Economy Oil Corp. v. Indiana Dept. of State Revenue, No. 1--574A80

Docket NºNo. 1--574A80
Citation162 Ind.App. 658, 321 N.E.2d 215
Case DateDecember 30, 1974

Page 215

321 N.E.2d 215
162 Ind.App. 658
ECONOMY OIL CORPORATION, Plaintiff-Appellee,
v.
INDIANA DEPARTMENT OF STATE REVENUE, Defendant-Appellant.
No. 1--574A80.
Court of Appeals of Indiana, First District.
Dec. 30, 1974.
Rehearing Denied Feb. 11, 1975.

[162 Ind.App. 660]

Page 216

Theodore L. Sendak, Atty. Gen., John H. Meyers, Deputy Atty. Gen., Indianapolis, for defendant-appellant.

Robert L. Sheaffer, Sheaffer & Yeager, Shelbyville, for plaintiff-appellee.

ROBERTSON, Presiding Judge.

The defendant-appellant (Department) is appealing a judgment allowing the plaintiff-appellee (Economy) to recover payments assessed for unreported tax liability. The two issues raised in the appeal are: 1

[162 Ind.App. 661] 1. Whether the Motor Fuel Tax Law levies the exclusive excise tax on the sales of motor fuel, and

Page 217

2. Whether Economy's business records were sufficient to establish the amount of its' exempt sales.

We reverse as to the first issue and affirm as to the latter.

The facts pertinent to the appeal are that Economy is a petroleum distributor which operates four service stations as well as tank wagons in east central Indiana. During 1968, 1969, and 1970 some of Economy's sales were to farmers, hospitals, and school bus drivers who had filed either single purchase or blanket sales tax exemption certificates with Economy. 2 Economy kept these on file in its office but did not make a list of exemption certificate holders for their employees' use. The employees, either by memory or the purchaser's word, determined whether sales taxes would be collected. The exemption certificates covered both cash and credit sales at the service stations and from the tank wagon.

At three of the four service stations exempt cash sales were recorded on a clip board. This daily tab would show the total exempt cash sales which then could be deducted from total cash sales to obtain the total amount of nonexempt cash sales. The other station used a similar method of recording exempted sales on a cash register tape.

Total nonexempt cash sales from all locations were posted daily to the cash book as the permanent record of net tax liability, however, the individual exempt cash sales were not posted to ledger cards.

The daily tabs, which did not identify the individual purchasers, were retained for a short period after posting and then disposed of.

[162 Ind.App. 662] Cash sales from the tank wagon were recorded on individual sales slips showing the number of gallons delivered, but not the dollar amount of the sale. Like service station exempt cash sales, the tank wagon cash sales were not posted to ledger cards.

The Department audited Economy for the years 1968 through 1970 and ultimately assessed them for unreported tax liability on two types of sales. One was the service station cash sales, treated by Economy as tax exempt, without sufficient 'source' or 'proof' documents. The other was cash and credit sales with exemption certificates lacking Retail Merchant, Social Security, or Public Service Commission of Indiana numbers.

Economy filed suit against the Department for recovery of payments assessed against them and eventually obtained the judgment from which this appeal arises.

Economy took the position that the sales tax did not apply to motor fuel sales during the audit period. The basis for the argument rests, in part, in the Motor Fuel Tax Act of 1943, IC 1971, 6--6--1--31 (Burns Code Ed.). The substance of that section is that the motor fuel tax is in lieu of any excise, privilege, or occupational tax on manufacturing, distributing, or selling motor fuel. The act also prohibits governmental subdivisions from collecting or levying taxes on motor fuel.

Additionally, Economy continues, the State Gross Retail Tax Act of 1963 did not specifically mention motor fuel, although a 1973 act, IC 1971, 6--2--1--38(p) (Burns Code Ed. Supp.1974) states that a sales tax shall be collected on the full amount of the motor fuel sales price. The 1973 enactment demonstrates, it is argued, an intent to omit sales tax on motor fuel in the 1963 sales tax statutes.

Furthermore, the 1963 sales tax act is general in nature which requires the more specific 1943 Motor Fuel Tax Act to prevail in its language, so argues Economy.

