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statuteappealtrial

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Sky Transpo, Inc. v. City of Knoxville, 703 S.W.2d 126

Facts

Sky Transpo owned and operated a gondola and chair lift system at the 1982 World's Fair in Knoxville, Tennessee. The company paid amusement admissions taxes to the City under protest, arguing that its system was primarily a transportation service rather than an amusement ride. The City contended that the system was an amusement, as it provided entertainment and scenic views. The trial court sided with the City, but the Court of Appeals found in favor of Sky Transpo, leading to the Supreme Court's review.

Plaintiff, Sky Transpo, which owned and operated the gondola and chair lift system at the 1982 World's Fair, initiated this action in the Chancery Court of Knox County, Tennessee seeking a refund of taxes paid the City of Knoxville under protest.

Issue

Whether Sky Transpo's gondola and chair lift system was an 'amusement' subject to the amusement admissions tax, and whether the taxes were paid involuntarily.

This case presents two issues for review: (1) whether plaintiff's system was an 'amusement' within the meaning of Chapter 776, Private Acts of 1947, which provides for '… a tax of one (1) cent for each (20) cents, or major fraction thereof, on the amount paid for admission to any place of amusement …', and (2) in the event plaintiff's system is found not to be an 'amusement' within the meaning of the Act, whether plaintiff paid the taxes at issue involuntarily.

Rule

Tax statutes are to be liberally construed in favor of the taxpayer and strictly construed against the taxing authority.

We adhere to the rule that 'tax statutes are to be liberally construed in favor of the taxpayer and strictly construed against the taxing authority.'

Analysis

The court determined that the primary function of Sky Transpo's gondola and chair lift was transportation, as they were essential for moving fair attendees across the fairgrounds. The court rejected the City's argument that the rides were primarily for amusement based on their location and the fact that they were dismantled after the fair. The court emphasized that the rides were not marketed as amusements and that the majority of their use was for transportation purposes.

In light of the foregoing facts, we conclude that plaintiff's gondola and chair lift were primarily means of transportation rather than amusements within the meaning of Chapter 776, Private Acts of 1947.

Conclusion

The Supreme Court affirmed the Court of Appeals' ruling, concluding that Sky Transpo was entitled to recover the taxes paid under protest, plus interest, as the gondola and chair lift were primarily transportation systems.

Sky Transpo is therefore entitled to recover the amounts paid under protest with interest as provided by law from the date of payment.

Who won?

Sky Transpo prevailed in the case because the court found that the gondola and chair lift were primarily means of transportation, not subject to the amusement admissions tax.

Sky Transpo is therefore entitled to recover the amounts paid under protest with interest as provided by law from the date of payment.

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Miles v. Department of Treasury, 209 Ind. 172, 199 N.E. 372

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