Smith v. Magras

WEIS,

dissenting

The Territorial Court and the Appellate Division of the District Court of the Virgin Islands read the licensing provisions as a whole and construed them to be generally directed to business entities, partnerships, and corporations, rather than to individual employees. I agree and would affirm.

The statute says in very broad terms that "[e]very person or association wishing to engage in any business, occupation, profession, or trade listed in § 302" must obtain a license. VI. Code Ann. tit. 27, § 301(a) (1997). In turn, § 302 lists several hundred occupations, services, professions, and callings, including such diverse classifications as itinerant vendors, judo instructors, machine *484shops (but not machinists), masonry contractors (but not masons), master plumbers, modeling agencies (but not models), pharmacies (but not pharmacists), public accountants, and attorneys. Section 302 includes restaurants classified by the number of tables, but does not list cooks or waiters.

The fees for § 302 licenses range from $10 for a temporary barber to $2,000 for business management or consulting firms representing 100 or more foreign service corporations. As a catchall, § 302(b) provides that "[a]ny person or association engaged in a business, occupation, profession, or trade" not listed "or not covered by any other provision of this Code shall obtain an annual license at a fee of $100."

Despite the majority's view to the contrary, the statute, on its face, applies to every person who receives compensation from an "occupation" as well as to those individuals who engage in a business, profession, or trade. The only exemptions are those specified in § 306 for governmental, religious, charitable, benevolent, and educational organizations.

Despite the broad language in §§ 301 and 302, the government does not contend that the licensing statute was intended to cover such an all encompassing swath of the working population. Indeed, the government disclaims such an expansive interpretation. The simple language construction adopted by the majority, therefore, has been rejected by the licensing body itself.

From the record, it appears that the government has not enforced the wording of the catchall clause, rather it has pursued a policy of licensing business entities instead of their employees. For example, the Territorial Court observed that, in a prior proceeding, an official of the Consumer Service Administration (entrusted with enforcement of the statute) testified that although travel agents are listed in § 302, they "are not required to be licensed, unless they possess an ownership interest in the business for which they work, because they are not professionals, but merely employees." Smith v. Magras, Civ. No. 167/1993, 1993 WL 566406 at *5 (Terr. Ct. V.I. Dec. 17, 1993).

The statute itself, in §§ 301(b) and (c), requires that an application for a license be made on a form furnished by the Commissioner of Licensing and Consumer Affairs. Applicants must pro*485vide information about their personal history, experience, business record, and criminal record. In designating who should submit .applications, § 301(b) states that "[i]n the case of corporations or partnerships the preceding requirements" apply to "all of the shareholders or partners." In all cases, "such requirements shall be applicable to the actual owners and not merely to the nominal owners." Id.

Significantly, employees of corporations and partnerships are not listed among those who must submit information. Thus, in the case of a corporation, as the statute reads, a shareholder must submit personal data, but the president, who is merely an employee, need not. Similarly, as to partnerships, the statute makes no mention of "employee." Subsection 301(c), however, provides that a corporation or partnership application "shall designate each member, officer, or employee who will exercise the powers to be conferred by the license upon such partnership or corporation." This subsection does not in any way require an employee to apply for a license.

Although the Commissioner now takes the position that all lawyers in private practice must pay the license because it is personal to them, that principle has not been consistently applied. As the district court noted, in the past, the Commissioner had not required an attorney to pay a licensing fee "unless the attorney had an ownership interest in the law partnership or corporation by which she was employed." Magras v. Smith, 940 F. Supp. 124, 129 (D.C.V.I. 1996).

To adopt the Commissioner's current position that a license is personal would mean that an automobile mechanic who is employed by a repair shop (which must be licensed under § 302(a)) must also obtain a license for his occupation or trade under § 302(b). Similarly, a carpenter employed by a large construction firm would have to obtain an individual license, as would a clerk in a retail establishment. That, however, is not what the Commissioner's practice is, or has been.

