Wisconsin Dept. of Revenue v. Milwaukee Brewers Baseball Club, 81-1875

• Decision Date: 24 June 1982
• Docket Number: No. 81-1875,81-1875
• Citation: 108 Wis.2d 553,322 N.W.2d 528
• Parties: WISCONSIN DEPARTMENT OF REVENUE, Petitioner-Respondent and Cross-Appellant, v. MILWAUKEE BREWERS BASEBALL CLUB, Appellant and Cross-Respondent.
• Court: Wisconsin Court of Appeals

Page 528

322 N.W.2d 528

108 Wis.2d 553

WISCONSIN DEPARTMENT OF REVENUE, Petitioner-Respondent and Cross-Appellant, v. MILWAUKEE BREWERS BASEBALL CLUB, Appellant and Cross-Respondent.

No. 81-1875.

Court of Appeals of Wisconsin.

Submitted on Briefs April 8, 1982.

Opinion Released June 24, 1982.

Opinion Filed June 24, 1982.

Ronald L. Walter, David A. Baker and Foley & Lardner, Milwaukee, for appellant and cross-respondent.

Bronson C. La Follette, Atty. Gen., and John J. Glinski, Asst. Atty. Gen., for petitioner-respondent and cross-appellant.

Before GARTZKE, P. J., and BABLITCH and DYKMAN, JJ.

GARTZKE, Presiding Judge.

The Tax Appeals Commission held that promotional items acquired by the Milwaukee Brewers Baseball Club for distribution to its customers at baseball games were not subject to the use tax. The judgment of the circuit court reversed that decision and taxpayer appeals. We hold that the use tax applies and affirm that part of the judgment. The commission also held that the club's purchases of admission tickets were not subject to the use tax. The circuit court affirmed that decision and the Department of Revenue cross appeals. We hold that the use tax applies and reverse that part of the judgment.

The Milwaukee Brewers Baseball Club is a partnership with its principal place of business in Milwaukee. It owns a professional baseball franchise. During its fiscal years ending October 31 in 1971 through 1975, and between November 1 through December 31, 1975, the club purchased promotional items, such as baseball bats and jackets, from out-of-state vendors for about $243,000. It transferred the promotional items to its customers in connection with the purchase of paid admission tickets to its home games in Milwaukee. During the same periods, the club purchased printed tickets from out-of-state vendors for use in selling admissions to its Milwaukee games. The tickets cost the club about $108,000 at a unit cost of one cent each.

The commission found that the promotional items and tickets were included in the price of admission and were not transferred by separate retail sales. The commission also concluded that because a sales tax was paid on game admissions, and the admission price included the promotional items and tickets, no use tax liability was incurred.

Because the facts are undisputed, only questions of law are presented, and we may substitute our conclusions for those of the Tax Appeals Commission or the trial court. Department of Revenue v. Bailey-Bohrman Steel Corp., 93 Wis.2d 602, 606, 287 N.W.2d 715, 717 (1980).

We start with the purpose of the use tax: to prevent a buyer from avoiding sales tax in this state by purchasing goods in other states. The use tax supplements the sales tax by levying a tax on property purchased in another state for the storage, use or other consumption in this state of personalty or certain services, "the sale of which has not been reached by the sales tax." Department of Revenue v. Moebius Printing Co., 89 Wis.2d 610, 622, 279 N.W.2d 213, 218 (1979).

Spelled out, the statutory framework is as follows: Section 77.53(1), Stats., levies a use tax on the storage, use or other consumption in this state of tangible personal property "purchased from any retailer." A "retailer," for our purposes, is defined by sec. 77.51(7)(a) as "[e]very seller who makes any sale of tangible personal property ...." "Sale" is defined by sec. 77.51(4) as including "the transfer of the ownership of, title to, possession of, or enjoyment of tangible personal property or services for use or consumption but not for resale ...." (Emphasis added.) Consequently, if the taxpayer's acquisitions were "not for resale," and if the taxpayer stored, used or consumed the property in this state, then it is liable for a use tax.

1. Promotional Items

The club contends that a retail sale of its promotional items occurs when they are transferred to ticket holders. Because admission price to its games is taxed as a service under sec. 77.52(2)(a)2, Stats., and because promotional items are tied to the price of admission, the club contends the promotional items are already subject to sales tax and should not be doubly taxed. It claims that the price of admission offsets the cost of the goods and their transfer is therefore a retail sale.

Section 77.51(24), Stats., provides, "With respect to the services covered by s. 77.52(2), no part of the charge for the service may be deemed a sale or rental of tangible personal property." The plain meaning of this provision is that no part of the Brewers' admission charge, for purposes of the sales or use tax, is allocable to a sale of the promotional items. The taxpayer contends that the purpose of sec. 77.51(24) is to prevent avoidance of a sales tax on a service rendered in connection with nontaxable personal property, a purpose not involved in this case because the service--admission to an athletic event--is taxable under sec. 77.52(2)(a)2. Perhaps a purpose of sec. 77.51(24) is as the club contends. The statutory language, however, is unambiguous as applied to the question before us. "When the statutory language is clear and unambiguous no judicial rules of construction...