Acxiom Corp. v. Leathers

ACXIOM CORPORATION v. Timothy LEATHERS,
Commissioner of Revenues, Department of
Finance and Administration, State of Arkansas

97-408                                             ___ S.W.2d ___

                    Supreme Court of Arkansas
               Opinion delivered January 29, 1998


1.   Taxation -- time limitations for refunds -- Arkansas Enterprise Zone Act
     silent on when claim must be filed. -- Neither the General Assembly
     nor the Department of Finance and Administration has
     prescribed, by statute or regulation, a limitations period in
     which a claim for an Enterprise Zone refund must be filed;
     Enterprise Zone statutes and regulations themselves do not
     contain a limitations provision or impose any type of "due
     date"; unlike other statutes that provide for tax refunds, the
     Enterprise Zone Act is silent on the question of when the
     Enterprise Zone refund claim must be filed.

2.   Taxation -- time limitations for refunds -- Ark. Code Ann.  26-18-
     306(i)(1) does not supply standard for determining whether Enterprise Zone
     claim is timely filed. -- Although appellant filed its refund form
     after the expiration of the two- or three-year limitations
     periods prescribed by Ark. Code Ann.  26-18-306(i)(1) (Repl.
     1997), the supreme court held that the statutory section, by
     its terms, does not supply the standard for determining
     whether an Enterprise Zone refund claim is timely filed; only
     an "amended return" or a "verified claim for credit or refund
     of an overpayment of any state tax for which the taxpayer is
     required to file a return" is required to be filed within the
     periods contained in  26-18-306(i)(1); an Enterprise Zone
     refund form is included in neither of those categories.

3.   Taxation -- refund claim -- Enterprise Zone form does not amend or modify
     any other tax return. -- Although the Enterprise Zone tax-refund
     form may qualify as a "return" under the Tax Procedure Act,
     Ark. Code Ann.  26-18-104(11)(Repl. 1997), it is not an
     "amended return" under Ark. Code Ann.  26-18-306(i)(1)
     because it does not literally "amend" or otherwise modify a
     tax return previously filed by the refund claimant; rather,
     the form is a separate and independent return by which a
     participant in the Enterprise Zone program asserts a claim to
     the refund authorized by Ark. Code Ann.  15-4-807(a) and 15-
     4-1704(a).

4.   Taxation -- refund claim -- Enterprise Zone form is not claim for tax
     credit. -- The Enterprise Zone tax-refund form cannot be viewed
     as a "verified claim for credit or refund of an overpayment of
     any state tax for which the taxpayer is required to file a
     return" under Ark. Code Ann.  26-18-306(i)(1); the form is a
     claim for a tax refund, not a tax credit; most of the refunds
     claimed on appellant's form were for taxes for which appellant
     was not even required to file a return; no claim on the form
     requested a refund for an "overpayment" of any tax.

5.   Taxation -- refund claim -- Enterprise Zone form may be filed at any time.
     -- Given the principle that time limitations during which a
     claim may be asserted exist only to the extent that they are
     created by statute, the supreme court held that, under
     existing law, an Enterprise Zone tax-refund form may be filed
     at any time.

6.   Taxation -- refund claim -- no limitations provision applicable --
     appellant's claim timely filed -- chancellor's order reversed and remanded.
     -- The supreme court held that because no limitations
     provision was applicable, appellant's refund claim was timely
     filed and should not have been dismissed; the court reversed
     the chancellor's order ruling the claim barred by Ark. Code
     Ann.  26-18-306(i)(1) and remanded the case for proceedings
     consistent with the opinion.


     Appeal from Pulaski Chancery Court; Robin L. Mays, Chancellor;
reversed and remanded.
     Roy D. Smith and Shayne D. Smith, for appellant.
     Martha G. Hunt, Revenue Legal Counsel, for appellee.

