Pourier v. South Dakota Department of Revenue

SABERS, Justice

(dissenting).

[¶ 18.] Upon the grant of the Attorney General’s Petition for Rehearing,2 the issue is which statute of limitation applies, if any, to an illegally collected, unconstitutional tax.

[¶ 19.] The Attorney General argues in the alternative, that:

1) the fifteen month statute of limitation of SDCL 10-47B-1413 applies; or
2) the three year statute of limitation of SDCL 10-59-194 applies; or
3) either the six year statute of limitation of SDCL 15-2-135 or Senate Bill 225 applies.

[¶ 20.] Pourier argues that no “period of statutory limitation can operate as a bar to the right to abate taxes which were illegally levied and assessed. Any tax which is illegal from the beginning cannot ripen into a legal tax by mere lapse of time.” Appellant’s Brief, pp. 10, 11 (citing Att’y Gen. Op. 302 (1949-50); Att’y Gen. Op. 53, 54 (1959-60); Att’y Gen. Op. 229, 231 (1971-72)). Pourier argues in the alternative that South Dakota’s six year statute of limitation applies to recover illegal taxes paid under duress.

[¶ 21.] We should accept Pourier’s argument in part and hold that South Dakota’s six year statute of limitation applies to recover illegal and unconstitutional taxes paid under duress for the following reasons:

1) These taxes were illegally and unconstitutionally imposed.
2) SDCL 10-47B-131.2, which was enacted by the South Dakota Legislature after all three of the other statutes of limitations (i.e., the 15 month statute of limitation, the 3 year statute of limitation, and the 6 year statute of limitation), provides in part:
*319A consumer of motor fuel or undyed special fuel may apply for and obtain a refund of fuel taxes imposed and paid to this state, if a state or federal court of final appeals finds that taxation of the purchase or use the fuel is preempted by federal law or unconstitutional.
(emphasis supplied). SDCL 10-47B-131.2 deals specifically with unconstitutional motor fuel taxes and supersedes the more general provisions.
3) In McKesson, the United States Supreme Court held:
If a State places a taxpayer under duress promptly to pay a tax when due and relegates him to a post payment refund action in which he can challenge the tax’s legality, the Due Process Clause of the Fourteenth Amendment obligates the state to provide meaningful backward looking relief to rectify any unconstitutional deprivation.
McKesson v. Division of Alcoholic Beverages and Tobacco, 496 U.S. 18, 31, 110 S.Ct. 2238, 2247, 110 L.Ed.2d 17, 32 (1990) (emphasis supplied).
4) Additionally, the State argues alternatively that should neither the fifteen month nor the three year statute of limitation apply, the Court should apply the statute of limitations enacted in Senate Bill 225 shortly after this Court’s decision in Pourier. Senate Bill 225 provides:
ENTITLED, An Act to limit the amount of time in which a recovery claim for certain paid taxes may be made and to declare an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
Section 1. That chapter 10-59 be amended by adding thereto a NEW SECTION to read as follows:
Unless a different limitation is prescribed by this title, a claim for recovery of any tax, penalty, ot interest shall be filed with the secretary within six years of the date the tax was due or paid, whichever date is earlier.6
Section 2. Whereas, this Act is necessary for the support of the state government and its existing public institutions, an emergency is hereby declared to exist, and this Act shall be in full force and effect from and after its passage and approval.

Senate Bill 225 was approved by the Governor and signed into law on March 25, 2003, to protect the State treasury from substantial tax refunds anticipated by the Attorney General to result from our holding in Pourier I.7 Although the enactment *320does not contain express words of retroac-tivity, it appears clear that the “emergency” was Fourier I and that Senate Bill 225 was intended to apply retroactively as the stopgap.

[¶ 22.] Therefore, consistent with this opinion and a 6 year statute of limitation, we should remand to the trial court with instructions to direct the Department to:

1) Determine the correct amount of the invalid tax (refund) that applies to purchases by Muddy Creek for its use on the reservation.
2) Determine, upon proper application, the correct amount of the invalid tax (refund) that applies to gas purchases from Muddy Creek by reservation Indian consumers.
3) Determine related questions, such as prejudgment interest.

. Pourier v. South Dakota Dept. of Revenue, 2003 SD 21, 658 N.W.2d 395 (Pourier I).

. SDCL 10-47B-141 provides:

Any claim for refund of motor fuel or special fuel tax shall be received by the department within fifteen months of the date the fuel was originally purchased in order to be accepted for refund. Fuel purchased more than fifteen months from the date the claim is received is forever barred from refund eligibility.

. SDCL 10-59-19 provides:

A taxpayer seeking recovery of an allegedly overpaid tax, penalty or interest shall file a claim for recovery with the secretary, within three years from the date the tax, penalty or interest was paid or within three years from the date the return was due, whichever date is earlier. A claim for recovery not filed within three years of the date the tax was paid or within three years of the date the return was due, whichever date is earlier, is barred.

.SDCL 15-2-13 provides in part:

Except where ... a different limitation is prescribed by statute, the following civil actions ... can be commenced only within six years after the cause of action shall have accrued:
(1) An action upon ... [an] obligation, or liability, express or implied,
... [.], or
(4) An action for taking, detaining, or injuring any goods or chattels, including actions for specific recovery of personal property[.]

. Enacted as SDCL 10-59-19.1.

. The Attorney General’s office argued at oral arguments, and in its brief that failure to impose a statute of limitation in this case would result in the State being forced to pay out refunds dating back to 1923, the year the State began imposing motor fuel taxes. However, the holding in Pourier was limited to its facts and the earliest possible claim would date only to 1995. Furthermore, this assertion by the State is inconsistent with the State’s previous argument that it imposed motor fuel taxes on Native Americans in reliance on the Hayden-Cartwright Act, which was not enacted until 1936.

This assertion is also inconsistent with the Attorney General’s letter to Pourier’s counsel dated June 11, 1999 which indicated that Pourier's claims were governed by the three year statute of limitation in SDCL 10-59-19.
Moreover, the assertion is inconsistent with the Attorney General’s concession that the refund claims made by Muddy Creek for the period of December 17, 1997 through December 31, 1999 were timely filed.
Finally, there is no evidence in the record regarding the State’s collection of motor fuel taxes aside from those collected by Muddy Creek.