Medical Transportation Management Corp. v. Commissioner

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
November 9, 2007
No. 06-16583 THOMAS K. KAHN
________________________ CLERK

U.S. Tax Ct. Nos.
10699-04 & 10700-04

MEDICAL TRANSPORTATION MANAGEMENT CORPORATION,
ZUNI TRANSPORTATION, INC.,

Petitioners,

versus

COMMISSIONER OF INTERNAL REVENUE SERVICE,

Respondent.

________________________

Petition for Review of a Decision of the
United States Tax Court
_________________________

(November 9, 2007)

Before ANDERSON and PRYOR, Circuit Judges, and VINING,* District Judge.

PRYOR, Circuit Judge:

*Honorable Robert L. Vining, Jr., United States District Judge for the Northern District
of Georgia, sitting by designation.
 This appeal presents a question that only a court of law and linguists would

entertain: whether an “automobile bus” is a “bus.” Medical Transportation

Management Corporation and Zuni Transportation appeal the decision of the Tax

Court that denied them income tax credits for gasoline excise taxes they had paid.

See 26 U.S.C. § 6421(b). The taxpayers argue that they purchased gasoline for

vehicles that are classified as “automobile buses,” which is a requirement for the

income tax credits, but the taxpayers concede that they did not use “buses.”

Because we conclude that an “automobile bus” is a “bus,” the taxpayers are not

entitled to the income tax credits. We affirm.

I. FACTS AND PROCEDURAL HISTORY

The taxpayers provide paratransit services to the Metro-Dade Transit

Authority. The Americans with Disabilities Act of 1990 requires local

governments that operate fixed-route transportation systems available to the

general public to provide paratransit services to the physically and mentally

disabled. To satisfy its obligations under the ADA, the Metro-Dade Transit

Authority entered into a contract with Comsis Mobility Services, Inc., a private

company that acted as a transportation broker and scheduler. Comsis, in turn,

contracted with the taxpayers and others to provide the paratransit services.

Eligible passengers could either make a reservation for a one-time ride between

two points or establish a subscription for recurring trips. The taxpayers used
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sedans and vans that have a seating capacity of fewer than 20 adults to provide the

paratransit services, and the taxpayers stipulate that they did not use “buses.”

On their income tax returns for 1998 and 1999, the taxpayers claimed credits

for excise taxes that they had paid for purchases of gasoline. Medical

Transportation claimed $58,673 and $62,000, respectively, for the two years, and

Zuni Transportation claimed $32,758 and $21,582, respectively. The

Commissioner of Internal Revenue denied the credits and mailed each taxpayer a

notice of deficiency.

The taxpayers petitioned the Tax Court for a redetermination of the

deficiencies. The taxpayers sought the credits under sections 34 and 6421 of the

Internal Revenue Code. 26 U.S.C. §§ 34, 6421. Section 6421(b) provides that “if

gasoline is used in an automobile bus” the Secretary of the Treasury shall credit the

amount of tax imposed on the gasoline against a private taxpayer’s tax liability. If

an “automobile bus” has a seating capacity of fewer than 20 adults, not including

the driver, then the credit is unavailable unless the “automobile bus” furnishes

transportation that is scheduled and along regular routes. 26 U.S.C. § 6421(b)(2).

The taxpayers’ cases were consolidated and went to trial. The Tax Court

upheld the determinations of the Commissioner. Med. Transp. Mgmt. Corp. v.

Comm’r, 127 T.C. 96, 108 (2006). The Tax Court determined that the taxpayers

failed to establish that they paid taxes on gasoline for “automobile buses.” Id. at
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105. The Tax Court concluded alternatively that the taxpayers did not furnish

transportation that was scheduled and along regular routes. Id. at 105–07.

II. DISCUSSION

Section 34 of the Internal Revenue Code provides a credit for certain

gasoline purchases:

There shall be allowed as a credit against the tax imposed by this
subtitle for the taxable year an amount equal to the sum of the
amounts payable to the taxpayer . . . under section 6421 with respect
to gasoline used during the taxable year . . . in vehicles while engaged
in furnishing certain public passenger land transportation service . . . .

26 U.S.C. § 34. Section 6421(b) defines the circumstance in which taxpayers can

receive the credit under Section 34:

(1) Allowance—Except as provided in paragraph (2) and subsection
(i), if gasoline is used in an automobile bus while engaged in—

(A) furnishing (for compensation) passenger land transportation
available to the general public, or

(B) the transportation of students and employees of schools (as
defined in the last sentence of section 4221(d)(7)(C)),

the Secretary shall pay (without interest) to the ultimate purchaser of
such gasoline an amount equal to the product of the number of gallons
of gasoline so used multiplied by the rate at which tax was imposed
on such gasoline by section 4081.

(2) Limitation in case of nonscheduled intercity or local
buses.—Paragraph (1)(A) shall not apply in respect of gasoline used
in any automobile bus while engaged in furnishing transportation
which is not scheduled and not along regular routes unless the seating
capacity of such bus is at least 20 adults (not including the driver).
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26 U.S.C. § 6421(b) (emphasis added).

The taxpayers contend that the term “automobile bus” is ambiguous and

argue that their vans and sedans are “automobile buses.” Whether an “automobile

bus” is a “bus” is an interpretation of a statutory provision that we review de novo.

Estate of Shelfer v. Comm’r, 86 F.3d 1045, 1046 (11th Cir. 1996). We disagree

with the taxpayers’ interpretation of section 6421.

