Sales Tax Liability of Valley Queen Cheese, Matter of, No. 15148

CourtSupreme Court of South Dakota
Writing for the CourtWUEST
Citation387 N.W.2d 39
PartiesIn the Matter of the SALES TAX LIABILITY OF VALLEY QUEEN CHEESE, and/or Milbank Storage Inc. . Considered on Briefs
Docket NumberNo. 15148
Decision Date18 March 1986

Page 39

387 N.W.2d 39
In the Matter of the SALES TAX LIABILITY OF VALLEY QUEEN
CHEESE, and/or Milbank Storage Inc.
No. 15148.
Supreme Court of South Dakota.
Considered on Briefs March 18, 1986.
Decided May 7, 1986.

Gene R. Woodle, Asst. Atty. Gen., Pierre, for appellee State; Mark V. Meierhenry, Atty. Gen., Pierre, on brief.

Ronald G. Schmidt of Schmidt, Schroyer, Colwill & Zinter, P.C., Pierre, for appellant taxpayer.

WUEST, Justice.

Valley Queen Cheese (Valley Queen) appeals from a circuit court decision affirming an order of the South Dakota Secretary of Revenue (Secretary), directing Valley Queen, as the successor in interest to Milbank Storage, Inc. (Milbank Storage), to pay $39,994 in sales tax, interest and penalties, arising from a sales tax audit on Milbank Storage. We affirm.

Milbank Storage was established in 1967 by the co-owners of Valley Queen to facilitate Valley Queen's cash flow. Customers

Page 40

of Milbank Storage were Kraft Cheese, Valley Queen and, for a brief period from 1983, the United States Government. A tax audit was conducted on Milbank Storage. After an administrative hearing was held and briefs were filed, Secretary signed an order that the activities of Milbank Storage (now Valley Queen) constitute the warehousing of cheese and, as such, the gross receipts therefrom are taxable under the sales tax provisions of SDCL 10-45-4.

Valley Queen appealed the order in circuit court, raising a number of arguments as to why the sales tax should not be imposed upon its cheese warehousing operation. The circuit court affirmed the Secretary's order and Valley Queen appeals to this court. Valley Queen contends that its operation is exempt under SDCL 10-45-12.1, and the reasonable construction and application of the Standard Industrial Classification Manual of 1972 (SIC) Number 4221, as adopted by reference in SDCL 10-45-5.2. We disagree.

The construction of a statute is a question of law. Petition of Famous Brands, Inc., 347 N.W.2d 882 (S.D.1984); Matter of Change of Bed Category of Tieszen, 343 N.W.2d 97 (S.D.1984). Consequently, the decisions of an administrative agency and the circuit court thereto are fully reviewable on appeal to this court. Matter of Sales Tax or Use Tax, Etc., 290 N.W.2d 865, 868 (S.D.1980) citing In re Sales & Use Tax Determination, 225 N.W.2d 571 (N.D.1974); City of Milwaukee v. Wisconsin Employment Relations Commission, 71 Wis.2d 709, 239 N.W.2d 63 (1976). Nevertheless, the construction and interpretation given a statute by an administrative body charged with its administration is entitled to great weight. Id. citing Udall v. Tallman, 380 U.S. 1, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965); Milwaukee County v. Department of Industry, 80 Wis.2d 445, 259 N.W.2d 118 (1977). Tax imposition statutes are generally construed in favor of the taxpayer, while tax exemption statutes are construed against the taxpayer. N.W.S.P. v. Housing, Etc., 320 N.W.2d 515 (S.D.1982); Nash Finch Co. v. South Dakota Department of Revenue, 312 N.W.2d 470 (S.D.1981).

We agree with the opinion the circuit court expressed in its memorandum decision that "statutory construction is not necessary in the case at hand, as the statutes in question are plain and clear on their face." As the circuit court noted, SDCL 10-45-4 imposes sales tax "... upon the gross receipts of any person from the engaging or continuing in the practice of any business in which a service is rendered." SDCL 10-45-4.1 defines "service" as "... all activities engaged in for other persons for a fee ... or other monetary charge, which activities involve predominately the performance of a service as distinguished from selling property." SDCL 10-45-5.2 enumerates a representative list of services intended to be taxable and incorporates by reference portions of the SIC manual for that purpose. SDCL 10-45-5.2 makes Division E of the manual subject to the sales tax on services. Major Group 42 of Division E is Motor Freight Transportation and Warehousing. Industry Number 4222 of...