The Department responds that all of a retail merchant's transactions which constitute selling at retail are taxable [162 Ind.App. 663] unless specifically

Page 218

exempted or excluded. 3 Moreover, the Department stresses its continuous policy of collecting sales tax on motor fuel retail sales since 1963. That fact, it is argued, should be given considerable weight by this court in construing the pertinent statutes. It is finally argued that there is no constitutional limitation on the number of excise taxes which may be imposed by the General Assembly.

For the reasons stated hereafter we hold that the trial court erred, as a matter of law, in its holding that the 'Legislature did not intend to include motor fuel in the (Gross) Retail Sales Act of 1963'.

When construing a statute, this Court is bound by several familiar rules of statutory construction, I.C. 1971, 1--1--4--1, Ind.Ann.Stat. § 1--201 (Burns 1967); I.L.E. Statutes §§ 101--195. The bedrock rule of statutory construction is that a statute clear and unambiguous on its face need not and cannot be interpreted by a court. Morgan County R.E.M.C. v. Indianapolis Power & Light Co. (1973), Ind., 302 N.E.2d 776; Knox County R.E.M.C. v. Public Service Commission of Indiana (1966), 139 Ind.App. 547, 213 N.E.2d 714; Meade Electric Co. v. Hagberg (1959), 129 Ind.App. 631, 159 N.E.2d 408. A cardinal principle of statutory construction mandates the court to interpret ambiguous statutes in order to ascertain and effectuate the general intent of the legislature. Wayne Township v. Lutheran Hospital (1974), Ind.App., 312 N.E.2d 120; Kirby v. Indiana Employment Security Board (1973), Ind.App., 304 N.E.2d 225; Morgan City R.E.M.C., supra; Thompson v. Thompson (1972), Ind., 286 N.E.2d 657. Similarly, the spirit of an enactment will prevail over the letter of the law. Town of Kewanna Water Works v. Indiana Employment [162 Ind.App. 664] Security Board (1961), 131 Ind.App. 400, 171 N.E.2d 262. Another fundamental rule of statutory construction is that if a statute is susceptible to more than one interpretation, then the court may consider the consequences of a particular construction. Boles v. State (1973), Ind., 291 N.E.2d 357; In re Annexation of Certain Territory (1965), 138 Ind.App. 207, 212 N.E.2d 393, reh. den., 138 Ind.App. 207, 213 N.E.2d 349; Fogle v. Pullman Standard Car Manufacturing Co. (1961), 133 Ind.App. 95, 173 N.E.2d 668. There is a strong presumption that the legislature in enacting a particular piece of legislation is aware of existing statutes on the same subject. Morgan County R.E.M.C., supra; Chaffin v. Nicosia (1973), Ind.App., 297 N.E.2d 904. Statutes relating to the same general subject matter are in pari materia and should be construed together so as to produce a harmonious system. State ex rel. Moore v. Smock (1973), Ind.App., 295 N.E.2d 857; Porter Memorial Hospital v. Harvey (1972), Ind.App., 279 N.E.2d 583. In this respect, when two statutes on the same subject must be construed together, the court should attempt to give effect to both; however, where the two are repugnant in any of their provisions, then the latter statute will control and operate to repeal the former to the extent of the repugnancy. State ex rel. Todd v. Hatcher (1973), Ind.App., 301 N.E.2d 766; Chaffin,supra. Similarly, where one statute deals with a subject in general terms and another statute deals with a part of the same subject in a more detailed or specific manner, then the two should be harmonized, if possible; but if they are in irreconcilable conflict then the more detailed will prevail as to the subject matter it covers. State ex rel. Todd, supra; Chaffin, supra; Citizens Gas & Coke Utility v. Sloan (1964), 136 Ind.App. 297, 196 N.E.2d 290, reh. den., 136 Ind.App. 297, 197 N.E.2d 312.

In construing tax statutes relating to assessment and collection, a liberal rule of construction must be indulged in order [162 Ind.App. 665] to secure their uniform implementation. Department of Treasury of Indiana v. Dietzen's Estate (1939), 215 Ind....

