SALT LAKE COUNTY BD. v. TAX COM'N
| Decision Date | 23 December 2004 |
| Docket Number | No. 20040028-CA.,20040028-CA. |
| Citation | 106 P.3d 182,2004 UT App 472 |
| Parties | SALT LAKE COUNTY BOARD OF EQUALIZATION, State of Utah, Plaintiff and Appellant, v. TAX COMMISSION; and Rio, Inc. dba Rio Grande Café, Defendants and Appellees. |
| Court | Utah Court of Appeals |
Mary Ellen Sloan and Jason Rose, Salt Lake City, for Appellant.
Mark L. Shurtleff, atty. gen., Timothy A. Bodily, asst. atty. gen., and John W. Call, Nygaard Coke & Vincent, Salt Lake City, for Appellees.
Before BILLINGS, P.J., DAVIS and ORME, JJ.
¶ 1 The Salt Lake County Board of Equalization the Board appeals the district court's granting of summary judgment to Rio, Inc. dba Rio Grande Café (Rio), which upheld the Utah State Tax Commission's the Tax Commission decision (1) granting a privilege tax exemption to Rio, see Utah Code Ann. § 59-4-101 (1995), and (2) denying the Board's assessment of an escaped property tax on Rio, see Utah Code Ann. § 59-2-309(1) (1995). Rio cross-appeals the district court's denial of litigation expenses under the Small Business Equal Access to Justice Act (the Small Business Act). See Utah Code Ann. §§ 78-27a-1 to -6 (2003). We affirm.
¶ 2 In 1978, the State of Utah purchased the Denver and Rio Grande Depot (the Depot) from the Salt Lake City Union Depot and Railroad Company. As property of the State, it is exempt from property tax under article XIII, section 2 of the Utah Constitution.
¶ 3 In 1981, the State entered into a lease with Rio's predecessor-in-interest for the purpose of opening a restaurant (the Café) within a portion of the Depot. In 1987, the State approved assignment of the lease to Rio to continue operating the Café. The Utah Historical Museum the Museum, Amtrak, and the Café occupied portions of the Depot during the relevant period. The Café and the Museum share restroom facilities.
¶ 4 The original lease has been renewed several times and remains in effect today. The lease provides that "the State is desirous of having a restaurant/cafeteria operated at said location for the convenience of employees, visitors, and the general public of the State." While the lease does not contain a specific requirement as to the Café's hours of operation, it does contain provisions regarding Rio's obligation to (1) provide food services to the Café's customers promptly and efficiently, (2) produce accounting records for examination upon request by the State, (3) obtain the State's approval of plans for renovations and alterations, (4) rehabilitate the premises upon the lease's expiration, and (5) conform to the State's requests regarding energy and water conservation.
¶ 5 During the relevant time period, the Café was generally open from 11:00 a.m. to 2:30 p.m. and 5:00 p.m. to 10:00 p.m., Monday through Friday; from 11:30 a.m. to 2:30 p.m. and 5:00 p.m. to 10:00 p.m. on Saturday; and from 4:00 p.m. to 9:00 p.m. on Sunday. The district court found that these hours fluctuate slightly, depending on the season.1 The Museum was open to the public Monday through Friday, 8:00 a.m. to 5:00 p.m. and on Saturday from 10:00 a.m. to 3:00 p.m. Amtrak trains arrived twice daily at 12:01 a.m. and 4:40 a.m. and departed from the station within forty minutes of arriving. The Amtrak train schedule indicated that the only food available at its Salt Lake City location was from vending machines.
¶ 6 From 1978 to 1995, the Salt Lake County Assessor (the County) listed the entire State-owned parcel, including the Café, as exempt property under parcel # XX-XX-XXX-XXX-XXX. However, in 1995, the County assessed the Café separately under parcel # XX-XX-XXX-XXX-XXXX for the purpose of assessing a privilege tax and an escaped property tax against Rio pursuant to Utah Code sections 59-4-101 and 59-2-309, respectively. See Utah Code Ann. §§ 59-4-101, 59-2-309 (1995).
¶ 7 Rio appealed the assessments to the Board, which upheld the privilege tax assessment in the amount of $3894.40 and the escaped property tax assessment in the amount of $6823.08. Rio then appealed that decision to the Tax Commission. After hearings, the Tax Commission determined that Rio's lease and use of the Depot entitled it to the concession exemption to the privilege tax. See id. § 59-4-101(3)(a).
¶ 8 The Board appealed the Tax Commission's decision by filing a Petition for Review in district court. After the court dismissed its constitutional claim,2 the Board filed a motion for summary judgment asking the district court to uphold its privilege tax and escaped property tax assessments. Rio filed a cross-motion for summary judgment seeking to uphold the Tax Commission's decision.
