MOTOR VEHICLES ‑- HOUSE TRAILER ‑- EXCISE TAX ‑- LICENSES ‑- NONRESIDENT MILITARY PERSONNEL ‑- SOLDIERS AND SAILORS CIVIL RELIEF ACT ‑- REFUNDS.
(1) and (2). Under the soldiers and sailors civil relief act as recently construed by the United States supreme court, nonresident military personnel stationed in Washington can either license their motor vehicles and house trailers in their home state or license such vehicles in Washington without having to pay the excise tax imposed upon residents of this state by chapter 82.44 RCW and chapter 82.50 RCW.
(3) The department of motor vehicles may, upon receipt of a proper application and proof, make refunds to nonresident servicemen who have under a mistake of law paid the motor vehicle excise tax in licensing automobiles in this state, provided the claim for refund is made within a period of two years from the date of payment.
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July 25, 1966
Honorable Douglas W. Toms
Director, Department of Motor Vehicles
Cite as: AGO 65-66 No. 98
By letter previously acknowledged you have requested an opinion of this office on the impact ofCalifornia v. Buzard, 382 U.S. 386, 15 L.Ed. 2d 436 (1966), andSnapp v. Neal, 382 U.S. 397, 15 L.Ed. 2d 445 (1966), upon the views expressed in AGO 57-58 No. 128, AGO 63-64 No. 72, and AGO 65-66 No. 32. In this context we paraphrase your questions as follows:
(1) Does the United States soldiers and sailors civil relief act of 1940, particularly § 574 of 50 U.S.C.A. App., preclude the application of our state motor vehicle excise tax to nonresident United States military personnel stationed in Washington?
(2) Does § 574 of 50 U.S.C.A. App., exempt nonresident military personnel from paying the state excise tax on house trailers?
[[Orig. Op. Page 2]]
(3) May the department of motor vehicles upon receipt of a proper application and proof make refunds to nonresident servicemen who have paid the motor vehicle excise tax in licensing automobiles in the state of Washington?
We answer your questions in the affirmative, subject to the limitations expressed in the analysis.
Automobiles using the public highways in the state of Washington are required1/ to obtain annual vehicle licenses from the state. This necessitates the payment of a registration fee, currently $8.60 (RCW 46.16.060 ($8.00), RCW 46.01.140 (50¢), and RCW 46.16.061 (10¢)), and a 2% excise tax based upon the fair market value of the automobile (RCW 82.44.040).
Prior to 1964, motor vehicles owned by nonresident military personnel stationed in the state of Washington were statutorily exempt from the 2% excise tax. Thus such personnel were permitted to license their vehicles in this state by paying the basic license fee (§ 1, chapter 264, Laws of 1955, as amended, and previously codified as RCW 82.44.010 (4)). In 1963, the legislature amended that statute and removed the exemption from excise tax for nonresident military personnel, effective January 1, 1964 (§ 1, chapter 199, Laws of 1963, now codified as RCW 82.44.010).
Subsequently this office was asked to consider whether the federal soldiers and sailors civil relief act, in particular 50 U.S.C.A. § 574, granted nonresident military personnel a federal exemption from the state motor vehicle excise tax. In answering this question in AGO 63-64 No. 72, we first noted the crucial language of 50 U.S.C.A. § 574, which reads as follows:
"(1) For the purposes of taxation in respect of any person, or of his personal property, income, or gross income, by any State, Territory, possession, or political subdivision of any of the foregoing, or by the District of Columbia, such person shall not be deemed to have lost a residence or domicile in any State, Territory, possession, or political subdivision of any of the foregoing, or in the District of Columbia, solely by reason of being absent [[Orig. Op. Page 3]] therefrom in compliance with military or naval orders, or to have acquired a residence or domicile in, or to have become resident in or a resident of, any other State, Territory, possession, or political subdivision of any of the foregoing, or the District of Columbia, while, and solely by reason of being, so absent. For the purposes of taxation in respect of the personal property, income or gross income of any such person by any State, Territory, possession, or political subdivision of any of the foregoing, or the District of Columbia, of which such person is not a resident or in which he is not domiciled, compensation for military or naval service shall not be deemed income for services performed within, or from sources within, such State, Territory, possession, political subdivision, or District, and personal property shall not be deemed to be located or present in or to have a situs for taxation in such State, Territory, possession, or political subdivision, or district. Where the owner of personal property is absent from his residence or domicile solely by reason of compliance with military or naval orders, this section applies with respect to personal property, or the use thereof, within any tax jurisdiction other than such place of residence or domicile, regardless of where the owner may be serving in compliance with such orders:Provided, That nothing contained in this section shall prevent taxation by any State, Territory, possession, or political subdivision of any of the foregoing, or the District of Columbia in respect of personal property used in or arising from a trade or business, if it otherwise has jurisdiction. This section shall be effective as of September 8, 1939, except that it shall not require the crediting or refunding of any tax paid prior to October 6, 1942.
"(2) When used in this section, (a) the term 'personal property' shall include tangible and intangible property (including motor vehicles), and (b) the term 'taxation' shall include but not be limited to licenses, fees, or excises imposed in respect to motor vehicles or the use thereof: Provided, That the license, fee, or [[Orig. Op. Page 4]]excise required by the State, Territory, possession, or District of Columbia of which the person is a resident or in which he is domiciledhas been paid. (Emphasis supplied.)
By this statute, it seems clear that Congress has protected nonresident military personnel from the imposition of various taxes by the state in which they or their personal property happen to be located. Furthermore, subsection (2) of the act specifically includes motor vehicle license fees and excise taxes within the purview of this protection. However, the last proviso in subsection (2) seemingly qualified this as part of the statute to the extent of limiting its application to cases where the motor vehicle license fee or excise tax required by the serviceman's home state had been paid.
On the basis of this statute and the cases which had been rendered at that time, our office concluded, in AGO 63-64 No. 72, that nonresident military personnel could either license their motor vehicles in their home state and thus pay all the necessary fees in that state, or elect to license their vehicles in the state of Washington and pay all the necessary fees in this state, including the 2% motor vehicle excise tax.
The United States supreme court, however, by its recent opinion inCalifornia v. Buzard, supra, has interpreted the statute in such a way as to necessitate alteration of this prior conclusion. In that case, Captain Buzard, a resident of Washington was stationed in California, and while on temporary duty in Alabama he purchased an automobile and obtained Alabama plates. Upon his return to California, demand was made that he license his automobile in California because he had failed to do so in his home state of Washington. The state of California required the payment of an $8.00 registration fee plus a license fee calculated at 2% of the fair market value of the vehicle (this is basically the same requirement as Washington's). Captain Buzard refused to pay the 2% fee. The issue presented to the United States supreme court was whether California could require the payment of the 2% tax since Captain Buzard had not paid a tax on the vehicle in his home state, Washington.
The United States supreme court concluded that Captain Buzard could not be compelled to pay the 2% license fee as a prerequisite to the licensure of his automobile in California. The court reasoned that the qualifying proviso in 50 U.S.C.A. § 574 (2) (previously quoted on pages 3-4) only refers to those fees or taxes which are essential to the functioning of the [[Orig. Op. Page 5]] host state's licensing and registration laws. In other words, the court held that the test is whether exemption from imposition of the host state's fee or tax would deny that state's power to enforce thenonrevenue provisions of the motor vehicle legislation.
The California requirement of an annual 2% excise tax for motor vehicles is virtually the same as Washington's (compare 60 California Code § 10751-10759 with chapter 82.44 RCW), and it is obvious that the Washington 2% motor vehicle excise tax is a source of revenue not necessary to enforce the nonrevenue provisions of the motor vehicle legislation.2/
In view of the standards expressed by the United States supreme court in the Buzard case, the similarities of our laws to those of California, and the purposes for which this revenue is expended, it must be concluded that under this decision the state of Washington can only require that nonresident military personnel pay the registration fee to obtain a Washington motor vehicle license. The state cannot compel the payment of the 2% excise tax.
In regard to your second question, on the same day that the United States supreme court rendered theBuzard decision, it issued an opinion in Snapp v. Neal, supra, involving state taxation of house trailers owned by nonresident military personnel. The court concluded, in accordance with its rationale in the Buzard case, that the host state of Mississippi could not compel a nonresident military serviceman to pay a property tax on his house trailer even though he had not paid the tax on the trailer in his home state.
This decision is fully in harmony with AGO 57-58 No. 128 and AGO 65-66 No. 32, wherein it was concluded that house trailers owned by nonresident military personnel are exempt from the house trailer excise tax (chapter 82.50 RCW), and thus they can be licensed in this state by paying the basic registration fee. However, in so far as AGO 65-66 No. 32 indicates that house trailers owned by nonresident military personnel must [[Orig. Op. Page 6]] either have valid Washington vehicle plates or qualify under the reciprocity provisions of RCW 46.16.030 to use the public highways, it must be modified. The United States supreme court cases discussed herein have stated that if a nonresident military serviceman has a current vehicle license from his home state for either his automobile or his house trailer, the host state must recognize that license; hence, there is no need to find statutory authority for reciprocity as was indicated in AGO 65-66 No. 32.
A capsuled response to questions 1 and 2 is that nonresident military personnel stationed in Washington can either license their motor vehicles and house trailers in their home state or license those vehicles in Washington without having to pay the excise tax imposed upon residents of this state by chapter 82.44 RCW and chapter 82.50 RCW.
If the United States supreme court's decision in California v. Buzard, supra, had been rendered prior to January of 1964, we would not have collected these taxes from nonresident military personnel for the license years 1964, 1965 and 1966. This situation gives rise to your inquiry concerning the refund of taxes which have been paid during those years.
The right to a refund of a license fee or tax is a matter of legislative grace, which may be restricted or limited. 53 C.J.S. Licenses, § 57;Wasena Housing Corporation v. Levay, 188 Md. 383, 52 Atl. 2d 903 (1947). Likewise, grounds upon which refunds may be obtained are governed by statute. Elliot & Company Inc. v. State, 191 Wash. 385, 71 P.2d 168 (1937). Further, no executive or ministerial officer has authority to refund the tax unless such authority is expressly conferred thereon by the legislature. Guy F. Atkinson Co. v. State, 66 Wn.2d 570, 403 P.2d 880 (1965); 3 Cooley, Taxation, § 1259 (4th ed. 1924).
The motor vehicle excise tax statutes are found in chapter 82.44 RCW. The specific provision authorizing certain refunds is found in RCW 82.44.120, which provides as follows:
"Whenever any person has paid a motor vehicle license fee, and together therewith has paid an excise tax imposed under the provisions of this chapter, and the director of licenses determines that the payor is entitled toa refund of the entire amount of the license fee as provided by law, then he shall also be entitled to a refund of the entire excise tax collected under the provisions of this chapter. In case the director of licenses determines that any [[Orig. Op. Page 7]] person is entitled to a refund of only a part of the license fee so paid, the payor shall be entitled to a refund of the difference, if any, between the excise tax collected and that which should have been collected and the state treasurer shall determine the amount of such refund by reference to the applicable excise tax schedule prepared by the tax commission and the association of county assessors.
"In case no claim is to be made for the refund of the license fee or any part thereof but claim is made by any person that he has paid an erroneously excessive amount of excise tax, thetax commission shall determine in the manner generally provided in this chapterthe amount of such excess, if any, that has been paid and shall certify to the state treasurer that such person is entitled to a refund in such amount.
"No refund of excise tax shall be allowed under the first paragraph of this section unless application for a refund of license fee is filed with the director of licenses within the period provided by law, and no such refund shall be allowed under the second paragraph of this section unless filed with the tax commission within ninety days after such claimed excessive excise tax was paid.
