STEAMBOAT SPRINGS RENTAL v. Denver, No. 99CA0831.

• Decision Date: 08 June 2000
• Docket Number: No. 99CA0831.
• Citation: 15 P.3d 785
• Parties: STEAMBOAT SPRINGS RENTAL & LEASING, INC., d/b/a Advantage Rent-A-Car, Plaintiff-Appellee, v. CITY AND COUNTY OF DENVER; Cheryl Cohen, Manager of Revenue; and Department of Revenue, City and County of Denver, Defendants-Appellants.
• Court: Colorado Court of Appeals

15 P.3d 785

STEAMBOAT SPRINGS RENTAL & LEASING, INC., d/b/a Advantage Rent-A-Car, Plaintiff-Appellee, v. CITY AND COUNTY OF DENVER; Cheryl Cohen, Manager of Revenue; and Department of Revenue, City and County of Denver, Defendants-Appellants.

No. 99CA0831.

Colorado Court of Appeals, Div. II.

June 8, 2000.

As Modified on Denial of Rehearing July 27, 2000.

Certiorari Denied December 18, 2000.

Kuhlman & Kuhlman, P.C., Kenton H. Kuhlman, Englewood, Colorado, Larry D. Harvey, P.C., Larry D. Harvey, Englewood, Colorado, for Plaintiff-Appellee.

J. Wallace Wortham, Jr., City Attorney, Robert F. Strenski, Assistant City Attorney, Denver, Colorado, for Defendants-Appellants.

Gibson, Dunn & Crutcher, LLP, Gregory J. Kerwin, Jeffrey E. Oraker, Denver, Colorado, Amicus Curiae for Avis Rent A Car System, Inc.

Brownstein, Hyatt & Farber, P.C., Terence C. Gill, Denver, Colorado, Amicus Curiae for Hertz Corporation.

Opinion by Judge TAUBMAN.

In this action for judicial review of an administrative agency decision pursuant to C.R.C.P. 106(a)(4), defendants appeal the district court's Order reversing, in part, a decision of defendant, Cheryl Cohen, Manager of Revenue, of the Department of Revenue, City and County of Denver. The defendants are the City and County of Denver (Denver), Cohen, and the Department of Revenue of the City and County of Denver (defendants). Cohen's decision affirmed a Denver sales tax assessment against plaintiff, Steamboat Springs Rental & Leasing, Inc., d/b/a Advantage Rent-A-Car (Advantage). We affirm.

Following an audit of Advantage's taxes, Denver issued Advantage an assessment for sales taxes it asserts Advantage improperly failed to collect. According to Denver, these sales taxes should have been collected from customers between August 1, 1993, and July 31, 1996, for the loss of use of vehicles during repairs, and for payments made by customers to Advantage based on the estimated cost of vehicle repairs. Cohen affirmed this assessment, and Advantage appealed that decision to the district court.

The district court reversed Cohen's decision with respect to the assessment for amounts paid for vehicle repairs. The court concluded that because the cost of repairs could not be determined at the time the rental contract was signed, and the estimated cost of repairs was separately stated at a later date, such repair costs were not subject to sales tax. However, the court affirmed the assessment of taxes for the loss of use of vehicles while they were being repaired.

Defendants contend the trial court erred in concluding that the cost of vehicle repairs is exempted from sales tax. Specifically, defendants argue that the payments made by customers for vehicle repairs are taxable because they are part of the payments for tangible personal property -the rented vehicles. To the contrary, Advantage argues that repair costs are for intangible personal property because the customers are not entitled to the use or extended possession of the vehicles as a result of paying for repairs. We agree with Advantage. Accordingly, we agree with the district court that the consideration paid for vehicle repairs is exempt from sales tax, but for different reasons.

An appellate court may affirm a correct judgment based on reasoning different from that relied on by the trial court. Barham v. Scalia, 928 P.2d 1381 (Colo.App. 1996). An appellate court may set aside an administrative agency decision if the agency erroneously interpreted the law. Ohlson v. Weil, 953 P.2d 939 (Colo.App.1997).

The same rules of construction apply in the interpretation of ordinances and statutes. United Airlines, Inc. v. City and County of Denver, 975 P.2d 1139 (Colo.App. 1998) (cert. granted Apr. 19, 1999). When interpreting an ordinance, a reviewing court must look initially to the ordinance language for guidance. If the language is plain and unambiguous, the court must give effect to the commonly accepted meaning of the words of the ordinance. Regional Transportation District v. Voss, 890 P.2d 663 (Colo.1995).

When interpreting an ordinance, there is a presumption that the municipal governing body intended a just and reasonable result. See AviComm, Inc. v. Colorado Public Utilities Commission, 955 P.2d 1023 (Colo.1998).

Denver Revised Municipal Code § 53-25 provides:

There is levied and there shall be collected and paid a tax in the amount stated in this article, as follows: (1) on the purchase price paid or charged upon all sales and purchases of tangible personal property at retail.

This provision also applies to vehicle rentals. Denver Revised Municipal Code § 53-24(19). Pursuant to Denver Revised Municipal Code § 53-33, the tax is collected from customers by the car rental company, and is then paid to Denver. If the tax is not collected from customers, the car rental company is still liable for payment. Denver Revised Municipal Code § 53-28(a).

Tangible personal property is "corporeal personal property." Denver Revised Municipal Code § 53-24(21). This means property that "may be seen, weighted, measured, felt or touched or is in any manner perceptible to the senses." See Gold Star Sausage Co. v. Kempf, 679 P.2d 1116, 1118 (Colo.App.1984).

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