Potowomut Golf Club, Inc. v. Norberg, 73-292-M

Citation114 R.I. 589,337 A.2d 226
Decision Date09 May 1975
Docket NumberNo. 73-292-M,73-292-M
PartiesPOTOWOMUT GOLF CLUB, INC. v. John H. NORBERG, Tax Administrator. P.
CourtUnited States State Supreme Court of Rhode Island
OPINION

KELLEHER, Justice.

We have issued a writ of certiorari pursuant to the Administrative Procedures Act, G.L.1956 (1969 Reenactment) § 42-35-16. The petitioner, Potowomut Golf Club, Inc., is seeking our review of a Superior Court order which upheld the tax administrator's assessment of a deficiency as to certain sales tax due the state.

Potowomut Golf Club provides more than exercise for its members-it also serves food and liquor to them and their guests. It seems, however, that the members were more interested in the first eighteen holes than the proverbial nineteenth, because in 1966 the board of governors, which is charged with operating the club, was faced with an economic problem. Its members were not buying enough victuals and liquor refreshments to make the club's restaurant profitable. The board voted to raise the needed money by imposing a '* * * $15. per month minimum charge * * * (on) all Golf-playing members * * * this charge to be applied against food and liquor, not to include entrance fees to social events * * *.' In 1968, the resolution was amended so that the charge would be applied only against food purchases. Thus, if a member consumed at least $15 per month in foodstuffs, he would not incur any additional charges by the club, but if he consumed less, he would be assessed the difference between the amount of his comsumption and the $15 fee.

The club, recognizing that any sale of food to its members was subject to the 5 percent sales tax, G.L.1956 (1970 Reenactment) §§ 44-18-7 and 44-18-18, duly complied with all the taxing laws and paid the tax on its gross receipts realized from the actual sale of food. It did not pay any tax on the $15 fee or the remainder of such fee which reprfesented unconsumed food.

Upon an audit of the club's books, the tax administrator determined that any unused portion of the monthly minimum charge was also subject to the sales tax, and assessed the deficiency on the total amount of the unused portion of the $15 fees that remained in the food charge account. The club objects to this particular assessment, and the correctness of the administrator's decision is the sole issue before us.

Rhode Island imposes a tax on all retail sales at the rate of 5 percent of the gross receipts from such sales. Section 44-18-18. 'Gross receipts' comprise the total amount received in respect of the sale price of the retail sales of all retailers. Section 44-18-13.

Section 44-18-7 classifies nearly a dozen different transactions as sales. The two that are pertinent to this controversy are §§ 44-18-7, subd. C and 44-18-7, subd. D. Subsection C defines the following as a sale: 'The furnishing and distributing of tangible personal property for a consideration by social, athletic, and similar clubs and fraternal organizations to their members or others.' Subsection D defines a sale as: 'The furnishing, preparing, or serving for a consideration of food, meals, or drinks, including any cover, minimum, entertainment, or other charge in connection therewith.' The club takes the position that only an actual sale of food is taxable by virtue of § 44-18-7, subd. C. The tax administrator concentrates his fire on § 44-18-7, subd. d. The statute, he says, includes within a taxable sale any 'minimum charge' which is connected with the preparation, furnishing, or serving of food. As justification for his actions, the administrator relies on the language of § 44-18-7, subd. D, the language used by the board in its resolution where it speaks of a $15 'minimum charge,' and to the undisputed fact that the charge is related to the furnishing of food. On the other hand, the club argues that its unexpended food fees do not come within the statutory reference to minimum or cover charges but are in actuality special assessments or additional membership dues, both of which admittedly are not subject to any sales tax. We agree with the club.

In determining the nature of the club's recepts in this assessment, we are guided by the basic proposition that taxing statutes are to be strictly construed against the taxing authority. 'Doubts as to the construction of (taxing) laws of this charactor are to be resolved in favor of the taxpayer. The legislative intent to impose the burden of a tax is not to be found by implication nor conjecture. Before approving an assessment a court may well require that its authorization be clearly and explicitly expressed in the law.' Manning v. Board of Tax Comm'rs, 46 R.I. 400, 410, 127 A. 865, 870 (1925); United Transit Co. v. Hawksley, 86 R.I. 53, 133 A.2d 132 (1957).

Our function in interpreting the statute at issue here is no different than when we are faced with the task of construing any law to ascertain the legislative intent. In so doing, we assume that the Legislature, when it employed the language of § 44-18-17, subd. C and § 44-18-7, subd. D, intended to give it its ordinary plain meaning and sense in the context within which it is used. United Transit Co. v. Hawksley, supra. Although the Legislature and the golf club resolution both employ the term 'minimum charge,' the differing contexts in which the term is used lead us to conclude that different meanings were intended. The Legislature in enacting § 44-18-7, subd. D obviously was attempting to anticipate the problems which would arise when a nightclub operator or an owner of a restaurant tried to segregate his gross receipts into those which came from the actual purchase and consumption of food or liquor and those which...

To continue reading

Request your trial
21 cases
  • Presley v. Newport Hospital, 74-188-A
    • United States
    • United States State Supreme Court of Rhode Island
    • 8 November 1976
    ...the phrase 'death of a person' its ordinary, plain meaning and sense in the context within which it is used. Potowomut Golf Club, Inc. v. Norberg, 114 R.I. 589, 337 A.2d 226 (1975). After all, 'death of a person' is a term of common parlance and must, therefore, be accorded its usual, commo......
  • CIC-Newport Associates v. Stein
    • United States
    • United States State Supreme Court of Rhode Island
    • 11 July 1979
    ...taxpayer. See, e. g., Newport Gas Light Co. v. Norberg, 114 R.I. 696, 699, 338 A.2d 536, 538 (1975); Potowomut Golf Club, Inc. v. Norberg, 114 R.I. 589, 592, 337 A.2d 226, 227 (1975); Manning v. Board of Tax Commissioners, 46 R.I. 400, 410, 127 A. 865, 870 (1925). With this canon as our gui......
  • Cournoyer v. City of Woonsocket Budget Commission, C. A. PC 2013-4082
    • United States
    • Superior Court of Rhode Island
    • 10 April 2015
    ...against the taxing authority[, ]" and all doubts are to be resolved in the taxpayer's favor. Potowomut Golf Club, Inc. v. Norberg, 114 R.I. 589, 592, 337 A.2d 226, 227 (1975). Moreover, our Supreme Court has held that to protect individuals from the government abusing its authority to tax, ......
  • Cournoyer v. City of Woonsocket Budget Commission
    • United States
    • Superior Court of Rhode Island
    • 10 April 2015
    ...against the taxing authority[, ]" and all doubts are to be resolved in the taxpayer's favor. Potowomut Golf Club, Inc. v. Norberg, 114 R.I. 589, 592, 337 A.2d 226, 227 (1975). Moreover, our Supreme Court has held that to protect individuals from the government abusing its authority to tax, ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT