Enterprise Leasing Company of New Orleans VS Michael Curtis, In His Capacity as Director of the Livingston Parish School Board, Sales Tax Division
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STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT 2007 CA 0354 ENTERPRISE LEASING CO OF NEW ORLEANS VERSUS MICHAEL CURTIS IN HIS CAPACITY AS DIRECTOR OF THE LIVINGSTON PARISH SCHOOL BOARD SALES TAX DIVISION Judgment Rendered On Appeal from the November 2 2007 Twenty First Judicial District Court In and For the Parish of Livingston State of Louisiana Docket No 107081 Honorable Robert H Morrison III Judge Presiding James M Gamer Counsel for Plaintiff Appellant Steven I Klein Enterprise Leasing Lauren L Hudson Orleans Co of New New Orleans Louisiana Robert R Rainer Counsel for Defendant Baton Michael Curtis in his Rouge Louisiana Appellee capacity as Director of the Livingston Parish School Board Sales Tax Division BEFORE GAIDRY McDONALD AND McCLENDON JJ McCLENDON J The plaintiff Enterprise appeals gross proceeds Enterprise derived from the lease defendant Michael Curtis or For the reasons New Orleans that determined that the court rental of automobiles includes any damage waiver CDW payments in his Capacity Parish School Board Sales Tax Division appeal of Company the judgment of the trial collected for collision amounts Leasing that follow we Director of the as Livingston Parish affirm in part The Livingston answered the in part and reverse amend FACTS AND PROCEDURAL HISTORY renting automobiles m parishes including Livingston Parish When renting an in Enterprise is engaged numerous Louisiana automobile from for responsibility elects customer damages The in this 25 212 01 in sales and collect sales nor assessment taxes 1 2003 taxes use on on remit sales matter taxes CDW damage for the audit option to to CDW purchase to the contractual provision 1 If the recover the rented automobile Enterprise was period from January assessed 1 2000 from its charge for rental of the automobile but did taxes penalties accept payments collected by Enterprise from its As for CDW payments Thereafter whether separate not result of the a 25 212 01 amount in sales Enterprise Louisiana Revised Statute 22 2091 3A defines or to when arose Enterprise paid under protest the interest and contract or the During the audit period in question Enterprise collected customers customers 31 the automobile for physical customer dispute through July to has customer purchase CDW Enterprise waives the right to from the the Enterprise damage the business of collision from filed suit damage or a part asserting waiver of a as that any motor vehicle rental agreement whereby the lessor agrees for a charge to waive any and all claims against the lessee for any damages to the rental motor vehicle during the term of the rental agreement 2 CDW plus payments are taxable and not additional interest reconventional amount Livingston Parish demand that included of ten percent of the On June 21 summary judgment 2005 amount Parish further alleged that attorney fees Enterprise filed was entitled to a cross judgment as a amount paid petition and filed a request for attorney fees in the Parish filed interest it and was taxes was summary judgment it reserved its it answered the contending that it was entitled the amount of the 2005 refund of the a due attorney fees for the collection of the 1 a Livingston law for the amount of the taxes Livingston requested not motion for a to judgment penalties paid matter as a under statutorily entitled partial of protest to reasonable due but that because for liability part of the motion for partial rights regarding this issue On September motion for summary judgment matter of law because CDW asserting that receipts are not taxable On June 21 irrelevant certain collection of the paragraphs from Enterprise tax at The motions the trial charges taxable are bodies The reasons the trial court court with for to not pursued a November 7 2006 the trial are granted Livingston Parish summary Parish that what determination of the court issued 3 that CDW judgment concluding was judgment done s filed by motion to by other taxing pending legal supplemental therefore motion for s additionally granted Livingston Parish Livingston irrelevant as petition in which Enterprise part of the gross proceeds of automobile rentals and agreeing was motion to strike matter judgment and denied the motion for Enterprise a heard and taken under advisement On October 24 issued court s filed authorities in Louisiana have taxing issue in this were Accordingly summary strike Livingston Parish also that certain other alleged 2006 2005 reasons issues On for judgment the regarding impose reasonable to attorney fees although it ruled in favor of Livingston Parish any attorney fees issue determining that it on the tax issue Judgment signed was on not was November 7 Enterprise 2006 appealed and Livingston Parish answered the appeal Thereafter this court the appeal should disposing of and then followed trial court judgment or a valid written judgment the leases rentals and motion filed refund of include any Enterprise judgment 2 On An interim order amounts 2007 having the amended an granting