The
SD Supreme Court handed down two decisions this morning:
- Taxpayers request for refund of overpayment denied
under “make whole” doctrine;
- McCook County Zoning Ordinance divides Justices 3/2.
Summaries
follows:
MCLANE
WESTERN, INC. v. S.D. DEPARTMENT OF REVENUE, 2024 S.D. 1: Taxpayer is a
wholesaler of tobacco products in South Dakota.
Through a miscalculation, Taxpayer overpaid its sales tax obligation by
some $530,000. Taxpayer sought a refund
from the SD Dept. of Revenue (DOR). DOR
eventually denied the request. After a
contested hearing before the Office of Hearing Examiner, the DOR’s denial was
confirmed. Appeal to the Circuit Court
also resulted in an affirmance. On
appeal, the SD Supreme Court agreed with the taxpayer that it had overpaid the
required sales tax, thereby disagreeing with the DOR and lower court. Nonetheless, the Taxpayer was denied relief
on appeal because it had passed the overpaid tax obligation on to its
purchasers and had been “made whole” in regard to the
obligation. The Court stated in ¶¶ 15-16:
[¶15.] Because McLane
calculated the tax it owed based on the higher
price it paid to UST Sales, it overpaid the tobacco taxes due under SDCL
10-50-61. The Department erred in concluding otherwise.
[¶16.]
However, this does not mean that McLane was entitled to a refund
for these overpaid amounts. Although
McLane overpaid its advance tax obligation, it fully recovered the advance tax
it paid from the dealers to whom it subsequently sold the OTP. McLane was made whole by its resale of the
OTP and is not entitled to any refund. On this basis, we affirm the
Department’s denial of McLane’s request for a refund.
This
decision in unanimous (5-0), with opinion authored by Justice Myren.
STOCKWELL
v. MCCOOK COUNTY BOARD OF COMMISSIONERS, 2024 S.D. 2: This dispute involves the interpretation of a
County Zoning Ordinance in McCook County which was enacted in 2014. BACKGROUND:
In 1999, Landowner had sought to re-zone some 5 platted lots (ranging in
size from 3.8 to 5.4 acres) from agricultural to rural residential. The county officials approved the request at
that time, but that decision was overturned by an election in the County,
initiated by County Residents. In 2022,
Landowner made a 2nd Zoning request, arguing that the plain language
of the County’s 2014 Zoning Ordinance in fact permitted “single
family dwellings”
in land previously zoned as agricultural for “lots of record.” The County Officials and the Trial Court ruled
against the Landowner, holding the history and overall effect of the 2014
Ordinance was intended to grandfather in the prior determination. The SD Supreme Court reversed, stating:
[¶23.] The circuit court
erred by deviating from these well-established rules of statutory construction
in favor of its effort to ascertain what it believed to be the broader “intent
of the zoning regulations.” In so doing, the court failed to apply the
unambiguous text of the 2014 ordinance, which the court acknowledged made clear
that Stockwell’s lots were, indeed, lots of record
[¶35.] The 2014 ordinance’s
lot of record definition unambiguously refers to the effective date of the 2014
ordinance. Despite recognizing that Stockwell’s lots satisfy this definition,
the circuit court erroneously supplanted a plain application of the text with a
determination of the BOC’s intent to hold Stockwell’s lots were in fact not
buildable. We reverse.
The
Court’s decision is a 3/2 ruling.
Justices DeVaney and Kern dissent, with the dissenting opinion authored
by Justice DeVaney.
These
decisions may be accessed at
http://ujs.sd.gov/Supreme_Court/opinions.aspx .