Sales Tax State Activity Update - December 2004

2004 Recap of Lessor Case Law

Alabama
Laser Vision Centers, Inc. v. DOR The Taxpayer provided laser machines to ophthalmologists in Alabama. The ophthalmologists used the machines to perform laser eye surgeries. The primary issue is whether the Taxpayer is liable for lease tax on the machines. That issue turns on whether the transactions constituted leases as defined for Alabama lease tax purposes by Code of Ala. 1975, §40- 12-220(5). If the lasers are subject to lease tax, a second issue involves the computation of the taxable lease proceeds.View the full case: http://216.226.178.107/aljrules/03-1161.pdf Laser Vision Centers v. ADOR, Docket No. S. 03-1161. Oct 2004

U-Haul v. Johnson
Johnson rented a U-Haul trailer from Jim's Auto. Jim's Auto taxed Johnson's trailer rental using a sales-tax rate rather than the proper rental-tax rate, resulting in an overcharge of $3.36. Johnson paid the amount charged. A class action was initiated by Johnson on this issue. View the full case: http://www.wallacejordan.com/decisions/Opinions2004/1021726.pdf Supreme Court of Alabama, U-Haul, et al v. Johnson, { 1021726}, May 14,2004

Florida
FDOR v. Winn-Dixie Stores Inc
The Florida Department of Revenue ("DOR") asserted that the trial court erred in granting summary judgment wherein it concluded that a lease for computer equipment was not subject to documentary stamp taxes pursuant to section 201.08, Florida Statutes (2004). The DOR asserts that, pursuant to the statute and DOR's administrative rules interpreting the statute, taxes were appropriately assessed on the lease. View the full case: http://www.5dca.org/Opinions/OpinionFrameset.htm FDOR v. Winn-Dixie Stores, INC., et al., Case No. 5D03-3457, Oct 2004

Kentucky
LWD Equipment Inc. , v. Revenue Cabinet
This matter involves a procedural question and a substantive question. The substantive question and principal issue is whether LWD Equipment's regular leasing of equipment to its sister corporations constitutes an "occasional sale" within the meaning of KRS 139.070, in which event LWD Equipment's gross receipts from the transactions are exempt from Kentucky sales tax. The procedural question is whether the Board of Tax Appeals must be made a party to appeals from its own decisions to the circuit court. View the full case: http://www.kycourts.net/Supreme/SC_Opinions.shtm Supreme Court Of Kentucky 2002-SC-0329-DG & 2003-SC-0318 DG,June 17, 2004

Popplewell's Alligator Dock v. Revenue Cabinet
The Taxpayer rented houseboats to the public for recreation and vacation purposes. It collected and remitted sales and use taxes on the houseboat rentals to the Kentucky Revenue Cabinet (KRC), but it failed to remit taxes on the gasoline it sold for use in the houseboats . After an audit, the KRC assessed taxes against Alligator Dock for the gasoline it sold. Taxpayer contends that the gasoline sales were exempt from sales and use taxes. View the full case: http://www.kycourts.net/Supreme/SC_Opinions.shtm Popplewell’s Alligator Dock v. KRC [2001 – SC-0434-DG], June 3,2004

Ohio
Continental Leasing v. Tax Commissioner Taxpayer seeks refund of sales tax associated with items leased or sold to Efficient Channel Coding, Inc. Taxpayer contends the transactions were exempt from taxation and provided a blanket certificate of exemption. This exemption certificate was timely dated. However, it failed to specify a reason that the sales were not legally subject to the tax as required by R.C. 5739.02(B). The certificate listed the reason for exemption as ‘Equipment primarily used in Research and Development’. However, the statute does not exempt all equipment used in research. View the full case: http://bta.ohio.gov/04a443.pdf Continental Leasing Inc. v. Ohio Board of Tax Appeals {No. 2004-A-443} October 15,2004

Wisconsin
Brager v. Department Of Revenue
The Wisconsin Tax Appeals Board ruled that payments made for the purchase or lease of a motor vehicle through an employee/retiree new vehicle purchase/lease program are part of the dealer's gross receipts and are subject to sales tax. View the full case: http://www.wisbar.org/res/txap/p2004/02s213.pdf Brager Chrysler Plymouth Jeep Eagle v. Department Of Revenue, DOCKET NO. 02-S-213, October 12, 2004

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