STATE OF WISCONSIN
TAX APPEALS COMMISSION
RONALD J. HERGERT, d/b/a
AERO EXPO CORPORATE SERVICE
Oshkosh, WI 54901,
WISCONSIN DEPARTMENT OF REVENUE
P.O. Box 8907
Madison, WI 53708-8907,
|DOCKET NO. 99-S-35
DECISION AND ORDER
DON M. MILLIS, COMMISSIONER:
This matter comes before the Commission on stipulated facts. Both parties have submitted briefs. Petitioner is represented by Dempsey, Magnusen, Williamson & Lampe, LLP, by Attorney Charles J. Hertel. Respondent is represented by Attorney Robert G. Pultz.
FINDINGS OF FACT
The Commission hereby makes the following findings of fact based upon the facts and exhibits stipulated by the parties:
1. During the period under review (1993 through 1997), petitioner advertised in aviation trade magazines to solicit individuals and business entities that were interested in renting homes in the Oshkosh area during the annual Oshkosh Experimental Aircraft Aviation Association Fly In (the "Fly In").
2. Petitioner solicited homeowners in the Oshkosh area who were interested in renting their homes out during the week of the Fly In. Petitioner advertised his business as the "Oshkosh Fly In Housing Specialists."
3. All rental contracts between homeowners and renters were supplied by petitioner on forms he developed and using petitioner's stationery. While these forms changed over time, in each contract petitioner was listed as a signatory and often as a party to the contract.
4. Petitioner obtained signatures of homeowners and renters through individual contact with each party. However, in almost every case homeowners and renters did not know each other and never met face-to-face.
5. No direct negotiations occurred between homeowners and renters concerning the terms of rental contracts. Petitioner negotiated the rental amounts with homeowners and renters.
6. Homeowners and renters each signed individual forms with petitioner prior to executing a final rental contract through petitioner that contained the signatures of petitioner, homeowner, and renter.
7. Petitioner unilaterally determined the fee he would charge and retain as part of each rental agreement.
8. Petitioner met with each renter to issue keys to the rental home. In most cases, keys were returned to petitioner, although on occasion the renter would leave the keys at the rental home.
9. In 1996, petitioner added a "no compete" clause to his rental contracts which required a $500 penalty if the homeowner and renter made independent rental arrangements with each other within 3 years of the contract executed by the renter and homeowner with petitioner.
10. Each renter paid petitioner the total amount of the rental price, and petitioner paid each homeowner an agreed upon amount for the rental.
11. Petitioner provided the following services or goods for an additional fee:
A. Catered food;
B. Commercial shipping services such as U.P.S.;
C. Fax and copy machines;
D. Rental cars;
E. Rollaway beds; and
F. Maid services.
12. During the period under review, petitioner paid the cost of one refund and was not reimbursed by the homeowner.
13. If homes required repair during the period of the rental, the renter was instructed to contact petitioner.
14. During the period under review, petitioner listed monies paid to homeowners as the "cost of goods sold" as a Schedule C expense.
15. On July 10, 1998, respondent assessed petitioner $9,721.50 in sales tax, plus interest and a late fee ($2,538.00). Petitioner filed a timely petition for redetermination which respondent denied. Petitioner filed a timely petition for review with the Commission.
16. In the event that petitioner is required to pay sales tax on his gross receipts at issue, then the parties stipulate that the amount of the assessment, including the late filing fee and accumulated interest, is correct.
CONCLUSION OF LAW
The transactions at issue are subject to the sales tax because petitioner is a person furnishing accommodations to the public who made lodging available to transients. Wis. Stat. § 77.52(2)(a)1.
77.52 Imposition of retail sales tax.
* * *
(2) For the privilege of selling, performing or furnishing the services described under par. (a) at retail in this state to consumers or users, a tax is imposed upon all persons selling, performing or furnishing the services at the rate of 5% of the gross receipts from the sale, performance or furnishing of the services.
