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11/06/91 J. FROG v. W. GARY FLEMING


November 6, 1991


Appeal from the Superior Court of the District of Columbia; Hon. William S. Thompson, Trial Judge.

Rogers, Chief Judge, and Terry and Schwelb, Associate Judges.

The opinion of the court was delivered by: Terry

Appellant, a corporation, operates a retail store in Maryland known as Carpet House. In a complaint filed in the Small Claims Branch of the Superior Court, appellant sought recovery of $232.97 from appellee Fleming for unpaid taxes arising from the sale of some carpet, which was installed in Fleming's District of Columbia home. Fleming filed a motion to dismiss the complaint, and appellant (hereafter "Carpet House") in turn filed a motion for summary judgment. Both motions were denied by a Superior Court hearing commissioner. Fleming then moved for summary judgment on the ground that Carpet House was precluded from collecting any such tax because it had neither a business license *fn1 nor a certificate of registration. *fn2 The trial court granted the motion. We reverse.

In 1985 Carpet House sold approximately $4,000 worth of carpet to Mr. Fleming, who lived in the District of Columbia. Although the carpet was delivered to and installed in Fleming's home, Carpet House did not charge, and Fleming did not pay, any District of Columbia use tax as required by D.C. Code § 47-2202. *fn3 The District of Columbia tax authorities later audited Carpet House's records and determined that it owed unpaid "sales and use taxes" of $232.97 for the transaction with Fleming. Carpet House paid the tax and then filed this suit in small claims court against Fleming to recover what it had paid.

With certain exceptions not relevant here, *fn4 one who purchases tangible personal property from a vendor in the District, or from a vendor located outside the District who "engages in business in the District," is required by law to reimburse the vendor for the tax that the District imposes upon the vendor. See D.C. Code §§ 47-2003 (a), 47-2004, and 47-2203 (1990). Regardless of whether the tax is a sales tax or a use tax, the purchaser remains liable under section 47-2003 (a) to pay it.

Until now it has not been explicitly held that a purchaser such as Fleming must reimburse a vendor who has failed to charge a sales or use tax, but it cannot be seriously doubted that this is what the law requires. First, the plain language of D.C. Code § 47-2003 (a) imposes a "duty" on every District of Columbia purchaser of tangible personal property sold at retail to reimburse the vendor. *fn5 Section 47-2004 requires the vendor to obtain reimbursement by "adding to the sales price and collecting from the purchaser" the amount of the tax. The fact that Carpet House did not collect the tax from Fleming at the time of the sale does not now relieve Fleming of his duty to reimburse Carpet House for the tax it paid after the audit. We have also said, in dictum, that a vendor who did not charge taxes at the time of a sale could seek reimbursement of taxes for back sales from a purchaser, although we recognized that it might be difficult to do so. District of Columbia v. Acme Reporting Co., 530 A.2d 708, 715 n.11 (D.C. 1987).

In the trial court Fleming contended that Carpet House's lack of a business license and a certificate of registration at the time of the sale precluded Carpet House now from suing to collect the tax. That argument is without merit, and the trial court erred in granting summary judgment based on it. As we have pointed out in note 1, supra, the business license requirement in D.C. Code § 47-2801 does not apply to retail sales of carpet. As for the certificate of registration, Carpet House was required by D.C. Code § 47-2026 to obtain such a certificate before "engaging in the business of making any retail sales subject to tax under the provisions" of the District of Columbia Code. The penalty for failure to have a certificate, however, is set forth in section 47-2026(d) of the Code: a fine of "not more than $50 for each and every separate day on which said retail sales are made without possession of such registration certificate." *fn6 There is no support in case law, statutes, or regulations for the proposition that Carpet House's failure to obtain a certificate permanently barred it from recovering unpaid taxes from purchasers whose duty it was to pay them. On the contrary, the tax regulations provide that "the failure to . . . secure a certificate [of registration] shall not relieve any vendor or purchaser from the duty of paying the tax imposed by the [Sales Tax] Act or collecting from the purchaser the reimbursement for the tax." 9 DCMR § 415.4 (1986) (emphasis added). *fn7

Courts generally construe administrative regulations by the same rules that apply to the interpretation of statutes. In re R.F.H., 354 A.2d 844, 845 n.2 (D.C. 1976); KCMC Inc. v. FCC, 600 F.2d 546, 549 (5th Cir. 1979); Rucker v. Wabash R.R., 418 F.2d 146, 149 (7th Cir. 1969); 1A SUTHERLAND, STATUTORY CONSTRUCTION § 31.06 (4th ed. 1985); see Siegman v. District of Columbia, 48 A.2d 764, 766 (D.C. 1946) (municipal ordinances are similarly construed). A cornerstone of statutory interpretation is the rule that a court "will not look beyond the plain meaning of a statute when the language is unambiguous and does not produce an absurd result." Gibson v. Johnson, 492 A.2d 574, 577 (D.C. 1985) (citation omitted). The plain meaning of section 415.4 of the regulations is that a purchaser cannot avoid paying a sales or use tax otherwise payable because the vendor does not, at the time of the sale, possess a certificate of registration. We so hold in this case.

Carpet House opposed the motion for summary judgment on the ground that there were genuine issues of material fact to be resolved. Although the record is not entirely clear as to what those issues might be, one apparent issue is whether the parties intended to include the District of Columbia tax in the sales price of the carpet. *fn8 What is clear is that Fleming was not entitled to judgment as a matter of law. *fn9 Thus we reverse the order granting summary judgment and remand this case to the trial court for further proceedings.

Reversed and remanded

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