(dissenting).
I dissent.
The sole issue on appeal is whether the taxpayer is entitled to a deduction in computing the compensating tax owed pursuant to § 7-9-78, N.M.S.A.1978 Comp.- (§ 72-16A-15.1, N.M.S.A.1953 Comp.). This section provides in material part:
The value of tangible personal property, . . may be deducted in computing the compensating tax due if the person using the tangible personal property:
A. is engaged in a business which derives a substantial portion of its receipts from leasing, . . tangible personal property of the type leased; and
B. does not use the tangible personal property in any manner other than holding it for lease ... or leasing . it either by itself or in combination with other tangible personal property in the ordinary course of business. (Emphasis added.)
If the taxpayer’s customers “lease” the washers and dryers, the taxpayer is entitled to the deduction. If the taxpayer’s customers “use” the washing machines but the “use” does not constitute a “lease” within the meaning of the Compensating Tax Act, the taxpayer is not entitled to a deduction.
The term “leasing” is defined in the Compensating Tax Act, §. 7-9-3(J), N.M.S.A. 1978 (§ 72-16A-3(J), N.M.S.A.1953), as follows:
. “leasing” means any arrangement whereby, for a consideration, property is employed for or by any person other than the owner of the property;
In my opinion, regardless of the criteria established in this definition, the definition can only be applied if the transaction in question is shown to be an “arrangement.” While this term appears to be quite broad, it is subject to interpretation; and, where it affects a tax deduction, should be reasonably, but narrowly construed. McKee, General Contractor, Inc. v. Bureau of Revenue, 63 N.M. 185, 315 P.2d 832 (1957); EVCO v. Jones, 81 N.M. 724, 472 P.2d 987 (Ct.App.1970); cert. denied 81 N.M. 772, 473 P.2d 911 (1970); vacated 402 U.S. 969, 91 S.Ct. 1655, 29 L.Ed.2d 134, on remand 83 N.M. 110, 488 P.2d 1214 (Ct.App.1971); cert. denied 83 N.M. 105, 488 P.2d 1209 (1971).
An “arrangement” is “a mutual agreement or understanding,” Websters Third New International Dictionary (1976). Thus, in order to establish the existence of an “arrangement” between the taxpayer and customers using the washers and dryers, there must be a mutual agreement or understanding between the two. In this situation, taxpayer has no contact with the customers and does not even have knowledge of their identity. There is no evidence of a “mutual agreement” or “understanding.” Absent such an arrangement between identifiable persons, “leasing,” within the meaning of the Act, does not occur. Rather, the activity described herein is a “service” as defined in § 7-9-3(K), N.M.S.A.1978 (§ 72-16A-3(K), N.M.S.A. 1953 Comp.). The deduction therefore does not apply. See Boise Bowling Center v. State, 93 Idaho 367, 461 P.2d 262 (1969) for a helpful discussion of the nature of businesses which provide “a unique combination of goods and services.”
In Francom v. Utah State Tax Commission, 11 Utah 2d 164, 356 P.2d 285 (1960), interpreting a sales tax law imposing a tax upon charges for “laundry service,” the Court characterized this type of coin-operated laundry business as providing a “laundry service.” The business was like that of taxpayer in that customers performed all the manual labor in the washing and drying of their articles, and no attendant was on duty at the premises. In spite of these facts, the Court said:
Regardless of the fact that the actual manual operation or labor is performed by the customer, we are of the opinion that the plaintiffs are performing a “laundry service” within the meaning of the statute . . . . The mere fact that the plaintiffs have no attendant at the establishment does not mean that the plaintiffs are not performing a “service”. By making available to the public the machines necessary to the washing and drying of articles, they are performing a “laundry service”. 356 P.2d 285 at 286.
In his testimony at the hearing, Mr. Strebeck, president of taxpayer corporation, characterized his business as a “service” when he stated that “[w]e feel that that’s providing a service for the people that cannot afford a washer and dryer at home. .” Tape 312. Likewise, I would find that the taxpayer’s business is that of providing a “service” and therefore taxable under the Compensating Tax Act.-
The decision and order of the Director should be affirmed.