Transport Leasing Corp. v. State, No. 43369

CourtSupreme Court of Minnesota (US)
Writing for the CourtPETERSON; MacLAUGHLIN
Citation199 N.W.2d 817,294 Minn. 134
PartiesTRANSPORT LEASING CORPORATION, Respondent, v. STATE of Minnesota and Commissioner of Taxation, Appellants, County of Hennepin, et al., Appellants, and In re Petition of Transport Leasing Corporation for determination of the validity of its objections to personal property taxes payable in 1969.
Decision Date14 July 1972
Docket NumberNo. 43369

Page 817

199 N.W.2d 817
294 Minn. 134
TRANSPORT LEASING CORPORATION, Respondent,
v.
STATE of Minnesota and Commissioner of Taxation, Appellants,
County of Hennepin, et al., Appellants,
and
In re Petition of Transport Leasing Corporation for
determination of the validity of its objections to
personal property taxes payable in 1969.
No. 43369.
Supreme Court of Minnesota.
July 14, 1972.

Page 818

Syllabus by the Court

1. Tools and machinery owned by the taxpayer and leased to another, which are used or usable by the lessee for purposes exemptible under Minn.St.1969, § 272.02(11)(b), are exempt from ad valorem taxation. The statute does not require concurrence of ownership and use.

2. The taxpayer's election, alternative in form, to have his personal property exempt either as inventory, § 272.02(11)(a), or as tools and machinery, § 272.02(11)(b), whichever classification provided statutory exemption, was an effective election.

Warren Spannaus, Atty. Gen., C. Hamilton Luther, Sp. Asst. Atty. Gen., St. Paul, for Commissioner of Taxation.

[294 Minn. 135] George M. Scott, County Atty., David E. Mikkelson, Asst. County Atty., Minneapolis, for Hennepin County.

Dorsey, Marquart, Windhorst, West & Halladay, Minneapolis, for respondent.

Heard and considered en banc.

PETERSON, Justice.

The first issue for decision is whether under Minn.St.1969, § 272.02(11)(b), 1 tools and machinery owned by the taxpayer but leased to another, and used or usable by the lessee for purposes declared exemptible by the statute, are exempt from ad valorem taxation for the assessment years 1967 and 1968. We affirm the trial court's determination that they were exempt. The second issue is whether, for either or both of those years, the taxpayer made an effective election to be so exempt. We affirm the trial court's determination that the election was effective for 1968 and reverse its contrary determination as to 1967.

The issues in this case are nonrecurring because this statute [294 Minn. 136] has been so amended by Ex.Sess.L.1971, c. 31, art. XXII, § 3, effective January 2, 1972, that virtually all

Page 819

business personal property is exempt from taxation, without regard to the manner in which it is used and without the requirement that the taxpayer file an election. Our decision accordingly will have little precedential value except as to other taxpayers similarly situated at the present time.

1. In the taxable years, the taxpayer, plaintiff Transport Leasing Corporation, was engaged in the business of leasing tools and machinery, used by its lessees for the purposes described in Minn.St.1969, § 272.02(11)(b), as exempt. 2 This leasing system is a financing arrangement which permits the lessee to pay for equipment over the term of the lease instead of paying the full purchase price at the time of acquisition. These are net lease agreements for a noncancellable term, the length of which varies depending upon the nature and use of the property and the financial responsibility of the lessee. The lessee is commonly provided an option either to purchase the property at fixed times or to trade it for new equipment. The agreegate of the rental payments is sufficient to amortize the purchase price, with interest, and bring a financial return to the lessor. The lessee is additionally obligated to pay all expenses commonly associated with the use and operation of business assets, including all taxes imposed upon the interest of either the lessor or the lessee in the property or upon its use and operation.

We hold, in agreement with the trial court, that such leased tools and machinery were exempt from taxation by § 272.02(11)(b) if the owner has filed an effective election with the assessor for such exemption. The essence of the state's claim for [294 Minn. 137] taxability, rightly rejected by the trial court, is that there must be a concurrence of both ownership and use as a prerequisite to exemption.

