MATTER OF WE CARE TRANSPORTATION, INC. v. TAX APPEALS TRIBUNAL OF THE STATE OF NEW YORK
| Decision Date | 24 October 2002 |
| Parties | In the Matter of WE CARE TRANSPORTATION, INC., Petitioner,<BR>v.<BR>TAX APPEALS TRIBUNAL OF THE STATE OF NEW YORK et al., Respondents. |
| Court | New York Supreme Court — Appellate Division |
Petitioner maintains a fleet of 59 omnibuses and operates under a certificate of public convenience and necessity issued by the Department of Transportation as a common carrier of passengers with disabilities. Forty-five of the vehicles are shortened yellow buses specifically tailored for the transportation of children with disabilities and are used principally in connection with a special transportation contract with Erie County. When the buses are not used to transport children pursuant to that contract, they are used to transport children under contracts with various other public and private service providers. The remaining 14 buses operate under a contract with the Niagara Frontier Transit Metro System, Inc. (hereinafter Metro), and are used to transport disabled persons to and from medical appointments and adult day care. They provide curb-to-curb service for eligible passengers at scheduled times on a fixed route identified by Metro and are also used to perform other contracts, such as those with Medicaid providers.
In April 1997, petitioner filed a petition with the Department of Taxation and Finance (hereinafter Department) requesting a determination that its operations come within the definition of an omnibus carrier engaged in "local transit service" as the term is defined in 20 NYCRR 534.4[*] and, therefore, eligible for a refund of motor fuel tax, petroleum business tax and sales tax pursuant to Tax Law § 289-c (3) (d), § 301-c (c) and § 1119 (b). In December 1997, the Department issued an advisory opinion which concluded that petitioner's 45 buses operating under the special transportation contract did not operate as a local transit service. As such, the Department found that petitioner was entitled only to a partial refund based on the motor fuel tax paid for transporting school children pursuant to the Education Law. The Department opined that the remaining larger buses did operate as a local transit service and were, therefore, eligible for sales tax refunds pursuant to the Metro contract.
Following the issuance of the advisory opinion, petitioner filed three separate claims for refunds, including the one at issue herein, in the amount of $144,786.08 for sales tax paid on the purchase, between December 1, 1993 and May 31, 1997, of an omnibus, omnibus parts, equipment, lubricants and others supplies and services not including motor or diesel fuel. Following a hearing before an administrative law judge (hereinafter ALJ), and prior to the issuance of the ALJ's decision, the Department issued a supplemental decision in January 1999. Regarding petitioner's $144,786.08 sales tax claim, the Department conceded that the 14 larger buses were used in local transit service after the date the Metro contract went into effect, i.e., March 31, 1997, and, as a result, petitioner was entitled to a refund of a portion of the qualifying purchases. The Department, inter alia, modified its earlier denial by allowing a partial refund of $400.92 which, using the formula in 20 NYCRR 534.4, represented a portion of sales tax paid for the applicable period. Thereafter, the ALJ issued a decision comporting with the Department's supplemental decision. Petitioner filed an exception with respondent Tax Appeals Tribunal (hereinafter the Tribunal), which was denied and, with minor modifications, the Tribunal affirmed the ALJ's determination, prompting the commencement of this proceeding.
We confirm. Petitioner is not entitled to more than the partial refund granted by the Tribunal inasmuch as it failed to establish that it provided local transit services other than pursuant to the Metro contract. Statutes creating tax exemptions or credits are construed against the taxpayer (see Matter of Federal Deposit Ins. Corp. v Commissioner of Taxation & Fin., 83 NY2d 44, 49). A taxpayer not only has the burden of establishing his or her entitlement to such credit or exemption (see Matter of Golub Serv. Sta. v Tax Appeals Trib. of State of N.Y., 181 AD2d 216, 219), but must also demonstrate "`that its interpretation of the statute is * * * the only reasonable construction'" (Matter of Federal Deposit Ins. Corp. v Commissioner of Taxation & Fin., supra at 49, quoting Matter...
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