Livingston Parish court that the gross use proceeds derived from lease and rental collected for collision damage waiver subject summary including denial of Enterprise collision amounts The and denied Livingston on s judgment claim for amounts previously paid by also Parish granted Livingston Parish request for attorney fees s s customers to on as in the original ASSIGNMENTS OF ERROR 2 A appeal Enterprise raises the following assignments of error panel ofthis The court stated purported judgment which is included in the record grants the motion for summary judgment denies the plaintiffs motion for summary judgment and denies defendant s request for attorneys fees defendant s but does not set forth the relief derived by plaintiff from its that all of the gross proceeds customers within Livingston Parish are granted to lease and rental taxes and for subject against defendant for 25 212 01 4 i e judgment such motion to strike judgment On a amounts damage waiver payments and for interest judgment motion s to are judgment further denied the taxes why language not contain 14 May order cause previously paid under protest representing sales and as show a for the limited purpose of declaring by Enterprise 25 212 01 representing issued the judgment did generated by Enterprise The amended payments matter signed by the trial taxes and shall as motu dismissing the claims of Enterprise for summary or proprio be dismissed remanding the sign was not ex in favor of plaintiff and 1 The trial CDW charges motor committed court part of the by finding that the proceeds of rentals of error vehicles are gross The trial court committed 2 the sale of CDW by failing to find that incorporeal right is not subject to sales an error taxation 3 The trial court committed any doubt as to the of the taxpayer and 4 The imposition Louisiana In its s tax committed court trial evidence to the it denying to construe provisions in favor error court committed the tax treatment on taxing jurisdictions and Enterprise answer court erred in by failing by upholding percent penalty against Enterprise The Enterprise meaning of the sales against taxation trial of a 25 5 error by error striking by other of CDW s good faith appeal Livingston Parish contends that the trial seeks additional attorney fees for this also Livingston Parish statutory attorney fees appeal STANDARD OF REVIEW Appellate courts review summary judgments de criteria that govern the trial judgment is appropriate La 3 30 95 favored Guillory 653 So 2d 1152 and inexpensive shall be to 1155 mover is entitled accomplish the just LSA C C P properly granted only and admissions to no judgment 966B 5 genuine as a art if the on matter summary 5 procedure is speedy 966A 2 and A motion pleadings depositions file issue a same 94 1767 p The summary judgment to affidavits if any show that there is that the Interstate Gas Station determination of actions interrogatories using the consideration of whether s v construed for summary judgment is answers court novo as together with to of law the material fact and LSA C C P art DISCUSSION The function of statutory given to legislative Rental Anthony Crane So 2d 631 begin 634 with the acts rests 0115 legislature at p v 03 0115 4 859 So 2d at 634 3 p is the solemn interpretation of a 10 21 03 La primarily Anthony Crane 1 be Our supreme court 859 courts expression of legislative law involves art to branch of the government rules of statutory construction general intent LSA C C s judicial Fruge premise that legislation will and therefore the for the with the L P Under the interpretation and the construction the search Rental 03 recently explained When a law is clear and unambiguous and its application does not lead to absurd consequences the law shall be applied interpretation may be made in search of the intent of the Legislature La Civ Code art 9 2004 When the language of the law is susceptible of different meanings it must be interpreted as having the meaning that best as written and no further the purpose of the law and the words of law must be given their generally prevailing meaning La Civ Code arts conforms to 10 and 11 When the words of 2004 a law are ambiguous meaning must be sought by examining the context in which they occur and the text of the law as a whole and laws on the same subject matter must be interpreted in reference to each other La Rev Stat g 1 3 2004 La Civ Code arts 12 their and 13 Pumphrey Case citations omitted City v of New Orleans 05 979 pp 10 11 La 4 4 06 925 So 2d 1202 1209 10 Thus the with any starting point statute itself Louisiana Revised Statute 47 B There is hereby levied within this state property defined herein the l proceeds 3 Other pertinent LSA R S through applicable of each item a or 3 tax upon the article of levy sales and use tax statutes include LSA RS Livingston Section 2 02 ofthe City lease made rental follows as of the gross tangible personal applicable to local tax collectors 47 321 and 47 331 At the local level Springs 97 15 of the ordinances Parish School Board ordinances and Section 2 01 ofthe 6 or tangible personal of said tax to be of Denham Law Enforcement District ordinances statute provides At the rate of two per centum 2 