No. 47 July 14, 2016 21
IN THE SUPREME COURT OF THE
STATE OF OREGON
DIRECTV, INC.,
Respondent,
v.
DEPARTMENT OF REVENUE,
State of Oregon,
Appellant.
(TC 4939 (Control); SC S061294)
En Banc
On appeal from the Oregon Tax Court,* and on motion
for entry of decision and appellate judgment.
Henry C. Breithaupt, Judge.
Submitted May 17, 2016.
Marilyn J. Harbur, Assistant Attorney General, Salem,
filed the brief and motion for entry of decision and appellate
judgment for appellant. With her on the brief was Ellen F.
Rosenblum, Attorney General.
Scott G. Seidman, Portland, filed the response to appel-
lant’s motion for respondent.
BREWER, J.
The decision of the Tax Court is reversed, and the case is
remanded to the Tax Court for further proceedings.
______________
* 21 OTR 90 (2013).
22 DIRECTV, Inc. v. Dept. of Rev.
Case Summary: Before the Tax Court, DIRECTV challenged the Department
of Revenue’s determination that property used by DIRECTV in its business
of providing satellite television services was subject to central assessment. It
argued, among other things, that the department had incorrectly concluded that
that DIRECTV’s services were “data transmission services” within the mean-
ing of ORS 308.505(3) and, thus, were subject to central assessment under ORS
308.515(h). The Tax Court agreed. Relying on the meaning it had assigned
to the term “data transmission services” in an earlier case, Comcast Corp. v.
Dept. of Rev., 20 OTC 319 (2013), the Tax Court granted summary judgment
for DIRECTV, set aside the department’s central assessment of DIRECTV’s
property, and ordered corrected assessments and tax refunds. The department
appealed and later moved for entry of a decision and appellate judgment in its
favor, based on the reversal of the Tax Court’s Comcast decision in Comcast Corp.
v. Dept. of Rev., 356 Or 282, 337 P3d 768 (2014) and on the definition of the term
“data transmission services” announced in that case: “services that provide the
means to send data from one computer or computer-like device to another across
a transmission network.” Held: DIRECTV’s services are “data transmission
services,” and therefore qualify as “communication” services subject to central
assessment under ORS 308.515(h).
The decision of the Tax Court is reversed, and the case is remanded to that
court for further proceedings.
Cite as 360 Or 21 (2016) 23
BREWER, J.
This is a direct appeal from a decision of the Oregon
Tax Court setting aside a determination by the Department
of Revenue (the department) that taxpayer DIRECTV’s prop-
erty in Oregon is subject to central assessment under ORS
308.505 to 308.665. The department argues that, contrary
to the Tax Court’s opinion, DIRECTV is a “communications”
business whose property is subject to central assessment
under ORS 308.515(1). We agree and, therefore, reverse and
remand.
DIRECTV is a satellite television provider; it trans-
mits video and audio data obtained under licenses from con-
tent providers to its subscribers via satellite. ORS 308.515(1)
provides for central assessment of any property in Oregon
used in certain kinds of businesses, including “communi-
cations.” For purposes of the statute, “communications”
includes “data transmission services.” ORS 308.505(3). The
department began to centrally assess DIRECTV’s property
in 2009, on the theory that DIRECTV was in the business of
providing “data transmission services” and therefore was a
“communications” business.
DIRECTV contested that decision, arguing, among
other things, that it did not provide “data transmission ser-
vices” as the term is used in ORS 308.505(3). The Tax Court
agreed, primarily based on a decision that it had issued ear-
lier, Comcast Corp. v. Dept. of Rev., 20 OTR 319 (2011). That
case involved a cable TV and internet service provider’s
challenge to the central assessment of its property under
ORS 308.515(1). The Tax Court held that, for purposes of
the definition of “communications” in ORS 308.505(3), “data
transmission services” means the transmission, for a fee, of
data or content owned by one party to another party, and
does not apply when a company sells the data or content—as
a commodity—to the customer, in addition to providing the
conduit for it. 20 OTR at 328-29.