The statute is by its terms directed at the use, rather than ownership, of property for tax-exemption purposes. It does not say that the owner must so use the property or that the user must be the owner. The absence of language requiring concurrence of ownership and use appears intentional, for § 272.02(14) did impose a requirement of concurrence of ownership and use for the exemption of agricultural tools, implements, and machinery. 3 Distinctions of language in the same context must be presumed intentional and must be applied consistent with that intent. Springborg v. Wilson & Co., Inc., 255 Minn. 119, 127, 95 N.W.2d 598, 604 (1959). We think the nontechnical language of the statute is of such sufficient clarity as not to compel judicial deference to the contrary administrative interpretation of this relatively recent statute....

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29 practice notes
  • League of Women Voters Minn. v. Ritchie, No. A12–0920.
    • United States
    • Supreme Court of Minnesota (US)
    • August 27, 2012
    ...331 (Minn.2008) (holding that “practical difficulties” is a lesser standard than “particular hardship”); Transp. Leasing Corp. v. State, 294 Minn. 134, 137, 199 N.W.2d 817, 819 (1972) (holding that a tax statute was “by its terms directed at the use, rather than ownership, of property” beca......
  • Abex Corp. v. Commissioner of Taxation, No. 42835
    • United States
    • Supreme Court of Minnesota (US)
    • March 23, 1973
    ...within the definition of real estate something other than 'improvements.' (c) The dissent quotes from Transport Leasing Corp. v. State, 294 Minn. 134, 137, 199 N.W.2d 817, 819 (1972), as 'Our interpretation of the statute (the exemption statute involved[295 Minn. 463] herein) is consistent ......
  • State v. Nelson, No. A12–0071.
    • United States
    • Supreme Court of Minnesota (US)
    • February 12, 2014
    ...that the words have different meanings.” Dereje v. State, 837 N.W.2d 714, 720 (Minn.2013); see also Transp. Leasing Corp. v. State, 294 Minn. 134, 137, 199 N.W.2d 817, 819 (1972) (“Distinctions of language in the same context must be presumed intentional and must be applied consistent with ......
  • Coleman v. Ritchie, No. A08-2169.
    • United States
    • Supreme Court of Minnesota (US)
    • March 6, 2009
    ...uses different words in the same context, as it does here, it intends them to mean different things. Transp. Leasing Corp. v. State, 294 Minn. 134, 137, 199 N.W.2d 817, 819 Contrary to the majority's narrow definition of election "returns," I read subdivision 1 of section 204C.28 as includi......
  • Request a trial to view additional results
29 cases
  • League of Women Voters Minn. v. Ritchie, No. A12–0920.
    • United States
    • Supreme Court of Minnesota (US)
    • August 27, 2012
    ...331 (Minn.2008) (holding that “practical difficulties” is a lesser standard than “particular hardship”); Transp. Leasing Corp. v. State, 294 Minn. 134, 137, 199 N.W.2d 817, 819 (1972) (holding that a tax statute was “by its terms directed at the use, rather than ownership, of property” beca......
  • Abex Corp. v. Commissioner of Taxation, No. 42835
    • United States
    • Supreme Court of Minnesota (US)
    • March 23, 1973
    ...within the definition of real estate something other than 'improvements.' (c) The dissent quotes from Transport Leasing Corp. v. State, 294 Minn. 134, 137, 199 N.W.2d 817, 819 (1972), as 'Our interpretation of the statute (the exemption statute involved[295 Minn. 463] herein) is consistent ......
  • State v. Nelson, No. A12–0071.
    • United States
    • Supreme Court of Minnesota (US)
    • February 12, 2014
    ...that the words have different meanings.” Dereje v. State, 837 N.W.2d 714, 720 (Minn.2013); see also Transp. Leasing Corp. v. State, 294 Minn. 134, 137, 199 N.W.2d 817, 819 (1972) (“Distinctions of language in the same context must be presumed intentional and must be applied consistent with ......
  • Coleman v. Ritchie, No. A08-2169.
    • United States
    • Supreme Court of Minnesota (US)
    • March 6, 2009
    ...uses different words in the same context, as it does here, it intends them to mean different things. Transp. Leasing Corp. v. State, 294 Minn. 134, 137, 199 N.W.2d 817, 819 Contrary to the majority's narrow definition of election "returns," I read subdivision 1 of section 204C.28 ......
  • Request a trial to view additional results

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