derived from the lease or rental of 33 2841 language of the ordinances include Section 2 1 of Ordinance No Parish Council the as l 302B is the Livingston Section 2 01 of Livingston Parish property as defined herein where the lease or rental of such property is an established business or part of an established business business or 4 derived from separate purchase and transaction Thus not subject its real that all the vehicle there can be no Courts have looked Louisiana sales purely optional contract and thus is motor vehicle rental not a the sale of incorporeal right argues that which to use the statute receipts be taxed integral part of an indivisible Enterprise contract cannot the a motor contract vehicle separate the CDW because without the rental of CDW at the essence whether determining and and rental lease are an principal automobile lease transaction in a object the temporary possession of Livingston Parish further from the an part of the tangible personal however that pursuant asserts receipts which CDW as of not contends the sale of CDW is but rather the sale of legislature clearly intended that has rental are taxation to Livingston Parish including or integral part of the an Enterprise tangible personal property the lease the face of the rental on not payments clearly that the sale of CDW is Enterprise alleges purchase separately stated germane to the said or added Emphasis proceeds property is is incidental same argues that CDW Enterprise gross the tax Corp 418 So 2d 652 662 La 1982 Electrode leased technical App or the real object of the transaction is taxable under the a statutes of 5 1 Cir In McNamara v Electrode writ denied 420 So 2d 986 La equipment dimensionally stable anodes 4 Tangible personal property is defined in LSA RS 47 16 301 a and means and includes personal property which may be seen weighed measured felt or touched or is in any other manner perceptible to the senses Section 1 1 of the Livingston Parish ordinance adopts the definitions found in LSA R S 47 301 See also Section 1 19 of the City ofDenham Springs the Livingston Parish School Board and the Livingston Parish Law Enforcement District ordinances 5 us We note that the in resolving this cases cited hereafter do not involve the res nova issue 7 same taxing statute but assist m Louisiana technology Electrode was divisible and therefore that the sale of anodes was was argued that the without the technology worthless and therefore the merely incidental to the taxable non sale accompanymg of the This court determined tangible personal property the intangible item the technology tangible item and subject to taxation The court recognized that the true object of the lease contracts despite their labeling separate leases The was the lease of the anodes in legislature lease rental closely tax court stated Louisiana a sales use and has authorized the connected Otherwise enacting The as taxing of intangible rights tangible personal property items of to every contract would have be to closely scrutinized proportion of the money involved should be allocated to tangible personal property and what portion should be allocated to intangible rights to detennine what Electrode 418 So 2d at 662 See also International Feliciana Parish School Board 02 0648 p 6 So 2d 717 of tangible the real matter personal property a motor be made available with the lease or without the automobile lease CDW payments are Nor 847 East v 1 Cir 3 28 03 2d So 850 1235 object of the transaction is the lease vehicle rental of Clearly a separate the CDW from the principal lease lessor App 721 writ denied 03 1190 La 6 20 03 Similarly in this cannot La Co Paper can motor as CDW be merely incidental to the CDW vehicle can only Enterprise the CDW does not exist from another purchased the lease of the tangible property Nevertheless Services 3 31 04 382 So 2d 971 Inc Materials Enterprises Corp v CDW is not La an La Plaquemines 871 So 2d 1171 and 04 1152 cites the 9 3 04 cases App of McNamara 1 Cir 1980 writs denied 04 1093 La 9 3 04 integral part Patterson and Ponchartrain Parish Gov t 03 1444 882 So 2d 607 v La App 4 Cir 882 So 2d 606 in support of its argument that of the lease contract and therefore not taxable 8 However we find these Patterson the defendant leased arranged with drilling equipment determined that the court charge and Circuit detennined that the CDW is not retained the stated or to pay for any as protection SLP freight charges in its customers receipts any insurance provided through s which s was case sub judice it was to its vehicles a argument are a part of their lease agreement to P PEC AI Enterprise are and not taxable to sales personal accident supplemental liability argues that there is While SLP no reason does offer its Enterprise in P AI PEC and insurance are subject not offers Enterprise for the insurance third party Unlike Patterson and Ponchartrain in this differently products products the premiums charges for coverage Thus company it we find be without merit We note that in its Louisiana part of the sale necessary optional products which effects coverage to collects for these Enterprise a damages caused In addition to CDW personal customers two not the Fourth the