     David Newbern, Justice.
     This is a tax-refund case.  Appellant Acxiom Corporation filed
a request with the appellee Department of Finance and
Administration ("Department") in September 1995 for a refund in the
amount of $593,864.36, for certain sales and use taxes it had paid
during the third quarter of 1988 through the fourth quarter of
1990.  The Department refunded $1,192.98, for the taxes paid by
Acxiom in the fourth quarter of 1990.  The Department denied the
remainder of Acxiom's refund claim on the ground that the claim was
barred by a statute of limitations.  The Chancellor affirmed the
Department's decision and ruled that Acxiom's refund claim was
barred by Ark. Code Ann.  26-18-306(i)(1)(Repl. 1997).  We reverse
the Chancellor's ruling and hold that Acxiom's claim was not
subject to any limitations provision and was thus timely filed.
     Acxiom's tax-refund claim was based on the Arkansas Enterprise
Zone Act of 1989.  The 1989 Act expired on June 30, 1995, and was
effectively superseded by the Arkansas Enterprise Zone Act of 1993,
Ark. Code Ann.  15-4-1701 to 15-4-1708 (Repl. 1994 and Supp.
1997).  The 1989 Act entitled a "qualified business" to "a refund
of sales and use taxes imposed by the state . . . on the purchases
of the material used in the construction of a building or
buildings, or any addition or improvement thereon, for housing any
legitimate business enterprise, and machinery and equipment to be
located in or in connection with such building."  Ark. Code Ann. 
15-4-807(a) (Repl. 1994).  The 1993 Act contains a similar
provision.  See Ark. Code Ann.  15-4-1704(a)(Repl. 1994 and Supp.
1997).
     It is not disputed that Acxiom was certified under the
Enterprise Zone program in September 1988 and is thus a "qualified
business" under the statute.  It also is not disputed that the
taxes for which Acxiom sought an Enterprise Zone refund had been
imposed on qualified purchases.  The dispute below, and on appeal,
concerns whether Acxiom timely filed its EZP 1000, the form on
which a claim for an Enterprise Zone refund is made.
     We agree with Acxiom that neither the General Assembly nor the
Department has prescribed, by statute or regulation, a limitations
period in which a claim for an Enterprise Zone refund must be
filed.  It is undisputed that the Enterprise Zone statutes and
regulations themselves do not contain a limitations provision or
impose any type of "due date."  Unlike other statutes that provide
for tax refunds, the Enterprise Zone Act is silent on the question
of when the Enterprise Zone refund claim must be filed.  See, e.g.,
Ark. Code Ann.  26-51-604(b)(Repl. 1997)(requiring claim for
"senior citizen" property-tax refund to be filed "on or before
August 15 of the year next following the year in which the
homestead ad valorem property taxes used as a basis for the claim
were paid").
     Given the absence of any limitations provision in the
Enterprise Zone statutes and regulations, the question becomes
whether some other statute of limitations applies to Enterprise
Zone refund claims.  
     Section 26-18-306(i)(1), the law applied by the Chancellor to
bar Acxiom's claim, is a part of the general Arkansas Tax Procedure
Act.  It provides as follows:

     An amended return or verified claim for credit or refund
     of an overpayment of any state tax for which the taxpayer
     is required to file a return shall be filed by the
     taxpayer within three (3) years from the time the return
     was filed or two (2) years from the time the tax was
     paid, whichever of the periods expires the later.

