Ryder Truck Rental, Inc. v. City of Phoenix
| Decision Date | 30 September 1992 |
| Docket Number | No. TX,TX |
| Citation | 172 Ariz. 490,838 P.2d 829 |
| Parties | RYDER TRUCK RENTAL, INC. v. CITY OF PHOENIX. 88-00749. |
| Court | Arizona Tax Court |
This is an action brought by Ryder Truck Rental, Inc., to recover privilege taxes it paid to the City of Phoenix on its rental income from leasing trucks. Former § 14-2(a)(8) of the Phoenix City Code imposed a privilege tax on income from leasing tangible personal property for a consideration. The City of Phoenix assessed Ryder privilege taxes based on this section for the time period of July 1983 through November 1986. Ryder claims it is exempted from this tax under the Phoenix City Code itself or under A.R.S. § 28-1599.05(I) because it pays a motor carrier tax to the State of Arizona.
Ryder and the City of Phoenix filed Cross Motions for Summary Judgment. The Court holds that Plaintiff, Ryder Truck Rental, Inc., is entitled to Summary Judgment. The Court further holds that the Defendant, City of Phoenix, is not so entitled.
The parties have prepared a Joint Stipulation of Facts for the purposes of their Cross Motions for Summary Judgment. Ryder is a Florida corporation authorized to do business in Phoenix. Ryder has, throughout the period in dispute, engaged in the business of leasing trucks and related equipment to businesses and individuals within the City of Phoenix. Ryder leases these trucks without drivers. The customer determines the operation of the vehicles during the rental period, subject to the limitation that the customer may not operate in violation of any laws.
All of Ryder's trucks are motor vehicles as defined in A.R.S. § 28-1599(5) or lightweight motor vehicles as defined in A.R.S. § 28-1599(3). Ryder leases trucks pursuant to short-term leases, long-term leases, and one way leases. Lessees are charged on the basis of both time and mileage.
During the relevant period, Ryder was licensed as a motor carrier by the Arizona Department of Transportation under A.R.S. § 28-1599.01. All of Ryder's trucks were registered with the Department of Transportation pursuant to A.R.S. § 28-1599.01(A)(2). Ryder reported and paid the applicable motor carrier tax on its motor vehicles pursuant to A.R.S. § 28-1599.05(B), and on its lightweight motor vehicles pursuant to A.R.S. § 28-1599.05(C). Ryder obtained cab cards for its vehicles as required by A.R.S. § 28-1599.01(A)(2), posted a motor carrier tax bond pursuant to A.R.S. § 28-1599.04, and filed monthly motor carrier tax reports with the Motor Vehicle Division of the Department of Transportation.
The City of Phoenix assessed Ryder privilege taxes pursuant to former § 14-2(a)(8) of the Phoenix City Code for the period of July 1983 to November 1986. Ryder contested the assessment of these taxes at the administrative level, and after exhausting its administrative remedies, brings suit here.
The former Phoenix City Code imposed a privilege tax on income from leasing tangible personal property for a consideration. Phoenix City Code § 14-2(a)(8). Ryder does not dispute that its leasing activities are taxable under this section. However, it does contend that the Phoenix City Code itself exempts it from the taxes imposed under § 14-2(a)(8).
Prior to 1982, the City of Phoenix imposed a privilege tax on persons who transported people or property for hire. Phoenix City Code § 14-2(a)(6). However, it exempted from this tax persons who paid a motor carrier license tax to the State of Arizona under A.R.S. § 40-641. Phoenix City Code § 14-40(b). Ryder maintains it would have qualified for this exemption because it paid motor carrier taxes to the state.
In 1982, the transportation industry was deregulated. As a result, comprehensive changes were made to the state statutes that taxed motor carriers. Title 40, Chapter 3 of the Arizona Revised Statutes, which contained the motor carrier license tax, was repealed by the Arizona legislature. A.R.S. § 40-641, the specific statute that imposed the tax, was also repealed. In its place, the legislature adopted Title 28, Chapter 9, Article 6; the current motor carrier tax.
In response to these changes, the Phoenix City Council amended the City Code provisions that dealt with motor carriers. Ordinance G-2365 contains some of these amendments. The City Council enacted Ordinance G-2365 in June of 1982 to conform the "Privilege License Tax code to existing law and not to extend the Privilege License Taxation in the transportation area beyond the present practice...." To effect this goal, the Council repealed Phoenix City Code § 14-40(b), the Code provision that had exempted persons who paid a motor carrier license tax to the State from paying a City privilege tax. It then deleted the language in Phoenix City Code § 14-2(a)(6) that taxed persons who transported people or property for hire. Prior to the adoption of Ordinance G-2365, the City taxed transportation activities under Phoenix City Code § 14-2(a)(6) and then exempted those activities under Phoenix City Code § 14-40(b). As a result of the amendments, transporting activities are not taxed in the first place.
Although Phoenix City Code § 14-40(b), the prior exemption statute, was repealed, Ryder maintains that it is still entitled to an exemption. Ryder argues that the Phoenix City Council's intent when it adopted Ordinance G-2365 was to prevent extending privilege license taxation in the transportation area beyond the then present practice. Because Ryder was previously exempt from taxation, the Council's intent was that it remain exempt from taxation.