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78 practice notes
  • Howard v. United States, No. 09-575L
    • United States
    • Court of Federal Claims
    • August 16, 2012
    ...Kelly v. Ladywood Apartments, 622 N.E.2d 1044, 1047 (Ind. Ct. App. 1993) (citingPage 20Economy Oil Corp v. Ind. Dep't of State Revenue, 321 N.E.2d 215, 218 (Ind. Ct. App. 1974) ("When a statute is ambiguous, the court must ascertain the intent of the legislature and interpret the statute to......
  • Johnson County Farm Bureau Co-op. Ass'n, Inc. v. Indiana Dept. of State Revenue, No. 49T05-8912-TA-00066
    • United States
    • Indiana Tax Court of Indiana
    • March 21, 1991
    ...931), cognizant of the consequences of construing "cost" literally, Economy Oil Corp. v. Indiana Department of State Revenue (1974), 162 Ind.App. 658, 664, 321 N.E.2d 215, 218 (citing Boles v. State (1973), 259 Ind. 661, 291 N.E.2d 357; In re Annexation of Certain Territory (1965), 138 Ind.......
  • Perkinson v. Perkinson, No. 36S05–1206–DR–371.
    • United States
    • Indiana Supreme Court of Indiana
    • June 25, 2013
    ...Savings Bank v. Indiana State Bank, 177 Ind.App. 690, 380 N.E.2d 1288 (1978); Economy Oil Corp. v. Indiana Department of State Revenue, 162 Ind.App. 658, 321 N.E.2d 215 (1974); C & G Potts & Co. v. Fortney, 117 Ind.App. 195, 69 N.E.2d 752 (1946). In D.B. v. M.B.V., father filed a request fo......
  • Indiana Waste Systems, Inc. v. Board of Com'rs of Howard County, No. 2-277A58
    • United States
    • Indiana Court of Appeals of Indiana
    • April 26, 1979
    ...(1959), 239 Ind. 619, [180 Ind.App. 397] 159 N.E.2d 131; Economy Oil Corporation v. Indiana Department of State Revenue (1974), 162 Ind.App. 658, 321 N.E.2d 215; Etherton v. Wyatt (1973), 155 Ind.App. 440, 293 N.E.2d 43. Here the general statute grants a board of zoning appeals the power to......
  • Request a trial to view additional results
78 cases
  • Howard v. United States, No. 09-575L
    • United States
    • Court of Federal Claims
    • August 16, 2012
    ...Kelly v. Ladywood Apartments, 622 N.E.2d 1044, 1047 (Ind. Ct. App. 1993) (citingPage 20Economy Oil Corp v. Ind. Dep't of State Revenue, 321 N.E.2d 215, 218 (Ind. Ct. App. 1974) ("When a statute is ambiguous, the court must ascertain the intent of the legislature and interpret the statute to......
  • Johnson County Farm Bureau Co-op. Ass'n, Inc. v. Indiana Dept. of State Revenue, No. 49T05-8912-TA-00066
    • United States
    • Indiana Tax Court of Indiana
    • March 21, 1991
    ...931), cognizant of the consequences of construing "cost" literally, Economy Oil Corp. v. Indiana Department of State Revenue (1974), 162 Ind.App. 658, 664, 321 N.E.2d 215, 218 (citing Boles v. State (1973), 259 Ind. 661, 291 N.E.2d 357; In re Annexation of Certain Territory (1965), 138 Ind.......
  • Perkinson v. Perkinson, No. 36S05–1206–DR–371.
    • United States
    • Indiana Supreme Court of Indiana
    • June 25, 2013
    ...Savings Bank v. Indiana State Bank, 177 Ind.App. 690, 380 N.E.2d 1288 (1978); Economy Oil Corp. v. Indiana Department of State Revenue, 162 Ind.App. 658, 321 N.E.2d 215 (1974); C & G Potts & Co. v. Fortney, 117 Ind.App. 195, 69 N.E.2d 752 (1946). In D.B. v. M.B.V., father filed a request fo......
  • Indiana Waste Systems, Inc. v. Board of Com'rs of Howard County, No. 2-277A58
    • United States
    • Indiana Court of Appeals of Indiana
    • April 26, 1979
    ...(1959), 239 Ind. 619, [180 Ind.App. 397] 159 N.E.2d 131; Economy Oil Corporation v. Indiana Department of State Revenue (1974), 162 Ind.App. 658, 321 N.E.2d 215; Etherton v. Wyatt (1973), 155 Ind.App. 440, 293 N.E.2d 43. Here the general statute grants a board of zoning appeals the power to......
  • Request a trial to view additional results

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