Applying that definition from its Comcast deci-
sion in the present case, the Tax Court held that, because
DIRECTV had purchased licenses to transmit the audio
and video data at issue to its customers, it was not merely
acting as a conduit for data owned by other entities and,
24 DIRECTV, Inc. v. Dept. of Rev.
therefore, was not a “communications” business that is sub-
ject to central assessment under ORS 308.515(1). DIRECTV,
Inc. v. Dept. of Rev., 21 OTR 90, 92-93 (2013). The Tax Court
granted summary judgment to DIRECTV on that issue, set
aside the department’s central assessment of DIRECTV’s
property for the 2009-2010 through 2012-2013 tax years,
and ordered corrected assessments and tax refunds.
At the time of the Tax Court’s decision in this case,
the department’s direct appeal of the Comcast decision was
pending before this court. Since then, we have issued a
decision in the case. In Comcast Corp. v. Dept. of Rev., 356
Or 282, 337 P3d 768 (2014), we rejected the definition of
“data transmission services” that the Tax Court announced
in that case. We held that, for purposes of ORS 308.505(3),
“data transmission services” means “services that provide
the means to send data from one computer or computer-
like device to another across a transmission network.” Id.
at 315. We further held that that meaning applies “whether
the data that the customer receives is data directed to it
by the service provider itself or by some third party.” Id.
at 332. Applying that definition to the taxpayer’s claims
in that case, we held that the internet and cable transmis-
sion services that the taxpayer provided were, indeed, “data
transmission services,” and that the taxpayer therefore was
a “communications” business whose property was subject to
central assessment under ORS 308.515(1). Id. at 284.
Our decision in Comcast controls the present case.
Like the taxpayer in Comcast, DIRECTV undisputedly is
in the business of transmitting electronically coded data
between computer-like devices, including set top boxes.
See id. at 323 (“([i]n effect, a set top box is a computer or
computer-like device with a microchip in it that gives it
its functionality”). It is of no consequence that DIRECTV
licenses or owns the data it transmits; neither is it import-
ant that DIRECTV transmits data via satellite rather than
via cable. Id. at 314-15. DIRECTV provides “data transmis-
sion services” within the meaning of ORS 308.505(3), and
therefore it is a “communications” business that is subject
to central assessment under ORS 308.515(1). The Tax Court
was mistaken in concluding otherwise and in granting sum-
mary judgment to DIRECTV on that ground.
Cite as 360 Or 21 (2016) 25
Anticipating a decision in its favor, the department
has moved for entry of a decision and appellate judgment
that reverse the Tax Court’s decision without remanding to
the Tax Court for further proceedings. We deny that motion.1
The decision of the Tax Court is reversed, and the
case is remanded to the Tax Court for further proceedings.
1
The department argues that remand is not warranted because DIRECTV
has no arguments or claims that remain for consideration on remand. It argues
that, to the extent that DIRECTV raised claims and arguments before the Tax
Court other than the one expressly addressed in the Tax Court’s general judg-
ment, the effect of the judgment was to dismiss those claims with prejudice. The
department relies on ORS 18.082(3), which provides: “Upon entry of a general
judgment, any request for relief in the action that is not decided by the general
judgment * * * is dismissed with prejudice unless the judgment provides that the
dismissal is without prejudice.”
The department misunderstands how the cited statute operates in circum-
stances like these. When the Tax Court decided the threshold summary judg-
ment issue regarding the applicability of ORS 308.515(1) in DIRECTV’s favor
and entered a general judgment based on that decision, it implicitly determined
that DIRECTV’s remaining arguments were moot. The reversal of the Tax
Court’s general judgment reopens those arguments for further consideration.
Our decision in Comcast to remand for consideration of the taxpayer’s Measure
50 argument, after reversing the general judgment for the taxpayer based on the
meaning of “data transmission services,” is a case in point. 356 Or at 334 (“That
argument presents an issue that was moot under the Tax Court’s resolution of the
case, but is not moot under ours.”)