Catholic Archdiocese of Denver v. City & County of Denver

LOHR, Justice,

concurring in part and dissenting in part:

I concur in Parts II-A and III of the majority opinion. I dissent, however, from Part II-B of that opinion, in which the majority invalidates a sales tax assessment for vending machine sales of fifteen-cent daily newspapers. I believe that Denver’s retail sales tax ordinance clearly contemplates that newspaper publishers will be assessed a tax on the gross receipts from all retail sales, including those sales of fifteen-cent daily newspapers from vending machines.

I.

A.

Basic principles of statutory construction guide an inquiry into the issues presented in this case. A legislative enactment, whether it be a statute or an ordinance, “should be construed in a manner that renders it effective in accomplishing the purposes for which it was enacted, ... and the meaning of any one section must be gathered from a consideration of the entire legislative scheme_” State Department of Revenue v. Adolph Coors Co., 724 P.2d 1341, 1348 (Colo.1986) (Quinn, J., dissenting) (citations omitted). Accord, e.g., *341Safeway Stores, Inc. v. Smith, 658 P.2d 255, 259 (Colo.1983); R & F Enterprises, Inc. v. Board of County Comm’rs, 199 Colo. 137, 606 P.2d 64 (1980). Furthermore, we must construe the enactment so as to give consistent and harmonious effect to all of its terms. People v. District Court, 713 P.2d 918, 921 (Colo.1986); Paxson v. Cresson Mining Co., 56 Colo. 206, 212, 139 P. 531, 533 (1913). With these principles in mind, I turn to what I believe to be the proper construction of Denver’s retail sales tax ordinance with respect to sales of fifteen-cent daily newspapers from vending machines.

B.

Code § 166.41 levies the retail sales tax at issue in this case. That section provides:

Taxable Items. There is levied and there shall be collected and paid a tax in the amount stated in this article, as follows: 4.1 On the purchase price paid or charged upon all sales and purchases of tangible personal property at retail.

(Emphasis added.) Some services and commodities are explicitly exempted from this tax by Code § 166.5, and all of these exemptions are described by the subject matter, rather than the amount, of the sale.

The taxation rate is established by Code § 166.7, which provides that "[ejvery retailer shall, irrespective of other provisions of this article, be liable and responsible for the payment of an amount equivalent to three percent (3%) of gross taxable sales made by him of commodities or services specified in this article....” (Emphasis added.) “Gross taxable sales” is defined in Code § 166.2-12 as “the total amount received ... from sales and purchases at retail....”

Therefore, it is clear from the plain language of the ordinance that a retailer is liable in the amount of three percent of the gross amount received from all retail sales of tangible personal property not exempted by Code § 166.5. “Retail sales” are defined as all sales that are not “wholesale” sales. Code § 166.2-6. It is not disputed that vending machine sales of fifteen-cent daily newspapers do not fall within the ordinance’s definition of wholesale sales as contained in Code § 166.2-4. Such sales are therefore “retail sales” and, because they are not classified as exempt from the tax under Code § 166.5, the retailer is liable for three percent of the total amounts received from such sales.

The majority, however, relies on the “tax schedule” set forth in Code § 166.8 to conclude that a retailer is not liable for a tax on retail sales of eighteen cents or less, including vending machine sales of fifteen-cent daily newspapers. This result is not required by Code § 166.8 and in fact flies in the face of the plain language of those ordinance sections set forth previously, which specifically levy and determine the amount of the tax.

When the ordinance is viewed as a whole, it is apparent that the tax schedule set forth in Code § 166.8 is merely a specification of the amount of tax to be charged by retailers to purchasers for sales at particular prices — it does not alter the retailer’s tax liability. Indeed, the tax schedule’s purpose of assisting the retailer is apparent from the face of the ordinance. The schedule directs the retailer to “round down” the tax charged to the nearest whole number when application of the three percent tax rate results in a given number of cents plus a fractional cent of less than .55. Conversely, the retailer must “round up” the tax when the tax rate yields a fractional .55 cents or more. For example, a retailer is to charge a tax of one cent on a sale of $.51, when the three percent tax rate yields an actual tax of 1.53 cents. The schedule directs the retailer to charge a tax of two cents on a sale of $.52, when the tax rate yields an actual tax of 1.56 cents. In the former case, the tax is rounded down to one cent; in the latter case, the tax is rounded up to two cents. The schedule states that no tax is charged on sales of less than eighteen cents, because the actual tax on $.18 is .54 cents. Consistent with the formula established by the City Council, the tax is rounded down to the nearest whole number, resulting in a tax of 0. The schedule therefore represents a system of averaging and relieves purchasers and re-*342tailors from paying and remitting fractional cents.

Code § 166.8 cannot be read to insulate the retailers from the assessment of a three percent tax on gross sales of items priced under eighteen cents. The section simply states that, when establishing the amount of tax to be collected from a purchaser, a retailer must comply with the tax schedule of Code § 166.8. It does not alter the retailer’s liability for tax on those sales, since Code § 166.7 explicitly states that the retailer is liable for three percent of gross taxable sales, meaning the total amount of all retail sales not exempted by Code § 166.5, “irrespective of other provisions of this article_” (Emphasis added.) If the retailer, acting as the City’s collection agent and pursuant to the tax schedule contained in Code § 166.8, collects more than three percent, it must pay the excess over to the city. Code § 166.8-2. If, however, it collects less than three percent, it is still liable for that three percent pursuant to Code § 166.7. Thus, irrespective of the tax schedule set forth in Code § 166.8, the publishers in this case are liable for three percent of the gross amount of all vending machine sales of fifteen-cent daily newspapers.

II.

In light of the clear intent of the legislative body to tax all retail sales not specifically exempted by Code § 166.5, I would hold that the publishers in this case are liable for three percent of the total amount received from all sales of fifteen-cent daily newspapers. Any ambiguities in the ordinance can be readily resolved by harmonizing the various sections to give effect to the entire ordinance consistent with its purpose. Accordingly, I would uphold the assessment against the publishers for vending machine sales of fifteen-cent daily newspapers.

MULLARKEY, J., joins in this partial concurrence and partial dissent.

. Denver, Colo. Revised Municipal Code (1950) (Code), § 166.4.