Argued: May 12, 2017
T. Mills, Attorney General, and Kimberly L. Patwardhan, Asst.
Atty. Gen. (orally), Office of the Attorney General, Augusta,
for appellant State Tax Assessor
Jonathan M. Dunitz, Esq., Verrill Dana LLP, Portland, and
Cindy B. Gonzales, Esq. (orally), Verizon Corp. Resources
Group, LLC, Irving, Texas, for appellee MCI Communications
SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and
REPORTER OF DECISIONS
The State Tax Assessor appeals from the entry of a summary
judgment in the Superior Court (Kennebec County, Marden,
J.) in favor of MCI Communications Services, Inc. (MCI)
on an appeal by the Assessor of a decision vacating the
imposition of the state service provider tax on certain
charges collected by MCI. The court concluded that those
charges were part of the sale of interstate or international
telecommunications services and were therefore excluded or
exempt from taxation. We affirm the judgment.
This appeal concerns two types of surcharges-property tax
recovery charges (PTRCs) and carrier cost recovery charges
(CCRCs)-that MCI, a telecommunications service provider of
long distance telephone service in Maine, imposed upon its
Maine customers in 2008, 2009, and 2010. The case was
presented to the Superior Court through joint stipulations of
facts and stipulated exhibits. As stipulated, the following
facts are not in dispute. MCI imposed PTRCs on its customers
to recover a percentage of the local and state taxes that it
paid on real and tangible personal property used to provide
international, interstate, and intrastate telecommunications
services. MCI imposed CCRCs on its customers to recover a
percentage of the expenses that it paid to the Federal
Communications Commission (FCC) and third party
administrators for regulatory fees. MCI determined the rate of
the PTRC and CCRC surcharges by comparing the total expenses
to be recovered to the total eligible revenue (i.e., revenue
from interstate and international telecommunications
services) against which the surcharges were to be recovered,
with the intention of recovering only a portion of the total
expenses paid. MCI collected these charges only from its
customers with international and interstate services.
In January of 2011, Maine Revenue Services (MRS) notified MCI
of its intent to audit MCI for the period of March 1, 2008,
to December 31, 2010. As a result of the audit, MRS
determined that PTRCs and CCRCs were subject to taxation. MRS
assessed MCI $184, 873.69, including interest, for those
charges collected during the audit period.
MCI sought reconsideration of the assessment, see 36
M.R.S. § 151 (2012),  which the MRS Audit Division denied.
MCI next sought review of the assessment with the Maine Board
of Tax Appeals. See 36 M.R.S. §§
l5l(2)(E)-(G); 36 M.R.S. § 151-D (2012). By decision dated
September 12, 2013, the Board vacated the imposition of the
tax based on its determination that PTRCs and CCRCs were
excluded or exempt from taxation because they were charged
only in connection with sales of international and interstate
On November 6, 2013, the Assessor filed a timely petition for
review and de novo determination in the Superior Court.
See 36 M.R.S. § 151-D(10)(I)
(2016). As mentioned above, after they conducted
discovery, the parties entered a joint stipulation of facts
and exhibits and filed cross-motions for summary judgment. In
a judgment dated June 30, 2016, the court denied the
Assessor's motion and granted MCI's motion for a
summary judgment. The Assessor timely appealed.
The Assessor contends that the PTRCs and CCRCs collected by
MCI were subject to taxation because they were part of the
taxable "sale price" of telecommunications services
and were not excluded or exempt from taxation because they
were not themselves "telecommunications services"
nor were they international or interstate in nature. Because
the Assessor appeals from the court's decision on
cross-motions for summary judgment, "we review de novo
whether there was no genuine issue of material fact and
either party was entitled to judgment as a matter of
law." BCN Telecom, Inc. v. State Tax Assessor,
2016 ME 165, ¶ 2, 151 A.3d 497; see M.R. Civ.
[¶7] In interpreting a tax statute, we look first to its
plain meaning to give effect to the Legislature's intent.
BCN Telecom,2016 ME 165, ¶ 2, 151 A.3d 497. We
"seek to avoid absurd, illogical or inconsistent
results" and "will not read additional language
into a statute" or treat words in a statute as
"meaningless and superfluous." Blue Yonder, LLC
v. State Tax Assessor,2011 ME 49, ¶ 10, 17 A.3d
667 (quotation marks omitted). Further, we construe a tax
statute "most strongly against the government and in the
[taxpayer's] favor" and will not extend its reach
"beyond the clear import of the language used."
BCN Telecom,2016 ME 165, ¶ 10, 151 A.3d 497
(quotations marks omitted). Statutory exemptions to taxes are
construed narrowly, however, and we will not ...