Questar Data Systems, Inc. v. Commissioner of Revenue, No. C9-95-1880
| Court | Supreme Court of Minnesota (US) |
| Writing for the Court | PAGE; STRINGER |
| Citation | 549 N.W.2d 925 |
| Parties | QUESTAR DATA SYSTEMS, INC., Relator, v. COMMISSIONER OF REVENUE, Respondent. |
| Decision Date | 11 July 1996 |
| Docket Number | No. C9-95-1880 |
Page 925
v.
COMMISSIONER OF REVENUE, Respondent.
Page 926
Syllabus by the Court
When the essence of the transaction is a sale of printed materials to the customer in the regular course of the taxpayer's business, the taxpayer is not subject to a use tax on the printed materials; the taxpayer is, however, required, where applicable, to collect the appropriate sales tax from the customer.
Lawrence C. Brown, Walter A. Pickhardt, Faegre & Benson, Minneapolis, for Relator.
Hubert H. Humphrey, III, Attorney General, Michael M. Owen, Assistant Attorney General, St. Paul, for respondent.
Paul A. Zimmer, David E. Flotten, Courey, Albers, Kosanda & Zimmer, P.A., Minneapolis, for amicus curiae.
Considered and decided by the court en banc without oral argument.
PAGE, Justice.
Questar Data System, Inc. (Questar), petitioned this court for a writ of certiorari to review an order of the Minnesota Tax Court affirming the Commissioner of Revenue's (Commissioner) use tax and interest assessment
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in the amount of $147,594.33. 1 The assessment was based on unpaid use tax allegedly owed by Questar for the tax period October 1, 1989, through September 30, 1992. According to the Commissioner, Questar is a provider of research services and failed to pay the required use tax on certain printed materials used in providing research services to its customers. Questar appealed to the tax court, raising the issue of whether Questar, under Minn.Stat. § 297A.14, subd. 1 (1994), used the printed materials in the regular course of its business or whether it sold the printed materials to its customers. After a hearing, the tax court issued its findings of fact, conclusions of law, and order for judgment affirming the use tax assessment, concluding that the printed materials were used by Questar in providing research services. We reverse.Questar, a Minnesota corporation with its principal place of business in Eagan, Minnesota, is a full-service survey-based research company that provides a number of consulting and data processing services to its customers, including data tabulation and analysis, development and design of printed materials, and preparation of reports. Questar's services are sold to the customer a la carte; that is, the customer may purchase any one service or any combination of services as the customer sees fit. Questar's customers include business customers who conduct customer and employee opinion surveys and governmental, nonprofit, and school system customers who conduct various kinds of surveys and standardized tests.
When Questar pursues a contract with a customer, Questar sends the customer a Request for Proposal (RFP), outlining the itemized costs for services either requested by the customer or deemed appropriate by Questar for the customer. The costs for printed materials and data collection and analysis services are separately itemized on the RFPs. Over 80 percent of Questar's contracts call for Questar to provide printed materials in addition to other services. When invoicing customers, Questar separately itemizes the cost for printed materials, the cost for any consulting services, and the cost for data tabulation and analysis services. The itemized cost for printed materials includes a markup of 25 to 100 percent over Questar's actual cost.
Some of Questar's customers develop and design their own printed materials, while others rely on Questar to assist them in the development and design of printed materials. Once the customer gives final approval, Questar subcontracts the actual printing of the materials to outside vendors. Though Questar does not apply for a copyright, the printed materials are stamped with a copyright symbol, along with the year and the customer's name. Questar issues a resale exemption certificate to the vendor and does not pay a sales tax on its purchase of the printed materials. The printed materials are then distributed as directed by the customer.
For customers purchasing data tabulation and analysis services, either the customer or the survey participant returns the printed materials to Questar. The results are then submitted to the customer either in report form or on a data tape. Once the results are submitted to the customer, Questar either stores, returns, or disposes of the printed materials as directed by the customer. When printed materials are stored longer than one year, Questar contacts the customer and requests permission to destroy the materials. For an additional fee, Questar will continue to store the printed materials for the customer.
In reviewing tax court decisions, we are limited by Minn.Stat. § 271.10, subd. 1, to determining: (1) whether the tax court lacked jurisdiction; (2) whether the tax court's decision was supported by the evidence
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State v. AMERICAN WEST COMMUNITY PROMOTIONS, No. 20010223.
...within the statutory definition of a contractor where the facts of the case were not in dispute); Questar Data Sys. v. Comm'r of Revenue, 549 N.W.2d 925, 928 (Minn.1996) (examining the essence of the transaction between a taxpayer and it's customers as a question of law).556 A.2d at 582-83.......
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Boggero v. S.C. Dep't of Revenue, Appellate Case No. 2014–000214.
...to the facts and do not dispute any of the factual findings of the administrative law judge”); Questar Data Sys. v. Comm'r of Revenue, 549 N.W.2d 925, 928 (Minn.1996) (examining the “essence of the transaction” between a taxpayer and its customers as a question of law); MCI Airsignal, Inc. ......
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Webster v. Hennepin Cnty., A16-0736
...874 (Minn. 2014), and one in which we reviewed determinations of the tax court, Questar Data Systems Inc. v. Commissioner of Revenue , 549 N.W.2d 925 (Minn. 1996). Neither case is instructive here. In Ekdahl , we decided a question of statutory interpretation and stated that we are not "bou......
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Robinson & Muenster Assocs. v. Dept. of Rev., No. 20730.
...a court examines the essence of the transaction between Robinson and its customers. Questar Data Sys., Inc. v. Commissioner of Revenue, 549 N.W.2d 925, 928 (Minn. 1996) (citations omitted). A review of this record discloses the Department's auditor made no investigation regarding the essenc......
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State v. AMERICAN WEST COMMUNITY PROMOTIONS, No. 20010223.
...within the statutory definition of a contractor where the facts of the case were not in dispute); Questar Data Sys. v. Comm'r of Revenue, 549 N.W.2d 925, 928 (Minn.1996) (examining the essence of the transaction between a taxpayer and it's customers as a question of law).556 A.2d at 582-83.......
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Boggero v. S.C. Dep't of Revenue, Appellate Case No. 2014–000214.
...to the facts and do not dispute any of the factual findings of the administrative law judge”); Questar Data Sys. v. Comm'r of Revenue, 549 N.W.2d 925, 928 (Minn.1996) (examining the “essence of the transaction” between a taxpayer and its customers as a question of law); MCI Airsignal, Inc. ......
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Webster v. Hennepin Cnty., A16-0736
...874 (Minn. 2014), and one in which we reviewed determinations of the tax court, Questar Data Systems Inc. v. Commissioner of Revenue , 549 N.W.2d 925 (Minn. 1996). Neither case is instructive here. In Ekdahl , we decided a question of statutory interpretation and stated that we are not "bou......
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Robinson & Muenster Assocs. v. Dept. of Rev., No. 20730.
...a court examines the essence of the transaction between Robinson and its customers. Questar Data Sys., Inc. v. Commissioner of Revenue, 549 N.W.2d 925, 928 (Minn. 1996) (citations omitted). A review of this record discloses the Department's auditor made no investigation regarding the essenc......