Exemptions to taxation are strictly construed against the taxpayer. Devenir Associates v. City of Phoenix, 164 Ariz. 530, 531, 794 P.2d 605, 606 (Tax 1990). Tax exemptions, to exist under a statute, must be granted in unequivocal terms. People of Faith Inc. v. Arizona Dep't of Revenue, 161 Ariz. 514, 520, 779 P.2d 829, 835 (Tax 1989). The Phoenix City Code does not unequivocally grant Ryder an exemption from taxation. In fact, the Court cannot find any language in the Code that would support Ryder's assertion that its leasing activities are exempt. The Phoenix City Code did contain an exemption prior to 1982 for persons who paid the motor carrier license tax. Phoenix City Code § 14-40(b). This exemption was repealed by the Phoenix City Council in Ordinance G-2365.
Ryder's argument that it is entitled to an exemption is not based on any statutory language, but on the City Council's intent to prevent extending privilege license taxation in the transportation area beyond the then present practice. Ryder maintains that the Council did not intend to remove lessors from the scope of the exemption when it repealed Phoenix City Code § 14-40(b) and amended Phoenix City Code § 14-2(a)(6). When a legislature enacts a statute, it is the language of the statute which becomes the law. The unexpressed intent of the legislature in enacting the statute has no application. Rio Rico Properties, Inc. v. Santa Cruz County, 834 P.2d 166, 175 (Ariz.Tax 1992); Members of the Board of Education v. Leslie, 112 Ariz. 463, 465, 543 P.2d 775, 777 (1975). The Court holds that Ryder's leasing activities are not exempted from taxation by the Phoenix City Code.
Exemption Under A.R.S. § 28-1599.05(I)
Ryder next argues that A.R.S. § 28-1599.05(I) exempts it from the privilege taxes the City assessed against Ryder's truck leasing activities. A.R.S. § 28-1599.05(I) is contained in Arizona Revised Statutes Title 28, which is entitled "Transportation," Chapter 9, which is entitled "Taxes," and Article 6, which is entitled "Motor Carrier Tax." The motor carrier tax imposed under Article 6 applies to motor vehicles of licensed motor carriers and to lightweight motor vehicles. The tax is based on the vehicle's weight and the miles traveled on public highways within Arizona. A.R.S. § 28-1599.05.
A.R.S. § 28-1599.05(I), which contains the exemption at issue here, provides that motor carriers and lightweight vehicle operators are exempt from certain transaction privilege taxes imposed by local taxing authorities. A.R.S. § 28-1599.05(I) states:
I. Payment of the motor carrier tax by a motor carrier or a person who operates a lightweight motor vehicle shall exempt such motor carrier or lightweight motor vehicle operator from any transaction privilege tax or any similar tax imposed by any taxing authority within this state. Except as provided in this article, no other taxing authority in this state may impose a transaction privilege tax or any similar tax based on the gross proceeds of sales or gross income from sales derived from either:
1. A motor carrier's use on the public highways in this state.
2. A person's use of a lightweight motor vehicle on the public highways in this state.
Ryder argues that the exemption in the first sentence of A.R.S. § 28-1599.05(I) extends to its leasing activities. The City's assessment of privilege taxes against Ryder under § 14-2(a)(8) of the Phoenix City Code was therefore improper. The City urges that Ryder is not a motor carrier for purposes of A.R.S. § 28-1599.05(I). Even if Ryder is a motor carrier, the City maintains the exemption does not apply.
The first question this Court faces is whether Ryder is a motor carrier for purposes of the A.R.S. § 28-1599.05(I) exemption. If Ryder is not a motor carrier, the motor vehicles it leases do not fall within the exemption. The Court holds that Ryder is a motor carrier as defined by A.R.S. § 28-1599(4). That section defines motor carrier as "any person who operates or causes to be operated a motor vehicle on any public highway."
When construing a statute, a court must ascertain and give effect to the legislative intent behind the statute. To do so, the court examines the language used, the context,...
To continue reading
Request your trial
-
Union Transportes v. City of Nogales
...in this case is occupational licensing taxation. The district court's certification order refers to Ryder Truck Rental, Inc. v. City of Phoenix, 172 Ariz. 490, 838 P.2d 829 (Super.T.C.1992), an Arizona tax court decision arguably providing evidence that the Nogales ordinance is preempted. I......
-
Ryder Truck Rental, Inc. v. City of Phoenix
...City timely appealed. During the briefing of this appeal, the tax court filed its written opinion. 1 Ryder Truck Rental, Inc. v. City of Phoenix, 172 Ariz. 490, 838 P.2d 829 (Tax Ct.1992). ANALYSIS APPLICABILITY OF A.R.S. SECTION 28-1599.05(I) EXEMPTION TO PHOENIX PRIVILEGE TAXATION OF GROS......
-
Mervyn's v. Superior Court In and For County of Maricopa
...to be restricted to include only things of the same kind as those specifically enumerated. Ryder Truck Rental, Inc. v. City of Phoenix, 172 Ariz. 490, 497, 838 P.2d 829, 836 (Tax 1992), rev'd on other grounds, 179 Ariz. 537, 880 P.2d 1083 (App.1993). The 1913 Civil Code provision was the pr......