CITY OF WESTBROOK et al
February 10, 2016.
B. McConnell, Esq., and Joseph C. Siviski, Esq., Perkins
Thompson, P.A., Portland, for appellant Chadwick-BaRoss, Inc.
L. Burns, Esq., and Roy T. Pierce, Esq., Jensen Baird Gardner
& Henry, Portland, for appellees City of Westbrook and
argument: David B. McConnell, Esq., for appellant
Pierce, Esq., for appellees City of Westbrook and Elizabeth
SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, and HJELM,
[¶1] In this appeal, we are asked to
determine whether the Superior Court (Cumberland County,
Mills, J. ) erred in concluding that equipment owned
by a business taxpayer--but leased to others--did not fall
clearly within the personal property tax exemption for
stock-in-trade. See 36 M.R.S. § 655(1)(B)
(2015). Chadwick-BaRoss, Inc., appeals from a summary
judgment entered in favor of the City of Westbrook and its
tax assessor on Chadwick-BaRoss's complaint seeking a
declaratory judgment that it did not owe personal property
taxes on heavy equipment that it leased to others. We
conclude, as did the Superior Court, that the equipment does
not fall " unmistakably within the spirit and
intent," Hurricane Island Outward Bound v. Town of
Vinalhaven, 372 A.2d 1043, 1046 (Me. 1977), of the
Legislature's tax exemption for "
[s]tock-in-trade," 36 M.R.S. § 655(1)(B), and we
affirm the judgment.
[¶2] The following facts, supported by the
statements of material facts and referenced evidence in the
summary judgment record, are viewed in the light most
favorable to Chadwick-BaRoss. See Victor Bravo
Aviation, LLC v. State Tax Assessor, 2011 ME 50, ¶ 10,
17 A.3d 1237 (reviewing " the grant of summary judgment
de novo, viewing the facts in the light most favorable to the
nonprevailing party to determine whether the court correctly
concluded that there were no genuine issues of material fact
and that the prevailing party was entitled to judgment as a
matter of law" ).
[¶3] Chadwick-BaRoss is a Maine corporation
with a principal place of business in Westbrook. It is a
heavy-equipment dealer that sells equipment at retail to
customers, and occasionally leases that equipment.
[¶4] After receiving a 2012 personal
property tax declaration form from Chadwick-BaRoss, the City
sent a letter to the company in May 2012 asking it to include
additional equipment that Chadwick-BaRoss owned but that, on
the tax day of April 1, 2012, was held in the physical
possession of others pursuant to lease agreements. The City
asked for a response by June 8, 2012, but it received no
response and sent a follow-up letter on October 22, 2012,
again seeking a list of all equipment that had been on lease
to others on April 1, 2012. Chadwick-BaRoss's president
responded by letter that, although twelve identified pieces
of equipment (nine wheel loaders, one compact wheel loader,
one arctic hauler, and one skid steer) were in the hands of
customers pursuant to " interim rental agreements,"
Chadwick-BaRoss considered those items to be inventory
available for immediate sale and therefore exempt from the
personal property tax pursuant to 36 M.R.S. § 655(1)(B).
[¶5] The equipment at issue was in the
physical possession of Chadwick-BaRoss
customers pursuant to standard agreements
entitled " EQUIPMENT RENTAL AGREEMENT." The
standard agreement form specified a term for the rental in
weeks or months, established a rental rate, and authorized
repossession if the customer failed to pay the rent that it
owed. The agreement included the following provision: "
Chadwick BaRoss has the right to exchange the Equipment at
any time for Equipment of equal capacity at no additional
expense to Customer. If Customer has an option to purchase,
that option, if not exercised, will lapse concurrent with the
exchange." The agreement also stated, " The
Equipment will at all times be located at Customer's job
site . . . and will not be ...