The Commissioner's litigation posture in an earlier case in this Court is revealing. Section 306 exempts "agencies of the Virgin Islands or of the United States Government, [ ] religious, charitable, benevolent, or educational associations." Significantly, that section *486does not mention "employees" of such institutions. However, in Hollar v. Government of the Virgin Islands, 857 F.2d 163, 171 (3d Cir. 1988), the government argued that because they are merely employees of various agencies, government attorneys fall under the blanket exclusion.

Additionally, the Commissioner contended that government attorneys were only employees because their pre-determined salaries did not depend on the attorneys' caseload or success rate. See Smith, 1993 WL 566406 at *4 (discussing the Commissioner's arguments in Hollar). That latter comment, of course, is irrelevant and, in any event, may well be said of an associate attorney employed by a law firm.

To be consistent, the Commissioner's position that an attorney working for a government salary is an employee and, as such, not subject to the tax, should carry over to an employee lawyer of a law firm who similarly should not be obligated to obtain a license. The exemption of employee lawyers is what the government successfully advanced in Hollar and that status should apply to plaintiffs here as well.

The district court's conclusion that the statute should be construed to apply only to partners in law firms or sole practitioners who have a proprietary interest is, I believe, the proper reading. The district court's construction pays due fealty to the canon of construing the statute as a whole, gives due regard to the government's consistent application over the years, and results in a rational interpretation of the legislation. I would affirm.

APPENDIX

§ 302 Same; business, occupations, professions and trades covered; fees

(a) The following annual license fees are made applicable to and shall be levied upon all persons and associations engaged in the designated businesses, occupations, professions and trades in the Virgin Islands of the United States:

Additional place of brokers business $ 50

Advertising 150

Air cargo transportation 500

*487Air charter service per plan $ 100

Air conditioning and refrigeration repair shop 125

Answering service 75

Apartment house A, more than 12 units 250

Apartment house B, 9-12 units 220

Apartment house C, 5-8 units 150

Apartment house D, 4 or less units 100

Appliance repair shop 100

Appraiser 100

Armored car service 300

Artist studios 100

Astrology service 100

Attorney 500

Auto cleaning and polishing service 100

Automobile towing service 100

Automobile undercoating 100

Automotive inspection and diagnostic services 100

Automobile mechanical road service 100

Baby sitting service 100

Baggage, cargo, mail handling 225

Bakery 200

Barber 50

Barber apprentice 25

Barber shop initial issuance 150

Barber shop renewal 75

Barber temporary 10

Battery and ignition repair 100

Beach club 100

Beautician apprentice 30

Beautician temporary 10

Beauty school 200

Beauty shop initial issuance 150

Beauty shop renewal 75

Billiard table per table 30

Blasting service 150

Blender, bottler of alcohol beverages 800

Boat building and repair 125

Boat charter service per boat 100

*488Boat rental $ 100

Bookkeeping services 100

Bowling alley 300

Bus transportation per bus 50

Business and management consultant 300

Business courses and related training 250

Business Management or Consulting Firm for Foreign

Sales Corporations:

Firms managing or consulting for less than 5 Foreign Sale Corporations 500

Firms managing or consulting for at least 5 but less than 100 Foreign Sales Corporations 1,000