¶ 9 The district court affirmed the Tax Commission's decision and determined that the Café was a concession under the statute and thus exempt from the privilege tax. See id. The court also determined that because Rio was exempt from the privilege tax, the Board's escaped property tax assessment argument was moot. See id. § 59-2-309(1). After the district court entered its decision, Rio moved for an award of litigation expenses under the Small Business Act. See id. §§ 78-27a-1 to -6. The district court denied Rio's motion, ruling that the Board did not arbitrarily interpret the privilege tax statute to Rio's detriment and, therefore, the Board's appeal was not without substantial justification. The Board appeals and Rio cross-appeals.
¶ 10 The Board argues that the district court erred by granting summary judgment to Rio, holding that it qualifies for the concession exemption to the privilege tax, and accordingly, it is not subject to an escaped property tax assessment. Summary judgment is appropriate only when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. See Utah R. Civ. P. 56(c). "Because a challenge to summary judgment presents for review only questions of law, we accord no deference to the trial court's conclusions but review them for correctness." Crossroads Plaza Ass'n v. Pratt, 912 P.2d 961, 964 (Utah 1996) (quotations and citations omitted).
¶ 11 On cross-appeal, Rio argues that the district court erred by denying its motion for an award of litigation expenses under the Small Business Act because the Board's action was "without substantial justification." Utah Code Ann. § 78-27a-4 (2003). Whether Rio is entitled to litigation expenses under the Small Business Act is a question of law reviewed for correctness. See V-1 Oil Co. v. Utah State Tax Comm'n, 942 P.2d 906, 915 (Utah 1996)
.
¶ 12 The Board argues that Rio is not entitled to the concession exemption to the privilege tax because it is not a concession within the meaning of the statute. See Utah Code Ann. § 59-4-101(3)(a) (1995). The statute provides that a privilege "tax is not imposed [on] ... the use of property which is a concession in, or relative to, the use of a public airport, park, fairground, or similar property which is available as a matter of right to the use of the general public." Id.
¶ 13 To fall within the concession exemption to the privilege tax statute, three statutory criteria must be met:
First, the property in question must be of the type that ordinarily is exempt from taxation. Second, the property must be used by a private individual, association, or corporation in connection with a for-profit business. Third, the business entity must be a concessionaire at one of the listed public facilities.
Interwest Aviation v. County Bd. of Equalization, 743 P.2d 1222, 1224 (Utah 1987) (). The parties agree that the first two criteria are met: the Depot is otherwise exempt from taxes as property of the State, see Utah Const. art. XIII, § 2, and the Café is a for-profit business. Thus, we must only determine whether Rio is a "concession in, or relative to, the use of a public airport, park, fairground, or similar property" within the meaning of the statute. Utah Code Ann. § 59-4-101(3)(a).
¶ 14 There is no statutory definition of the term "concession" nor is there any definition of the term in the rules adopted by the Tax Commission. Furthermore, no Utah case has specifically defined the term and only one Utah case has addressed the concession exemption to the privilege tax; however, it does not provide us guidance in defining the term. See Interwest Aviation, 743 P.2d at 1224
().
¶ 15 In determining whether Rio qualifies for the concession exemption, we follow well settled rules of statutory construction:
First, we construe statutes that grant exclusions from taxation strictly against the party seeking an exemption, and that party accordingly bears the burden of proving that it qualifies for the exemption sought. Second, in construing any statute, "we first examine the statute's plain language and resort to other methods of statutory interpretation only if the language is ambiguous." Accordingly, we read the words of a statute literally unless such a reading is unreasonably confused or inoperable, and give the words their usual and accepted meaning. Third, the reviewing court does not look beyond the plain and unambiguous language to ascertain legislative intent. Finally, we presume that the "statute is valid and that the words and phrases used were chosen carefully and advisedly."
Gull Labs., Inc. v. Utah State Tax Comm'n, 936 P.2d 1082, 1084 (Utah Ct.App.1997) (quoting US Xpress, Inc. v. Utah State Tax Comm'n, 886 P.2d 1115, 1117 (Utah Ct.App.1994)).
¶ 16 Both the Tax Commission and the district court relied on two dictionary definitions for the term "concession." One dictionary defines "concession" as "a grant of land or property especially by a government in return for services or for a particular use," Webster's Ninth New Collegiate Dictionary (1985), and...
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Utah Standards of Appellate Review - Third Edition
...to litigation expenses under the small business act. See Salt Lake Cnty. Bd. of equalization v. Tax Commssion, 2004 UT App 472, ¶ 11, 106 P.3d 182. (10) The tax commission's interpretation of the tax code is a question of law and appellate courts grant no deference to the commission's inter......