Rhode Island CATV Corp. v. Clark, 86-321
| Decision Date | 20 May 1988 |
| Docket Number | No. 86-321,86-321 |
| Citation | 541 A.2d 462 |
| Parties | RHODE ISLAND CATV CORPORATION v. R. Gary CLARK, Tax Administrator for the State of Rhode Island. TIMES MIRROR CABLE TELEVISION OF RHODE ISLAND, INC. v. R. Gary CLARK, Tax Administrator for the State of Rhode Island. M.P. |
| Court | Rhode Island Supreme Court |
This case comes before us on the petition for certiorari of the Tax Administrator for the State of Rhode Island to review a judgment of the District Court of the Sixth Division that reversed deficiency assessments made by the tax administrator against Rhode Island CATV Corporation and Times Mirror Cable Television of Rhode Island, Inc. (taxpayers), in the amounts of $52,038.18 and $54,143.72, respectively. We affirm. An agreed statement of facts served as the factual record in the proceedings below and may be summarized as follows.
The taxpayers, two Rhode Island corporations, collectively provide cable-television services to customers in the cities of Providence, Pawtucket, North Providence, as well as in Kent county. Their customers receive these services through cable lines that extend from each of the company's main processing stations, along utility poles, and eventually into the subscribers' homes. The cables are then connected to a converter, which is, in turn, connected to the subscribers' television sets. The converters are devices that permit the customers to view cable-television programs on their own television sets. The taxpayers must go into the home of each new customer to connect the cable from the utility pole to the converter and the converter to the television set. All subscribers are charged a one-time installation charge, which appears on the first bill received by the subscribers. This installation charge is separately stated from the monthly fee.
The installation charge, however, only partially defrays the cost of installation. The regular monthly fees charged to all subscribers include within them the remaining costs for installation, amortized over a longer period. This part of the monthly fee is not separately stated on each bill. The taxpayers keep the initial installation charge low so as to encourage new cable-television business.
The Rhode Island Division of Taxation (division) issued notices of deficiencies to the taxpayers based upon the division's determination that the separately stated installation charges were subject to sales tax pursuant to G.L. 1956 (1980 Reenactment) § 44-18-18. The taxpayers paid the assessed deficiencies and requested a hearing to contest the matter. A hearing on both cases was held and resulted in the conclusion that the taxes and penalties assessed against the taxpayers were correct. This conclusion was upheld in a final decision of the tax administrator.
The taxpayers then filed complaints in Sixth Division District Court, appealing the final decision of the tax administrator. The trial judge reversed the decision of the tax administrator holding that the charges for installation of the converters needed to gain access to cable television services falls within a sales tax exemption provision found in § 44-18-12(C), P.L. 1981, ch. 151, § 1. 1 The exemption provides that the term "sale price" does not include "[t]he amount charged for labor or services rendered in installing or applying the property sold * * * when such charge is separately stated by the retailer to the purchaser." Id.
Our review of the District Court's decision reversing the sales tax assessments on the installation charges for cable-television services is confined by G.L. 1956 (1984 Reenactment) § 42-35-16, P.L. 1984, ch. 167, § 4, to a review of any questions of law involved. This review "properly includes questions of law involving the applicability of a statute to undisputed facts." Hasbro Industries, Inc. v. Norberg, 487 A.2d 124, 126 (R.I. 1985) (quoting George, Inc. v. Norberg, 444 A.2d 868, 870 (R.I. 1982)). The sole issue concerns the proper meaning of the term "property sold" contained in the provisions of § 44-18-12(C), relating to exemptions from the definition of the term "sale price." The tax administrator first argues that the taxpayers are purveyors of intangible services and that by a plain reading of the statute the Legislature intended only to exempt from the definition of the term "sale price" installation costs associated with the sale of tangible personal property. After reviewing the record, we feel this argument is without merit.
Under § 44-18-18, a sales tax is imposed of 6 percent of the gross receipts of retail sales in Rhode Island. The term "gross receipts" is defined as "the total amount of the sale price * * * of the retail sales of retailers." Section 44-18-13. The term "sale price" is defined as:
"[T]he total amount for which tangible personal property is sold or leased or rented, and the total amount charged for the...
To continue reading
Request your trial
-
Cookson America, Inc. v. Clark
...scope of review properly includes questions of law involving the applicability of a statute to undisputed facts. Rhode Island CATV Corp. v. Clark, 541 A.2d 462 (R.I.1988); George, Inc. v. Norberg, 444 A.2d 868 (R.I.), cert. denied, 459 U.S. 908, 103 S.Ct. 214, 74 L.Ed.2d 170 (1982). When st......
-
Dart Industries, Inc. v. Clark
...addresses alleged errors of law, New England Telephone and Telegraph Co. v. Clark, 624 A.2d 298, 300 (R.I.1993); Rhode Island CATV Corp. v. Clark, 541 A.2d 462, 464 (R.I.1988), but also "properly includes questions of law involving the applicability of a statute to undisputed facts." George......