 63-3612(h) of this act.' (emphasis supplied)
I.C. § 63-3612(h) defines as a sale, receipts from the lease or rental of tangible personal property.
As the statute clearly indicates a sale or leasing of tangible personal property for any other purpose than resale or releasing that property is a retail sale. Given this information the only question remaining is whether or not the respondent proprietors re-sell or re-lease the equipment originally leased to them. If they do, the transaction between A.M.F. and the owners of the bowling establishments loses the taint of being classified as a 'retail sale' and is not taxable under the act.
We will now analyze the function of the leased automatic pinsetting machines and specifically with respect to whether or not it can fairly be said that these machines are re-rented or re-leased by the proprietors of the bowling establishments to their customers. Operation of a bowling business involves providing the bowling patron with a diverse assortment of services and properties, vix., use of a bowling ball, use of the bowling alley upon which the ball is thrown, use of a score sheet, and use of the automatic pinsetting machine.
It is the combination of these services and properties for which a charge is exacted by the proprietor of the establishment. The bowling patron does not rent the automatic pinsetting device by itself but rather rents or pays a fee for a 'package' or bowling service which is supplied by the proprietor. Could it be said that an individual who patronizes a hotel rents the bed sheets, the carpets, the swimming pool, or any of the other facilities provided by the lodging establishment? The hotel guest pays for and receives a lodging service; such service being composed of various elements, some of a proprietary nature and others in the nature of service. It is this unique combination that distinguishes a hotel from a private residence or restaurant. In the same way a bowling patron, as the hotel guest, pays for and receives a unique combination of goods and services. In Hotels Statler Co., Inc. et al. v. District of Columbia, 92 U.S.App.D.C. 122, 199 F.2d 172 (1952) the court in considering a statute 5 very similar to the Idaho Sales Tax Act reasoned that table linen, bed linen, towels, draperies, and carpets were not to be considered invididual components which when assembled together, constituted 'hotel room,' but rather these various items were to be viewed as properties or goods used in...
To continue reading
Request your trial
-
City of Prescott v. Town of Chino Valley
...Motor Transportation Co. v. Commissioner of Taxation, 292 Minn. 66, 193 N.W.2d 605, 612 (1971). In Boise Bowling Center v. State, 93 Idaho 367, 370, 461 P.2d 262, 265 (1969), the court There is no double taxation when two separate and distinct privileges are being taxed even though the subj......
-
American Totalisator Co., Inc. v. Dubno
...statutes. White Oak Corporation v. Department of Revenue Services, supra, 198 Conn. at 423, 503 A.2d 582; Boise Bowling Center v. State, 93 Idaho 367, 369-70, 461 P.2d 262 (1969); Appeal of AT & T Technologies, Inc., 242 Kan. 554, 749 P.2d 1033, 1038-39 (1988); Southwestern Bell Telephone C......
-
Appeal of AT & T Technologies, Inc.
...paid therefor. See, e.g., Atlanta American Motor Hotel Corp. v. Undercofler, 222 Ga. 295, 149 S.E.2d 691 (1966); Boise Bowling Center v. State, 93 Idaho 367, 461 P.2d 262 (1969); Sta-Ru Corp. v. Mahin, 64 Ill.2d 330, 1 Ill. Dec. 67, 356 N.E.2d 67 (1976); Kentucky Board of Tax Appeals v. Bro......
-
Waterbury Motor Lease, Inc. v. Tax Com'r
...separate transactions, even though a single subject matter is involved, any taint of double taxation is removed. Boise Bowling Center v. State, 93 Idaho 367, 370, 461 P.2d 262; Lakewood Lanes, Inc. v. State, 61 Wash.2d 751, 380 P.2d 466; Gandy v. State, 57 Wash.2d 690, 359 P.2d Prior to the......