     There is no dispute that Acxiom filed its EZP 1000 form after
the expiration of the limitations periods prescribed by  26-18-
306(i)(1).  We hold, however, that  26-18-306(i)(1), by its terms,
does not supply the standard for determining whether an Enterprise
Zone refund claim is timely filed.  Only an "amended return" or a
"verified claim for credit or refund of an overpayment of any state
tax for which the taxpayer is required to file a return" is
required to be filed within the periods contained in  26-18-
306(i)(1).  An EZP 1000 form is included in neither of those
categories.
     First, as counsel for both parties agreed during oral
argument, the EZP 1000 is not an "amended return."  Although the
EZP 1000 form may qualify as a "return" under the Tax Procedure
Act, Ark. Code Ann.  26-18-104(11)(Repl. 1997), it is not an
"amended return" because it does not literally "amend" a return
previously filed by the refund claimant.  Rather, the EZP 1000 is
a separate and independent return by which a participant in the
Enterprise Zone program asserts a claim to the refund authorized by
 15-4-807(a) and 15-4-1704(a).  The EZP 1000 does not amend or
otherwise modify any tax return previously filed by the Enterprise
Zone participant.
     Most of the taxes for which Acxiom sought an Enterprise Zone
refund were sales taxes paid pursuant to Ark. Code Ann.  26-52-
501 to 26-52-520 (Repl. 1997), or vendor use taxes paid pursuant to
Ark. Code Ann.  26-53-101 to 26-53-139 (Repl. 1997).  Under those
statutes, the vendor, rather than a taxpayer such as Acxiom, files
the return for sales and vendor use taxes.  Thus, Acxiom could not
have filed an "amended return" with respect to sales and vendor use
taxes because it never filed a return on those taxes in the first
instance.  We recognize that Acxiom also sought an Enterprise Zone
refund for consumer use taxes and that Acxiom was required to file,
and did file, returns on those taxes.  Thus, while it is possible
for Acxiom to have filed a return "amending" a previously filed
consumer use tax return, the fact remains that an EZP 1000 is not
a return that could "amend" a consumer use tax return previously
filed by the Enterprise Zone participant.
     Second, the EZP 1000 cannot be viewed as a "verified claim for
credit or refund of an overpayment of any state tax for which the
taxpayer is required to file a return."  The EZP 1000 form is a
claim for a tax refund, not a tax credit.  And, although the EZP
1000 asserts a claim for a refund, the requested refund is not for
an "overpayment of any state tax for which the taxpayer is required
to file a return."  As mentioned previously, most of the refunds
claimed on the EZP 1000 were for taxes for which Acxiom was not
even required to file a return.  No claim on the EZP 1000 
requested a refund for an "overpayment" of any tax.  The taxes for
which Acxiom sought a refund were not taxes that it had "paid in
excess of the amount required to be paid under the particular state
tax law in question."  Ark. Code Ann.  26-18-104(8)(Repl. 1997). 
     We must conclude that the EZP 1000 is not the type of filing
to which  26-18-306(i)(1) applies.  That statute, therefore, does
not supply the standard for determining whether an EZP 1000 is
timely filed.  Neither the parties' briefs or oral arguments, nor
our own research, has led us to any other potentially applicable
limitations provision.
     Thus, given the principle that "[t]ime limitations during
which a claim may be asserted exist only to the extent that they
are created by statute," Estate of Escher, 94 Misc.2d 952, 407 N.Y.S.2d 106, 109 (N.Y. Surr. 1978), aff'd sub nom., In Re Escher's
Will, 75 A.D.2d 531, 426 N.Y.S.2d 1008 (N.Y. A.D. 1 Dept. 1980),
aff'd sub nom., Matter of Gross, 438 N.Y.S.2d 293, 420 N.E.2d 91
(N.Y. 1981); see People ex rel. Schick v. Marvin, 249 A.D. 293, 292 N.Y.S. 93, 98 (N.Y. A.D. 4 Dept. 1936), aff'd, 275 N.Y. 587, 11 N.E.2d 767 (N.Y. 1937); New York State Labor Rel. Bd. v. Wyckoff
Hts. Hosp., 59 Misc.2d 284, 298 N.Y.S.2d 576, 582 (N.Y. Sup. Ct.
1969)(stating "the court does not have the power to introduce and
enforce" a limitations period "[i]n the absence of a statutory
provision"); Shewbrooks v. A.C. and S. Inc., 529 So. 2d 557, 564
(Miss. 1988)("Limitations on the time within which an action must
be brought are created by statute only.  They are legislative, not
judicial acts."), we hold that, under the law as it now exists, an
EZP 1000 may be filed at any time.  See Hauenstein v. Lynham, 100 U.S. 483, 488 (1879)("A party entitled can sue whenever he chooses
to do so, and he is clothed with all the rights of any other
litigant asserting a claim where there is no statute of limitation
applicable to the case.").
     As no limitations provision was applicable in the case at
hand, Acxiom's refund claim was timely filed and should not have
been dismissed.  We therefore reverse the Chancellor's order and
remand the case for proceedings consistent with this opinion.
     Reversed and remanded.