To continue reading

Request your trial
8 practice notes
  • Poppen v. Walker, No. 18374
    • United States
    • Supreme Court of South Dakota
    • 9 d2 Agosto d2 1994
    ...supposes that all enactments are intended to be harmonious in their several provisions. Sales Tax Liability of Valley Queen Cheese, 387 N.W.2d 39, 41 (S.D.1986). Therefore, if possible, we must endeavor to construe the term "lottery" in the amendment in the same sense as in the original pro......
  • Thares v. BROWN COUNTY BD. OF EQUALIZATION, No. 21366.
    • United States
    • Supreme Court of South Dakota
    • 23 d3 Agosto d3 2000
    ...to the subject at hand, ..." this Court will uphold the legislature's classifications. In re Sales Tax Liability of Valley Queen Cheese, 387 N.W.2d 39, 41 (S.D.1986). As long as a "plausible policy reason for the classification" exists, classifications should be held constitutional. Nordlin......
  • Sales and Use Tax Refund Request of Media One, Inc., Matter of, No. 51-0180701-ST
    • United States
    • Supreme Court of South Dakota
    • 4 d3 Dezembro d3 1996
    ...claims that this court should defer to its interpretation of the tax statutes, relying upon In re Sales Tax Liab. of Valley Queen Cheese, 387 N.W.2d 39, 40 (S.D.1986), where we stated: "[T]he construction and interpretation given a statute by an administrative body charged with its administ......
  • State v. French, Nos. 18135
    • United States
    • Supreme Court of South Dakota
    • 4 d1 Outubro d1 1993
    ...39 is supplied for the above reasons. See In re Pam Oil, Inc., 459 N.W.2d 251 (S.D.1990); Sales Tax Liability of Valley Queen Cheese, 387 N.W.2d 39 (S.D.1986). Simply put, French's actions allow for Essentially, my position is that if consumer protection is the goal, then the false informat......
  • Request a trial to view additional results
8 cases
  • Poppen v. Walker, No. 18374
    • United States
    • Supreme Court of South Dakota
    • 9 d2 Agosto d2 1994
    ...supposes that all enactments are intended to be harmonious in their several provisions. Sales Tax Liability of Valley Queen Cheese, 387 N.W.2d 39, 41 (S.D.1986). Therefore, if possible, we must endeavor to construe the term "lottery" in the amendment in the same sense as in the original pro......
  • Thares v. BROWN COUNTY BD. OF EQUALIZATION, No. 21366.
    • United States
    • Supreme Court of South Dakota
    • 23 d3 Agosto d3 2000
    ...to the subject at hand, ..." this Court will uphold the legislature's classifications. In re Sales Tax Liability of Valley Queen Cheese, 387 N.W.2d 39, 41 (S.D.1986). As long as a "plausible policy reason for the classification" exists, classifications should be held constitutional. Nordlin......
  • Sales and Use Tax Refund Request of Media One, Inc., Matter of, No. 51-0180701-ST
    • United States
    • Supreme Court of South Dakota
    • 4 d3 Dezembro d3 1996
    ...claims that this court should defer to its interpretation of the tax statutes, relying upon In re Sales Tax Liab. of Valley Queen Cheese, 387 N.W.2d 39, 40 (S.D.1986), where we stated: "[T]he construction and interpretation given a statute by an administrative body charged with its administ......
  • State v. French, Nos. 18135
    • United States
    • Supreme Court of South Dakota
    • 4 d1 Outubro d1 1993
    ...39 is supplied for the above reasons. See In re Pam Oil, Inc., 459 N.W.2d 251 (S.D.1990); Sales Tax Liability of Valley Queen Cheese, 387 N.W.2d 39 (S.D.1986). Simply put, French's actions allow for Essentially, my position is that if consumer protection is the goal, then the false informat......
  • 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