Pourier v. South Dakota Department of Revenue

KONENKAMP, Justice

(concurring in part and dissenting in part).

[¶ 50.] I agree that SDCL 10-47B-131.2 permits “consumers” to apply for and obtain a refund of motor fuel taxes if a court finds, as we have, that taxation is preempted by federal law. Consumer claimants have not yet made a claim, of course, and, if they do, the question of the statute of limitations should be decided then. Today’s decision impugns the wise principle that courts must await whatever controversies may arise and decline to reach disputes not before them. The only claim before us is the one sought by Muddy Creek.

[¶ 51.] All refund claims that Muddy Creek submitted before December 17, 1997 are untimely. SDCL KM7B-141 limits the time a claimant can obtain a motor fuel tax refund to fifteen months:

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.

The only valid refund Muddy Creek is entitled to is the one for tax paid on its own use of motor fuel on the reservation for the period of December 17, 1997 through December 1999. That period is the one for which Muddy Creek made a timely demand. All prior claims are foreclosed in accord with SDCL 10-47B-141 and are “forever barred from refund eligibility.”

[¶ 52.] Nonetheless, the Court bypasses this statute, throwing open the State’s treasury not only to Muddy Creek’s claims but to all claims to be made in the future by consumers, without regard to any time limitation. This Court has neither the right nor the justification to initiate its own administrative proceedings on behalf of these consumers in order to prejudge the future timeliness of their claims for tax relief against the State. The controversy is not ripe for decision because we do not know how far back claims will be made by consumers or how long in the future the right to make those claims will or should remain open.

[¶ 53.] The Court relies on the decision of Hough v. Perkins County, 72 S.D. 236, 32 N.W.2d 632, 633 (1948) to declare that South Dakota’s fifteen month limitations period for seeking a refund on motor fuel tax is “inoperative” and thus “the limitation periods imposed by the motor fuel taxation scheme are inapplicable in this case.” But, for the record, Hough had nothing to do with tax refunds. And that case upheld the statute of limitations. At best, Hough only stands for the proposition that certain defects in a tax deed are jurisdictional against which a statute of limitations is necessarily inoperative. See also Cornelius (Lynch, Intervener) v. Ferguson, 23 S.D. 187, 121 N.W. 91, 93. Hough follows a long line of South Dakota cases standing for the rule that persons cannot be deprived of their real property through the sale of a tax deed if the defects in the process of obtaining the deed are so serious as to deprive owners of their property without due process of law. Here, with respect to refunds on motor fuel tax, South Dakota taxpayers have not been deprived of due process. They have *410a right to seek a refund within a reasonable time.

[¶ 54.] AH in all, the holding in Hough is very different from today’s fiat declaring that the State cannot set a reasonable limit on a motor fuel tax refund claim. On the contrary, the United States Supreme Court has specifically authorized reasonable procedural limitations, including “relatively short statutes of limitation” applicable to tax refund claims. McKesson Corp. v. Division of Alcoholic Beverages, 496 U.S. 18, 45, 110 S.Ct. 2238, 110 L.Ed.2d 17 (1990). The Supreme Court acknowledged this vital issue in dealing with tax refunds, endorsing a State’s “exceedingly strong interest in financial stability.” Id. at 37, 110 S.Ct. 2238. Granted, there is an element of injustice in cutting off the right to seek tax refunds for taxes illegally collected. But statutes of limitations always cut off what may otherwise be just claims. They balance the right to redress against the specter of endless liability. In tax refund cases, to deny such limitations would devastate the State’s budgetary planning process.

[¶ 55.] Since the issue of future consumer claims was never briefed or decided at any level in these proceedings, the matter is simply not appropriate for decision. As Learned Hand would counsel, a court should move cautiously before taking so drastic a step as to prejudge a controversy not before it. Therefore, I concur on Issues 1 and 2, but dissent on Issues 3 and 4.

[¶ 56.] AMUNDSON, Retired Justice, joins this special writing.