Firms managing or consulting for 100 or more Foreign Sales Corporations 2,000

Butchery 300

Cable car sightseeing tours 125

Cable splicing and related work 150

Cable television and antenna service 150

Car leasing 100

Car Rental A— 0 to 20 vehicles 200

Car Rental B— 21 to 50 vehicles 300

Car Rental C— more than 50 vehicles 400

Carpentry contractor 75

Carpet laying and related services 125

Catering service 100

Certified public accounting 300

Charm school 100

Check room service 50

Claim adjusters 150

Clinical laboratory 300

Club liquor license 200

Cockfighting 500

Coffee shop and ice cream parlor 100

Coin operated car wash 100

Commercial art services 100

Commercial boat, freight or passengers 100

Commercial breeding services 100

Commercial diver 100

*489Commercial kennel $ 100

Commercial laundry 200

Commercial school 250

Commercial warehousing 150

Commodity exchange clearing house 300

Common carrier int. telecommunication 150

Communication equipment inst. contractor 150

Communication equipment oper. contractor 150

Concrete pumping 250

Construction contractor 200

Consultation and related therapy services 125

Copyright protection service 100

Cottage rental 100

Credit bureau and collection agency 200

Customs and visa preparations service 100

Dance studio 50

Dealer in explosives Public Safety 500

Dental laboratory 350

Development and sale of own property 75

Discotheque— same as night club

Documentation services for vessels steam ship agent 150

Dog grooming shop 100

Draftsman 75

Driving school 200

Dry cleaning 200

Dry docking services 200

Drywall— sheetrock installation contractor 75

Electrical contractor 100

Electronic security consultant 150

Employment agency 100

Escort service 200

Exterminating and pest control 150

Fiduciary services 100

Fingerprint services 100

Firearms and ammunition— distributor or wholesaler 1,000

Firearms and ammunition— retail sales 550

Firearms and ammunition— gunsmith 500

Fire prevention service 100

*490Fireproofing contractor license $ 150

Florist 150

Flower conserv. and agricultural nursery 100

Flying school 250

Foreign Sales Corporation 100

Free lance photographer 100

Garage and repair shops 200

Garbage removal 100

Gasoline station 250

General aviation service and maintenance 125

General manufacturing— glass 150

General manufacturing— food 150

General manufacturing— tobacco 150

General manufacturing— textile 150

General manufacturing— clothes 150

General manufacturing— public printing 150

General manufacturing— chemical 150

General manufacturing— petroleum 1,000

General manufacturing— rubber 1,000

General manufacturing— leather 150

General manufacturing— metal 500

General manufacturing— fabricated metal 500

General manufacturing— machinery 500

General manufacturing— electrical machinery 500

General manufacturing— transportation equipment 300

General manufacturing— watches 350

General manufacturing— miscellaneous 300

Glass tinting contractors 75

Golf course 150

Guard dog service 100

Hair removal service 75

Health club or spa 300

Holding company 200

Hotel and guest house A— over 100 beds 400

Hotel and guest house B— over 40-99 beds 300

Hotel and guest house C— 1-39 beds 200

Hotelkeeper— liquor 200

Hypnotism consultant 100

*491Ice manufacturing $ 250

Importer of goods for resale 200

Information and data processing services 100

Installation of equipment 75

Installation of fences 75

Installation of fire and burglary alarm systems 200

Interior decorating 100

Investment advisory service 200

Investment brokerage 400

Itinerant vendor license 50

Janitorial service and supply 150

Jewelry and watch repair shop 100

Judo instructor 100

Karate instructor 100

Kindergarten school 200

Landscaping consultant 100

Landscaping, garden, maintenance service 100

Laundromat 200

Laundry pickup and delivery service 100

Leasing of plants 100

Lie detection service 100

Liquor wholesalers license 400

Machine shop 100

Manicurist apprentice 10

Manufacturers of aerated waters 150

Manicurist 75

Marine biological supplies 100

Marine salvage and Rel underwater service 150

Marine surveyor and blasting service 150

Marine surveyor and consultant 150

Masonry contractor 75

Massage parlor 150

Master electrician 100

Master plumber 100

Media advertising, promotion and production 200

Medical laboratory 300

Messenger and delivery service 100

Misc. amusement devices 150

*492Mobilfood service $ 100

Mobe refreshment stand 75

Meling agency 100