vendor for also makes the argument that CDW receipts insurance CDW part of the CDW and third party a because it also offers other to treat not were For those payments taxes proceeds However in the tax base the parties contracted for CDW as use gross not freight charge by was This opted for CDW Enterprise charged for the Enterprise and were compensated in Patterson the transportation case separately not in Ponchartrain Similarly part of the sales provided by who customers was and therefore equipment of aggregate material transportation and therefore not a In matter present third party for the transportation of transportation charges taxable not a from the service for which it a derived from the rental of the rental distinguishable cases reasons for judgment the trial Collision Damage Waiver Law enacted in 1989 to address 9 LSA R S concerns court recognized 22 2091 1 et seq about sales of collision damage waivers to vehicle insurance renters who policies might provide the were unaware same that their coverage personal own Section 22 2091 10 provides The charged for the collision damage waiver by rates a licensee under this Part shall be exempt from insurance taxes and insurance taxation provided that sales taxes in effect in the locale of rental contract issuance remitted to the proper tax tax has imposed suggested on levying a tax recognized tax a new as tax i e the sales LSA R S 47 302A existing an provision in conclude that the we the on but rather did not create language proceeds of rentals gross Accordingly applied collected and authority We agree with the trial court that this Enterprise are proceeds gross derived from the lease rental of or tangible personal property clearly and unambiguously includes CDW payments and shall be applied as granted summary Therefore the trial court properly judgment in favor of Livingston Parish which determined that CDW payments for summary written are subject judgment to taxation and in which it sought a denying Enterprise refund of the taxes s motion on CDW payments it paid under protest Enterprise next for the amounts contends that it as due contends that the trial timely filed its was not led seek to to and Livingston Parish finding it liable on CDW sales impose were delinquent taxpayers regardless of not any sales tax on collect any sales owed in CDW tax on On the other hand impose mandatory penalties good faith 10 by other tax collectors not to contends that the ordinances Enterprise timely paid the taxes shown believe specifically instructed Enterprise sales of CDW that taxes on tax returns argues that it prior audits who either did or erred in paid under protest that represent penalties Enterprise payments court The trial court stated that the penalty provisions do not hinge faith finding of good any on We agree comparable Livingston Louisiana Revised Statute 47 1602A and the Parish ordinances mandatory imposition of penalties for the provide Louisiana Revised Statute 47 1602A in provides pertinent part When any taxpayer fails to make and file any return required to be made under the provisions of this Subtitle before the time that the return becomes delinquent or when any taxpayer fails timely to of Revenue the total remit to the amount of secretary of the Department tax that is due return on a which imposed in addition to any other specific penalty to be added to the tax he has filed there shall be penalties provided Emphasis added the Additionally pena ItIes taxing ordinances uniformly provide for mandatory 6 Finding construction exception applied good the to ambiguity no as for provisions 6 a Section 9 3 ofthe to faith in the Enterprise While error assessment of tax based by statute taxing exception and its the penalty to a narrow jurisprudential taxpayer on a the dealer is not of the month next part following use tax being following on or s good before the the month for which the annum interest upon said set by the Collector levied and collected within the thereof said interest to be the month next paid with said tax at a uniform rate of interest per for all sales and fractional no recognize we there shall be collected amount unpaid find the Livingston Parish ordinance provides 20th day due are we penalties If the amount of tax due twentieth language of computed from the month for which the tax Authority the first day are or of due until it is and in addition to the interest that may be so due there shall also be collected a penalty equivalent to five percent 5 for each thirty 30 paid days fraction thereof of delinquency not to exceed twenty five percent in aggregate of the tax due when such tax are not paid within or 25 days thirty 30 event of suit of the date the tax first become due and attorneys fees at the rate of ten aggregate of tax interest and See also Section 9 04 of the Board and the Livingston penalty Emphasis City ofDenham Springs the payable and in the lO of the percent added Livingston Parish School Parish Law Enforcement District ordinances 11 faith this do exception has only been applied in limited find said not in the trial enor stated in Turner 676 5 La p Corp applicable herein decision finding Enterprise liable for we find we no As penalties Parish School