“The starting point for all statutory interpretation is the language of the

statute itself,” United States v. DBB, Inc., 180 F.3d 1277, 1281 (11th Cir. 1999),

and our task “is to determine whether the language at issue has a plain and

unambiguous meaning with regard to the particular dispute in the case,” Robinson

v. Shell Oil Co., 519 U.S. 337, 340, 117 S. Ct. 843, 846 (1997). “Our inquiry must

cease if the statutory language is unambiguous and ‘the statutory scheme is

coherent and consistent.’” Id. at 340, 117 S. Ct. at 846 (quoting United States v.

Ron Pair Enters., Inc., 489 U.S. 235, 240, 109 S. Ct. 1026, 1030 (1989)). “The

plainness or ambiguity of statutory language is determined by reference to the

language itself, the specific context in which that language is used, and the broader

context of the statute as a whole.” Id. at 341, 117 S. Ct. at 846. Statutory language

is ambiguous if it is susceptible to more than one reasonable interpretation. See

Atl. States Legal Found., Inc. v. Tyson Foods, Inc., 897 F.2d 1128, 1138 (11th Cir.

1990) (statutory language unambiguous because “capable of only a single
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reasonable interpretation”).

The term “automobile bus,” as used in the Internal Revenue Code, has a

single reasonable interpretation. A reasonable reader would understand

“automobile” as an adjective that modifies the noun “bus.” The Oxford English

Dictionary defines the adjective “automobile” as “moves by means of mechanism

and power within itself . . . .” 1 The Oxford English Dictionary 806 (2d ed. 1989).

The dictionary defines the noun “bus” as “[a] familiar shortening of omnibus,” 2

The Oxford English Dictionary 688 (2d ed. 1989), and it defines the noun

“omnibus” as “[a] large public vehicle carrying passengers by road, running on a

fixed route and typically requiring the payment of a fare . . . ,” 10 The Oxford

English Dictionary 788 (2d ed. 1989). The reasonable interpretation of

“automobile bus” is that it is a motor bus or what one would understand today

simply as a “bus”—“a large motor vehicle designed to carry passengers.”

Merriam-Webster Collegiate Dictionary 154 (10th ed. 1996).

The taxpayers contend that this interpretation is unreasonable because it

renders the word “automobile” superfluous. We disagree. The adjective

“automobile” distinguishes a motor-driven bus from other buses. Cf. 2 The

Oxford English Dictionary 688 (2d ed. 1989) (mentioning in definition of

“omnibus” horse-drawn buses).

When Congress amended section 6421(b) in 1978, Congress had long used
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the adjective “automobile” in tax statutes in reference to motor-driven vehicles.

See, e.g., Revenue Act of 1917, Pub. L. No. 65-50, § 600(a), 40 Stat. 300, 316

(imposing taxes on “automobile trucks” and “automobile wagons”); 26 U.S.C. §

4061(a) (1982) (repealed 1982) (imposing taxes on “automobile bus” chassis and

bodies); cf. Ace-Chicago Great Dane Corp. v. United States, 726 F.2d 321, 324

n.3, 326 (7th Cir. 1984) (discussing “trucks” when the provision of the Internal

Revenue Code applied to “automobile trucks”). Congress adhered to that tradition

in its use of the term “automobile bus” in section 6421(b). “[A] word . . .

obviously transplanted from another legal source, whether the common law or

other legislation, . . . brings the old soil with it.” Evans v. United States, 504 U.S.

255, 260 n.3, 112 S. Ct. 1881, 1885 n.3 (1992) (quoting Felix Frankfurter, Some

Reflections on the Reading of Statutes, 47 Colum. L. Rev. 527, 537 (1947))

(internal quotation mark omitted). “[W]here Congress borrows terms of art in

which are accumulated the legal tradition and meaning of centuries of practice, it

presumably knows and adopts the cluster of ideas that were attached to each

borrowed word in the body of learning from which it was taken and the meaning

its use will convey to the judicial mind unless otherewise instructed.” Morissette

v. United States, 342 U.S. 246, 263, 72 S. Ct. 240, 250 (1952). “[A]bsence of

contrary direction may be taken as satisfaction with widely accepted definitions,

not as a departure from them.” Id. at 263, 72 S. Ct. at 250.
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 The taxpayers suggest two alternate interpretations, neither of which is

reasonable. They first argue that “automobile bus” means “a ‘4 wheeled vehicle’

used or which functions like a bus.” This interpretation strains ordinary rules of

grammar. The taxpayers cannot establish that their vehicles are “automobile

buses” under section 6421(b) by establishing that their wheels, in the words of a

common song for children, “go round and round, round and round.” Section

6421(b) describes how a qualified vehicle will function, and the term “automobile

bus” is reasonably understood as describing the physical characteristics of a

qualified vehicle.

The taxpayers alternatively suggest an interpretation that outlines the

physical characteristics of a qualified vehicle. The taxpayers “would define th[e]

term [‘automobile bus’] to mean a vehicle which is marked and restricted for use in

providing public mass transportation,” which includes “all marked and restricted

for public mass transit use sedans.” Nothing about the term “automobile bus” or

section 6421(b) reasonably suggests that certain vehicle markings are relevant or

necessary. This interpretation suggested by the taxpayers may be convenient to

their circumstances, but it can not reasonably be derived from the language of the

statute.

The taxpayers’ argument does not require that we determine when a vehicle

can be classified as a bus. The taxpayers concede that their vehicles are not buses.
8
We leave for another day the question whether a van or other vehicle can be

classified as a bus.

Our interpretation of the term “automobile bus” resolves this appeal. We

need not consider the arguments of the taxpayer that their transportation services

satisfied the other requirements of sections 34 and 6421. We do not reach the

alternative rulings of the Tax Court.

III. CONCLUSION

Because we conclude that “automobile bus” means “bus” for purposes of

section 6421(b) of the Internal Revenue Code, the judgment of the Tax Court is

AFFIRMED.

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