Old West Realty, Inc. v. Idaho State Tax Com'n

• Decision Date: 03 April 1986
• Docket Number: No. 15876,15876
• Citation: 110 Idaho 546,716 P.2d 1318
• Parties: OLD WEST REALTY, INC., an Idaho corporation, Plaintiff-Appellant, v. IDAHO STATE TAX COMMISSION, Defendant-Respondent.
• Court: Idaho Supreme Court

Page 1318

716 P.2d 1318

110 Idaho 546

OLD WEST REALTY, INC., an Idaho corporation, Plaintiff-Appellant, v. IDAHO STATE TAX COMMISSION, Defendant-Respondent.

No. 15876.

Supreme Court of Idaho.

April 3, 1986.

Joseph M. Meier, of Clemons, Cosho & Humphrey, Boise, for plaintiff-appellant.

Jim Jones, Atty. Gen., and Theodore V. Spangler, Deputy Atty. Gen., Boise, for defendant-respondent.

BAKES, Justice.

Old West Realty (Old West) appeals a decision of the district court granting summary judgment in favor of respondent tax commission. The district court ruled that the transfer of multiple listing booklets from Ada County Multiple Listing Service (Ada MLS) to appellant constituted a taxable transaction under the Idaho sales and/or use tax provisions, I.C. §§ 63-3601 et seq., because: (1) the transaction involved the transfer of tangible personal property, I.C. § 63-3616, and (2) any incidental service provided along with the transfer was inconsequential. On appeal Old West contends that the transaction in question involved the sale of services and that any incidental transfer of tangible personal property was inconsequential to the sale of services. We affirm the district court.

A good portion of the facts in the present case were stipulated to by the parties. Additionally, it is important to note that both parties moved for summary judgment, relying upon the same evidentiary facts and only questioning the application of the Idaho Sales Tax Act provisions to those facts. The district court was sitting without a jury in this case. Thus, as we held in Riverside Development Co. v. Ritchie, 103 Idaho 515, 519, 650 P.2d 657, 661 (1982), the district court was entitled to resolve any conflicting inferences which may be drawn from the undisputed evidentiary facts.

The essential undisputed facts are as follows. Old West Realty is a member broker of Ada MLS. Each month Old West is assessed a monthly fee of $30-43 per real estate salesman associated with the broker. During the period in question the number of salesmen working for Old West has been between 4 and 5 during any given month. Thus, the total fee assessed the brokerage has averaged around $150. In consideration of the payment of the monthly fee, Old West receives, inter alia, a weekly or bi-weekly multiple listing booklet (MLS book) for each salesman. ¹

During the relevant time period of this case the Idaho Sales Tax Act (Act) imposed an excise tax of 3% on the "sale price" of every "sale at retail" of tangible personal property. I.C. § 63-3619. The taxing authority conferred by the Act is expansive. Tangible personal property is defined as "personal property which may be seen, weighed, measured, felt or touched, or which is in any other manner perceptible to the senses." I.C. § 63-3616. Admittedly, the definition of tangible personal property does not include such intangibles as services. However, this does not mean that all services are exempt from taxation under the Act as is evident from the definition of "sales price."

"The term 'sales price' means the total amount for which tangible personal property, including services agreed to be rendered as a part of the sale, is sold, rented or leased, valued in money, whether paid in money or otherwise, without any deduction on account of any of the following:

....

"2. The cost of materials used, labor or service cost, losses, or any other expense." I.C. § 63-3613(a). (Emphasis added.)

Nevertheless, for the Tax Commission to prevail in this case it must be clear from the facts that: (1) the MLS books constitute tangible personal property, (2) the transaction involving the transfer of the books from Ada MLS to Old West constitutes a "sale" of tangible personal property "at retail," and (3) the "sales price" is the entire amount of the monthly fee assessed Old West.

We find the facts amply clear on the first point. There can be little doubt that the MLS books are tangible personal property as that term is defined by the Act. ² The crux of Old West's dispute centers on the second and third points. They contend that although the MLS books may technically be tangible personal property, the transaction in question was not a sale at retail of such property, but rather a sale of services, an intangible. We are not persuaded. The language of the statutory provisions is clear. A "sale at retail" is "a sale of tangible personal property for any purpose other than resale of that property in the regular course of business...." I.C. § 63-3609. The term "sale" is defined as "any transfer of title, ... conditional or otherwise, ... of tangible personal property for a consideration...." I.C. § 63-3612.

The district court noted that neither party raised any issue as to the transfer of title of the books. Since the facts are not in dispute, we need only apply the law to those facts to determine the transfer of title question. The applicable law, absent some agreement between Old West and Ada MLS to the contrary, is Article 2 of the Uniform Commercial Code. I.C. § 28-2-101 et seq. Section 401 of Article 2 provides that title to goods, such as the MLS books, is transferred to a buyer upon physical delivery of the goods. I.C. § 28-2-401(2). In the case at bar, there is no evidence of any agreement between Ada MLS and Old West regarding transfer of title. Therefore, we conclude that title to the MLS books was transferred to Old West upon delivery. There is no dispute that said transfer was "for a consideration;" clearly it was. Thus, we conclude that there was a sale of the MLS books by Ada MLS to Old West. This sale was a "sale at retail" since Old West had no intention of reselling those books and, in fact, was prohibited from doing...