Outdoor Cap Co. v. Benton Cnty. Treasurer
| Decision Date | 18 December 2014 |
| Docket Number | No. CV–14–40,CV–14–40 |
| Parties | Outdoor Cap Co., Inc., Appellant v. Benton County Treasurer, Benton County Assessor, and Benton County Tax Collector, Appellee |
| Court | Arkansas Supreme Court |
Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C., Fayetteville, by: Robert K. Rhoads, for appellant.
Clark & Spence, by: George R. Spence, Bentonville, for appellees.
This appeal arises from a dispute over a refund of ad valorem taxes. Appellant, Outdoor Cap Co., Inc. (“Outdoor Cap”) was founded in 1976 and is a headwear company with its headquarters and largest distribution center located in Bentonville, Arkansas, in Benton County. Outdoor Cap has been paying ad valorem personal-property taxes in Benton County since 1976. In 2011, Outdoor Cap sought a refund from the appellee, Benton County Treasurer, Benton County Assessor, and the Benton County Tax Collector (“Benton County”) of certain taxes which Outdoor Cap contended that it was entitled to pursuant to Ark. Code Ann. § 26–26–1102 (Repl. 2012). Specifically, this appeal stems from Outdoor Cap seeking a refund of certain taxes paid in 2008 and 2009 for a total of $247,143.02. Benton County opposed the refund. The parties agree that Outdoor Cap is a manufacturer and is entitled to the “manufacturer's exemption” or the “Freeport exemption” pursuant to Ark. Code Ann. § 26–26–1102. The parties dispute whether Outdoor Cap is entitled to a refund of the 2008 and 2009 taxes that Outdoor Cap asserts were exempt under the “manufacturer's exemption” and that the taxes were erroneously assessed.
After the Benton County Assessor's Office denied Outdoor Cap's request for a refund, on October 4, 2012, Outdoor Cap filed a petition for tax refund in the County Court of Benton County, and Benton County responded. On November 30, 2012, the County Court denied Outdoor Cap's petition for tax refund. On December 13, 2012, Outdoor Cap appealed the denial to the Benton County Circuit Court. On January 2, 2013, Outdoor Cap filed its complaint in the Benton County Circuit Court seeking reversal of the November 30, 2012 order and sought a refund of the alleged overpaid taxes. On January 11, 2013, Benton County answered the complaint and again, opposed the tax refund. The parties filed competing motions for summary judgment and timely responded and replied. On August 28, 2013, the circuit court conducted a hearing and on September 12, 2013, the circuit court granted Benton County's motion for summary judgment and denied Outdoor Cap's motion for summary judgment, finding that Outdoor Cap was not entitled to a refund of any portion of the 2008 and 2009 personal-property taxes it had paid.
From that order, on January 10, 2014, Outdoor Cap timely appealed to the court of appeals and on September 23, 2014, we assumed jurisdiction of this case. Outdoor Cap presents three points on appeal: (1) whether the circuit court erred in finding that the personal-property tax was not “exempt” from taxation; (2) whether the circuit court erred in determining the personal property was not erroneously assessed; and (3) whether the circuit court erred in applying the voluntary payment doctrine.
We have ceased referring to summary judgement as a “drastic” remedy and now simply regard it as one of the tools in the trial court's efficiency arsenal. Laird v. Shelnut, 348 Ark. 632, 641, 74 S.W.3d 206, 211 (2002). A summary judgment should be granted only when the state of the evidence as portrayed by the pleadings, affidavits, discovery responses, and admissions on file is such that the nonmoving party is not entitled to a day in court, i.e., when there is not any genuine remaining issue of material fact and the moving party is entitled to judgment as a matter of law. Wallace v. Broyles, 332 Ark. 189, 961 S.W.2d 712 (1998). “Normally, on a summary-judgment appeal, the evidence is viewed most favorably for the party resisting the motion and any doubts and inferences are resolved against the moving party, but in a case where the parties agree on the facts, the appellate court simply determines whether the appellee was entitled to a judgment as a matter of law.” City of Little Rock v. Pfeifer, 318 Ark. 679, 887 S.W.2d 296 (1994).
Additionally, this case presents an issue of statutory interpretation. Issues of statutory construction are reviewed de novo on appeal, and it is for the appellate court to determine the meaning of a statute. Hodges v. Huckabee, 338 Ark. 454, 995 S.W.2d 341 (1999). The appellate court is not bound by the circuit court's interpretation, but in the absence of a showing that the circuit court misinterpreted the law, the trial court's interpretation will be accepted as correct. Id. We construe the statute so that no word is left void, superfluous, or insignificant, and we give meaning and effect to every word in the statute, if possible. Miller v. Enders, 2013 Ark. 23, at 6–7, 425 S.W.3d 723, 726–27.
For its first point on appeal, Outdoor Cap contends that the circuit court erred in finding that the personal-property tax was not “exempt” from taxation. Citing to Ark. Code Ann. § 26–26–1102(b)(1)(A)–(B) (Repl. 2012) and Omega Tube & Conduit Corp. v. Maples, 312 Ark. 489, 850 S.W.2d 317 (1993), Outdoor Cap contends that its personal property is subject to the manufacturer's exemption, also known as the “Freeport” or “no situs” law. Thus, it contends that the property at issue was exempt from taxation and that the tax at issue was void and should be refunded.
Outdoor Cap first contends that the property is exempt from taxation pursuant to “the manufacturer's or Freeport exemption” Ark. Code Ann. § 26–26–1102(b)(l)(B). Because the property is exempt, the tax must be rendered void because article 16, section 6, of the Arkansas Constitution provides that all other laws outside of Arkansas's Constitution which exempt property from taxation are void. Accordingly, Outdoor Cap contends that the property is not subject to taxation, is “exempt” from taxation, the taxes are void, and it is entitled to a refund on the 2008 and 2009 years.
Benton County responds that the “manufacturer's exemption” applies to the taxes at issue, but does not create an “exemption” from taxation. Rather, the property is in transit and will be taxed where the item is eventually sold. It further responds that the property is not “exempt” from taxation and a valid tax. Rather than “exempt,” Benton County contends that Ark. Code Ann. § 26–26–1102(b)(1)(B) statutorily creates an exception for property in transit to be taxed while being manufactured and the property does not attain “tax situs” allowing it to be taxed in Arkansas. Stated differently, the statute does not create exemption status for the property but creates an exception to attaining tax situs. Benton County further responds that Omega Tube is controlling and that the circuit court correctly denied the refund.
Outdoor Cap replies that based on Omega Tube the property at issue is free from taxation by virtue of not acquiring “situs” in Arkansas and cannot be taxed, and thus a refund is appropriate.
The statute at issue, Ark. Code Ann. § 26–26–1102 provides in pertinent part:
Omega Tube, 312 Ark. at 497, 850 S.W.2d at 321.
In Omega Tube, we also issued a supplemental...
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