(a) The tax imposed herein applies to the following types of services:
1. The furnishing of rooms or lodging to transients by hotel-keepers, motel operators and other persons furnishing accommodations that are available to the public . In this subdivision, "transient" means any person residing for a continuous period of less than one month in a hotel, motel or other furnished accommodations available to the public. In this subdivision, "hotel" or "motel" means a building or group of buildings in which the public may obtain accommo-dations for a consideration, including, without limitation, such establishments as inns, motels, tourist homes, tourist houses or courts, lodging houses, rooming houses, summer camps, apartment hotels, resort lodges and cabins and any other buildings or group of buildings in which accommoda-tions are available to the public, except accommodations, including mobile homes as defined in s. 66.058(1)(d), rented for a continuous period of more than one month and accommodations furnished by any hospitals, sanitoriums, or nursing homes, or by corporations or associations organized and operated exclusively for religious, charitable or educa-tional purposes provided that no part of the net earnings of such corporations and associations inures to the benefit of any private shareholder or individual. In this subdivision, "one month" means a calendar month or 30 days, whichever is less, counting the first day of the rental and not counting the last day of the rental. [Emphasis supplied.]
The primary issue presented in this case is whether petitioner is liable for sales tax on receipts for furnishing accommodations to the public in his dealings with homeowners and renters pursuant to section 77.52(2)(a)1 of the Statutes. We conclude that petitioner is liable for the sales tax for the provision of these accommodations.
Section 77.52(2)(a)1 imposes the sales tax on the "furnishing of rooms or lodging to transients by persons furnishing accommodations that are available to the public ." Petitioner's activities during the period under review clearly meet each element of this imposition statute.
Petitioner concedes that the rooms or lodging were furnished to "transients" who are defined as persons "residing for a continuous period of less than one month in a hotel, motel or other furnished accommodations available to the public." Wis. Stat. § 77.52(2)(a)1. These rooms or lodgings were available to the public. In fact, petitioner advertised the availability of these rooms or lodgings in national publications. The primary issue raised by petitioner is whether he is a hotelkeeper, motel operator or other person furnishing accommodations.
Petitioner argues that he cannot reasonably be considered a "hotelkeeper" or "motel operator." Petitioner continues to argue that he cannot be considered a "person furnishing accommodations" because, based on the principle of ejusdem generis, the general phrase "person furnishing accommodations" must be interpreted in light of the narrow categories of "hotelkeeper" and "motel operator" that precede the general phrase. Essentially, petitioner is arguing that because he is not included in two earlier narrow categories (i.e., hotelkeeper or motel operator), he cannot be included in the general category (person offering accommodations).
We reject petitioner's argument for three reasons. First, as we conclude below, the statute clearly and unambiguously covers petitioner's business. As such, it is unnecessary and inappropriate to resort to rules of statutory construction.
Second, petitioner's premise--that "hotelkeeper" and "motel operator" are narrow terms--is false. Hotelkeeper and motel operator are not defined in the statute, but "hotel" and "motel" are defined and in a very expansive manner:
In this subdivision, "hotel" or "motel" means a building or group of buildings in which the public may obtain accommodations for a consideration, including, without limitation, such establishments as inns, motels, tourist homes, tourist houses or courts, lodging houses, rooming houses, summer camps, apartment hotels, resort lodges and cabins and any other buildings or group of buildings in which accommodations are available to the public ... . [Emphasis supplied.]
Wis. Stat. §77.52(2)(a)1. Based on this definition, the houses rented out by petitioner fall within the definition of a "motel" or "hotel." Therefore, we cannot conclude that "hotelkeeper" and "motel operator" are sufficiently particular or specific to invoke the doctrine of ejusdem generis.
Third, even if petitioner does not fall under the definition of "hotelkeeper" or "motel operator," he certainly is a person "furnishing accommodations that are available to the public." There can be no doubt that these homes were accommodations and that they were available to the public.
Petitioner also argues that the sales tax liability should be borne by the homeowners, not petitioner. Petitioner argues that it is the homeowners who are "furnishing" accommodations and that petitioner is merely facilitating these transactions. Notwithstanding the homeowners' role, we hold that petitioner is furnishing the accommodations in these transactions.(1)
However, it is important to note that the sales tax is not imposed merely on persons who "furnish" services enumerated in section 77.52(2)(a). The sales tax "is imposed on all persons selling, performing or furnishing" the services described in section 77.52(2)(a). Wis. Stat. § 77.52(2)(intro). Assuming for the sake of argument that petitioner did not furnish the accommodations, there is no doubt that he sold services described in section 77.52(2)(a)1.
Respondent's action on the petition for redetermination is affirmed.
Dated at Madison, Wisconsin, this 8th day of January, 2001.
WISCONSIN TAX APPEALS COMMISSION
Mark E. Musolf, Chairperson
Don M. Millis, Commissioner
Thomas M. Boykoff, Commissioner
ATTACHMENT: "NOTICE OF APPEAL INFORMATION"
February 7, 2001 Appealed to Dane County Circuit Court(01CV0391)