". . ." (Emphasis supplied.)
The first paragraph provides for the refund of the entire license fee. This does not apply in the present situation because the state is permitted to make a charge for the license fee but not for the excise tax. Reference then must be made to the second paragraph to determine whether it authorizes the refund with which we are here concerned.
The key phrase in the second paragraph of RCW 82.44.120, is "an erroneously excessive amount." Webster's International Dictionary (3rd ed.) defines "excessive" in terms of "exceeding the usual, proper, or normal." Some courts interpreting [[Orig. Op. Page 8]] the term "excessive" have defined it in terms of being an error in valuation or assessment, as contrasted with a tax which should not have been levied. See,Pocomoke Guano Co. v. City of New Bern, 172 N.C. 258, 90 S.E. 202 (1916);Pickens v. Bd. of Com'rs of Henderson County, 112 N.C. 698, 17 S.E. 438 (1893); Ritchie Grocer Co. v. City of Texarkana, 182 Ark. 137, 30 S.W. 2d 213 (1930). On the other hand, at least one court has construed the term as applying to a tax which should not have been levied. Winnipseogee Lake Cotton and Woolen Mfg. Co. v. City of Laconia, 74 N.H. 82, 65 Atl. 378 (1906).
We believe that in the context of RCW 82.44.120, the interpretation set forth in the first portion of the preceding paragraph is applicable. The second paragraph of RCW 82.44.120 which contains the phrase "erroneously excessive" provides that if there is a claim for refund the tax commission shall determine the amount of such excess. (Parenthetically it should be noted that under RCW 82.44.040, the tax commission and the county assessors prepare the applicable tax schedules for each type of vehicle.) Obviously such a determination would be necessary only where the refund is based upon an error in the original valuation of the vehicle or some other type of error in the computation of an otherwise proper tax.
Thus we conclude that RCW 82.44.120 only provides for the refund of taxes which have been levied in the wrong amount due to an error in valuation or computation as contrasted with the payments we are here concerned with by nonresident military personnel which should not have been levied at all. In 1959, as part of the state budget and accounting act, authority was conferred to make refunds of erroneous or excessive payments, which is codified in RCW 43.88.170 as follows:
"Whenever any law which provides for the collection of fees or other payment by an agency does not authorize the refund of erroneous or excessive payments thereof, refunds may be made or authorized by the agency which collected the fees or payments of all such amounts received by the agency in consequence of error, either of fact or of law. The regulations issued by the governor pursuant to this chapter shall prescribe the procedure to be employed in making refunds."
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This statute, by its terms, only applies when there is not a specific provision for refunds in the particular statute authorizing the collection of the tax or fee. As previously indicated there is no provision in chapter 82.44 RCW authorizing the refund of these motor vehicle excise taxes which were paid as a consequence of an error of law. Accordingly, requests for refunds can be processed in accordance with the provisions of the above quoted statute. It should be pointed out first that the above quoted statute is discretionary, using the term ". . . refunds may be made . . ." rather than shall be made. Furthermore, it should be noted that RCW 43.09.160 limits the presenting of claims against the state to a period of two years. Therefore, an individual nonresident military serviceman who has paid the motor vehicle excise tax in the state of Washington for the licensing of his automobile must present his claim within a period of two years from having made such payment to qualify for a possible refund.
We trust the foregoing will be of assistance to you.
Very truly yours,
JOHN J. O'CONNELL
EDWARD B. MACKIE
Assistant Attorney General
*** FOOTNOTES ***
1/Subject to the exemptions set forth in RCW 46.16.010-46.16.030.
2/Ninety-eight percent of motor vehicle excise taxes are deposited in the motor vehicle excise fund (RCW 82.44.100), which is distributed in accordance with RCW 82.44.150 in the following manner: 78% to the state school equalization fund, 5% to the state general fund, and the remaining 17% to cities and towns for police, fire and public health protection.