Mortgage banker 200

Mortgage broker 400

Motion picture distribution 150

Motion picture theater 500

Motor vehicle dealer 500

Moving and freight forwarding services 200

Music recording and sales business 200

Nickelodeon per machine 30

Night club license 700

Nutrition and consulting services 100

Oceanographic research and development 100

Out patient care facility 100

Owners representative coordinator 100

Painting contractor 75

Paralegal services 100

Parking lot vehicle 100

Pharmacy 300

Photocopying services 75

Photographic processing or studio 50

Piano technician 100

Pin ball and similar machines per machine . 50

Plastering contractor 75

Plumbing contractor 100

Pollution control services 100

Poultry farm— agriculture

Prime distillers of alcoholic beverages 1,500

Printing and publishing house 250

Private elementary/secondary school 200

Production of milk and milk products 125

Project coordinator/consultant 75

Public accountant 120

Public auctioneer 100

Public dance license 25

Public relations services 100

Public title reporter 100

*493Radio and television repair shop $ 100

Radio advertising, promotion and production 200

Radio station 500

Real estate broker 250

Real estate salesman 200

Real estate salesman— temporary 100

Real estate— change business place 50

Real estate— change of associate 50

Red cap porter service 50

Rent of real property (other than buildings) 100

Rental of equipment 100

Rental of non-residential building 150

Rental watersports equipment 100

Repair and maintenance of mise, items 100

Restaurant A— Seating capacity 25 or more 200

Restaurant B— Seating capacity less than 25 125

Retail shop and store— except liquor 100

Retailers liquor license 250

Riding academy 75

Rooming house 100

Rug and furniture cleaning on location 100

Sailing school 200

Sale of prepaid hotel reservation 125

Sales and marketing concepts 50

Sales finance 200

Salvage and sale of used parts 100

Scheduled air service 700

School of ceramics 100

School of language 100

School of music 100

School of philosophy 100

School of underwater photography 100

Scooter and/or motorcycle rental 150

Scrap metal collection and sales 100

Scrap paper collection and sales 100

Scrap plastic collection and sales 100

Scuba diving school and related services 125

Secretarial service ' 100

*494Security analyzing service $ 100

Septic tank cleaning 150

Sewer cleaning and rodding services 150

Sewerage maintenance and operational engineering services 150 Sewing school 100

Sheet metal and iron work shop 150

Ship chandler 100

Shoe repair shop 75

Sightseeing and tour operations 100

Sign painting 75

Silk screen manufacturing 150

Skating rink 175

Solicitor, sales and commission agent 75

Sporting and recreational camp 100

Sports instructor 100

Sports promoter 150

Sprinkle system installation contractor 75

Steamship and shipping agents 150

Stevedoring license 100

Summer school 100

Swimming instruction 100

Swimming pool installation contractor 150

Tailoring and alteration service 100

Tavernkeeper A— distilled and fermented spirits 250

Tavernkeeper B— fermented spirits only 150

Tax consultant 100

Telegraph office 350

Television station 600

Temporary help contracting agency 100

Tennis club 100

Theatrical production, except motion picture 100

Theatrical promoter and booking agent 150

Theatrical variety employment service 150

Tile setting contractor 75

Tire recapping and retreading service 100

Tobacco Retailer 100

Tobacco Wholesaler 500

Transient disco service 75

*495Transient amusement operator $ 500

Translation services 100

Travel and ticket agent 150

Tree surgery 100

Trucking, transportation and delivery 100

Typewriter repair shop ■ 100

Undertaking business 500

Upholstery shop 100

Used car lot 100

Vehicle inspection service 100

Vending machine A— License— 0 through 5 machines 100

Vending machine B— License— 6 through 20 machines 150

Vending machine C— License— 21 through 50 machines 200

Vending machine D— License— more than 50 machines 400

Vocational training school 100

Water skiing school 100

Water supply services 150

Waterproofing contractor 75

Welding services 100

Wholesaler and other than liquor 250

Writing school 100

Yacht brokerage service 100

(b) Any person or association engaged in a business, occupation, profession, or trade not designated in subsection (a) of this section or not covered by any other provision of this Code shall obtain an annual license at a fee of $100.