Narragansett Racing Ass'n, Inc. v. Norberg

• Decision Date: 14 March 1974
• Docket Number: No. 73-87-M,73-87-M
• Citation: 316 A.2d 334,112 R.I. 791
• Parties: NARRAGANSETT RACING ASSOCIATION, INC. v. John H. NORBERG, Tax Administrator. P.
• Court: Rhode Island Supreme Court

Page 334

316 A.2d 334

112 R.I. 791

NARRAGANSETT RACING ASSOCIATION, INC. v. John H. NORBERG, Tax Administrator.

No. 73-87-M.P.

Supreme Court of Rhode Island.

March 14, 1974.

[112 R.I. 796] Stephen F. Achille, Providence, for plaintiff-respondent.

Richard J. Israel, Atty. Gen., W. Slater Allen, Jr., Asst. Atty. Gen., Perry Shatkin, Chief Legal Officer (Taxation), Providence, for defendant-petitioner.

OPINION

KELLEHER, Justice.

We have issued a writ of certiorari pursuant to the provisions of the Administrative Procedures Act, G.L. 1956 (1969 Reenactment) § 42-35-16. The petitioner is the Tax Administrator of the State of Rhode Island. He seeks a review of a Superior Court order reversing his determination that the respondent herein is delinquent in the amount of certain taxes in the state. The respondent operates a horse racetrack which is headquartered in Pawtucket. Hereinafter, we shall refer to the petitioner as the 'Administrator' and the respondent as 'Narragansett.'

Prior to 1971, the state imposed an eight and one-half per cent tax on the total money wagered at a pari-mutuel track. (Section 41-4-3.) Such taxes are due and payable at the close of each day's racing. (Section 41-4-8.) At its January 1971 session the General Assembly amended § 41-4-3 by enacting P.L.1971, ch. 222 so that the pari-mutuel tax rate was increased from eight and one-half per cent to nine per cent. The amendment further provided that, in the event of a conflict in racing dates assigned to Rhode Island tracks with those of a track operating in New England, the tax rate would be reduced to eight and one-half per cent. The controversy before us presents a pure question of law involving the language used by the Legislature in addressing itself to the problem posed by two New England race-tracks operating at the same time. The pertinent provisions of ch. 222 read thus:

'However, each licensee conducting thoroughbred racing during such periods when thoroughbred race tracks in other New England states are conduction thoroughbred racing at the same time as those in this state shall, under the parimutuel system, pay to the state, and there is hereby imposed:

(a) a tax at the rate of eight and one-half (8 1/2%) of the total money wagered on such events * * *.'

The record certified to us discloses that Narragansett Park's 1971 fall meeting began on September 4 and ended on December 18. During this time the horses were racing at Rockingham racetrack in New Hampshire and at Suffolk Downs in Massachusetts. Racing at Rockingham ended in mid-October. Suffolk then opened and continued its operation almost until mid-December. However, neither out-of-state track operated on Tuesdays, ¹ and this fact caused a conflict between Narragansett and the Administrator. Narragansett paid an eight and one-half per cent tax on money wagered on Tuesdays' races. The Administrator ruled that because on Tuesdays the only thoroughbred horses racing in New England were racing at Narragansett Park, there was no conflict on those days and the nine per cent rate was to be imposed on Tuesdays' betting.

The language in the 1971 amendment which precipitated this proceeding are the phrases 'during such periods,' and 'at the same time.' In justifying the nine per cent tax rate, the Administrator relies on the principle that a tax exemption is to be strictly construed and he then defines the word 'periods' as used in the 1971 enactment to mean the aggregate of days during the 1971 fall meeting when Rockingham and Suffolk Downs were open for business. Under the Administrator's view, each day of conflict constitutes a period. Consequently, there would be five conflicting periods a week, i.e., Monday, Wednesday, Thursday, Friday, and Saturday. While we give the Administrator an 'A' for his zeal in seeking to enrich the state's coffers, we cannot concur in his view of ch. 222.

While we have some doubt that a one-half per cent reduction of the pari-mutuel tax could be properly classified as an exemption, ² we will not employ a rule calling for a strict construction to nullify the obvious intent of the General Assembly. Palmer v. Couper, 109 R.I. 241, 283 A.2d 672 (1971). The paramount task in construing a statute is to ascertain the intent behind its enactment and to effectuate that intendment whenever it is lawful and within the competence of the Legislature. Almac's, Inc. v. R. I. Grape Boycott Comm., 110 R.I. 36, 290 A.2d 52 (1972).

At the administrative hearing, Narragansett's president gave evidence of what has been common knowledge. When a Rhode Island track runs in competition with another other New England track, the Rhode Island enterprise figuratively and literally runs out of the money. This official pointed out that during the interval the Rhode Island track is running unopposed much of the wagering is generated by the out-of-state bettor. However, at other times it is much more convenient for the Boston bettor, seeking to improve the breed, to take a short trip to Suffolk or a rapid dash to Rockingham. Where there's a choice, he related, the owner of the better horses takes his animals to the out-of-state track. This tendency reduces the number of horses who race in Rhode Island. This reduction in turn effects a lowering in the amount wagered on the races. The president explained that the scientific bettor is reluctant to...