Rush v. Department of Revenue of State of Ala.

• Decision Date: 24 March 1982
• Citation: 416 So.2d 1023
• Parties: George S. RUSH v. DEPARTMENT OF REVENUE OF the STATE OF ALABAMA. Civ. 3147.
• Court: Alabama Court of Civil Appeals

Page 1023

416 So.2d 1023

George S. RUSH v. DEPARTMENT OF REVENUE OF the STATE OF ALABAMA.

Civ. 3147.

Court of Civil Appeals of Alabama.

March 24, 1982.

Rehearing Denied April 28, 1982.

Certiorari Denied, July 23, 1982

Alabama Supreme Court 81 651.

Thomas J. Knight, Anniston, for appellant.

Charles A. Graddick, Atty. Gen., and Herbert U. Burson, Jr., Chief Counsel, Dept. of Revenue, and Asst. Atty. Gen., and B. Frank Loeb, Asst. Counsel., Dept. of Revenue, and Asst. Atty. Gen., for appellee.

BRADLEY, Judge.

This is a tax case.

George Rush was a general contractor who constructed two plants for the treatment of water to be placed in municipal water systems. He claimed that these two plants were tax exempt because they removed pollution from water. The Department of Revenue (hereinafter Department) disallowed these exemptions and assessed sales and use taxes against Rush.

Rush appealed these final assessments of tax to the Circuit Court of Calhoun County. He demanded a trial by jury, but the Department moved to strike this demand. The Department's motion was granted, and the case was heard by the court sitting without a jury. On April 20, 1981 a final judgment was entered in favor of the Department.

A motion for new trial was filed by Rush on May 20, 1981. On July 29, 1981 the trial court amended its final judgment. On September 8, 1981 Rush appealed to this court.

The major issue in this appeal is whether the trial court erred in finding that these water plants were not exempt from taxation under §§ 40-23-4(16) and 40-23-62(18), Code 1975. Further, Rush raises the issue of whether he is entitled to a jury trial in a tax case.

In addressing the jury trial issue, we find that there is no right to trial by jury in a tax case. Our courts have held that since there was no right to jury trial in tax assessment cases when our constitution was adopted, the right to a jury trial never operated in such a proceeding except as provided by statute. State v. Overby, 265 Ala. 39, 89 So.2d 525 (1956). There is no statutory provision allowing for a jury trial in these cases. As a result, the trial court did not err in striking the jury demand.

The major issues in this appeal concern the correct interpretation of exemptions from sales and use taxes provided by §§ 40-23-4(16) and 40-23-62(18), Code 1975. Section 40-23-4(16) provides the following exemption from sales tax:

(16) The gross proceeds from the sale of all devices or facilities, and all identifiable components thereof or materials for use therein, acquired primarily for the control, reduction or elimination of air or water pollution and the gross proceeds from the sale of all identifiable components of or materials used or intended for use in structures built primarily for the control, reduction or elimination of air and water pollution. [Emphasis supplied.]

Section 40-23-62(18) provides the following exemption from use tax:

(18) The storage, use or consumption of all devices or facilities, and all identifiable components thereof or materials for use therein, used or placed in operation primarily for the control, reduction or elimination of air or water pollution, and the storage, use or consumption of all identifiable components of or materials used or intended for use in structures built primarily for the control, reduction or elimination of air or water pollution. [Emphasis added.]

Rush contends that the term "pollution" as used in these statutes would include plants such as his which make water potable. However, the Department contends that the exemption is applicable only to facilities designed to remove human or industrial waste from water prior to its being discharged back into the environment.

In its final judgment the trial court found that the facilities in question processed raw, unpotable water into safe drinking water for human consumption and that pollutants were removed from the water. The court then held that § 40-23-4(16), Code 1975, was intended to apply solely to facilities designed for the removal of human or industrial waste from water before it was returned to the environment, and not to those designed and operated as water treatment plants.

Courts can only learn what the legislature intended by what it has said and where language of a statute is unambiguous the clearly expressed intent must be given effect. Drake v. Pennsylvania Threshermen & Farmers Mutual Casualty Insurance Co., 265 Ala. 444, 92 So.2d 11 (1957)....