Bd of Parish of St Charles 97 v 5 Cir App 13 3 0086 La s Further Therefore to be exception court circumstances 10 12 97 704 So 2d 848 98 writ denied 850 713 So 2d 470 98 When the taxpayer fails to pay the taxes due penalties and costs of a necessary audit may be assessed by the tax collector against the taxpayer Whether good faith in failing to pay the taxes due the tax collector was required to expend time and money in auditing the taxpayer and discovering the shortage As provided by law the defaulting taxpayer whether in good faith or not must bear the burden of those expenses Accordingly Parish motion s also find we to strike no enor in the trial court 18 Paragraphs not enor or granting s 21 of through of Livingston Enterprise petition s regarding its defense of good faith In its court CDW answer failure s to to the of the trial complains award it attorney fees for the collection of the The trial court in its receipts Parish appeal Livingston supplemental reasons for taxes on judgment stated This Court determines that the combination of the nova are issue and Parish See BP Oil 651 was attorney fees s basically breaks collection there the in this a determination as to Since case ground new part of Enterprise Livingston this attempted with the Court determines that it is not reasonable to Plaquemines Parish Government 93 1109 La 9 6 94 2d So 1322 An award of penalties on summary judgment was reversed because was a genuine issue ofmaterial fact as to the taxpayer s good faith and the taxpayer Company entitled to McNamara situation a trial on v the issue 495 warranting through the department taxpayer that it McDermott denied Inc was v not liable Morrison faith Pierre s Fabrication and s decision that a paid the sales and use of revenue and taxation for the state sales tax 96 2337 La App 97 3055 97 3062 La 2 13 98 the trial court St Welding Inc v The supreme court recognized the equitable 2d So 1295 La 1986 the taxpayer relief from penalties but not the taxes or interest due where the state good on factors which should be considered in reasonable 7 presumed good faith res taxpayer 709 was taxes due 2d So 1 Cir 753 not liable for but than to Louisiana 12 in specifically question 7 11 97 754 705 informed the and J 2d So Ray 195 writs The First Circuit affirmed penalties where the taxpayer in incorrectly paid the taxes to Texas rather any attorney s fees in the case even though it has ruled in favor of Livingston Parish on the issue presented impose LSA R S 47 1512 provides The collector is authorized employ private counsel to to assist in the collection of any taxes penalties or interest due under this Sub title or to represent him in any proceeding under this Sub title If any taxes penalties or interest due under this title are referred to an attorney at law for collection an additional 10 centum paid by for attorney fees in the amount of ten per of the taxes penalties and interest due shall be charge the tax debtor The local ordinances shall and Emphasis at attorney fees Parish Thus to that 500 So 2d 397 401 court submitted its fees the 10 La patiies of Enterprise appellate ten as court subject Rouge In this matter reasons for on to avoid to award liability s we are reVIew for judgment a judicial Stauffer Chemical Co the same day that the trial judgment regarding attorney to Livingston shall contend in this award we percent of the 25 212 01 to amount Parish court legal services or in 8 of this matter Because the See Section 9 04 ofthe School Board 2 521 20 attorney fees stipulation included legal work City of Denham Springs District ordinances and Section 9 3 of the Parish Council ordinance 13 an rendered in Livingston Parish as neither Lastly Livingston Parish requests additional attorney fees for appeal for Livingston of the statute to v delinquent s in the event the Court would award ten attorney fees Accordingly mandatory language Enterprise failing that such fee is unreasonable for the district court which is 1987 s language of Baton Livingston Parish nor comi City are stipulated that 25 212 01 erred in portion of the trial supplemental had statute clear attorney fees reasonableness of the fee the use due is insufficient court Given the reverse Nevertheless state taxes the trial attorney fees constrained issue herein also generally mirror the payment under protest of the added at the only and Law Enforcement the trial court level we find that Livingston Parish by an amount an increase in the award of attorney fees I OOO is of appropriate for this to appeal CONCLUSION For the above and trial court Livingston Parish of the trial and award it s All s motion s to of this AFFIRMED to judgment of the motion for summary The strike is also affmned We attorney fees at the trial Parish in the appeal assessed are PART 14 granting reverse of that Parish attorney fees court amount level We also 1 000 for this of against Enterprise REVERSED AMENDED and judgment judgment Livingston IN affirm the judgment denying Livingston 2 521 20 for costs s we motion for summary court award attorney fees appeal reasons granting Livingston Parish denying Enterprise portion foregoing IN PART AND
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