Opinion
The plaintiff lessor of computer equipment appealed to the trial court from the defendant tax commissioner's denial of its claim for a refund of sales and use taxes and deficiency interest it had paid with respect to rental payments it had received in June 1975 from various lessees of its equipment for use of that equipment after July 1, 1975. The plaintiff claimed that because the sales and use tax did not become applicable to leases of tangible personal property until July 1, 1975, the rental payments received in June, 1975 were not subject to that tax. On reservation to this court by the trial court, held that the tax applies to all payments for the use of tangible personal property which occurs on or after July 1, 1975.
Argued November 13, 1980
Decision released February 17, 1981
Appeal from the denial by the defendant tax commissioner of the plaintiff's claim for a refund of state sales and use taxes assessed against the plaintiff on certain rental payments received by the plaintiff, brought to the Court of Common Pleas in Hartford County, then transferred by merger to the Superior Court in the judicial district of Hartford-New Britain at Hartford and reserved by the court, Daly, J., for the advice of this court.
J. Danford Anthony, Jr., with whom, on the brief, were Michael Macris and Robert G. Siegel, for the plaintiff.
Ralph G. Murphy, assistant attorney general, with Whom, on the brief, was Carl R. Ajello, attorney general, for the defendant.
This case came to this court on a stipulation of facts and pursuant to a reservation from the Superior Court as requested by the parties. Practice Book 3133, 3134. In May, 1975, the General Assembly approved extending the Connecticut Sales and Use Tax Act to include the leasing of tangible personal property. Public Acts 1975, No. 75-213, 15, 17, 19. With exceptions not relevant here, the act took effect on July 1, 1975. Public Acts 1975, No. 75-213, 53. The issue before us is the applicability of the sales and use tax statute to payments received by the plaintiff lessor in June, 1975, for the use of equipment by various lessees after July 1, 1975. The question reserved for the advice of the court is printed in footnote 1.
The parties stipulated and agreed to the following facts: The plaintiff, Harris Data Communications, Inc., was engaged in the business of renting computer equipment. Between 1972 and 1974 the plaintiff entered into leases with certain Connecticut lessees. Those leases extended through calendar year 1975 and called for monthly rental payments. In June, 1975, the plaintiff and the lessees agreed that the lessees could prepay six months' rent and that such prepayment would entitle the lessee to a discount in the form of a reduction in the total rentals that otherwise would become payable during the six month period. Before July 1, 1975, the plaintiff received, pursuant to the prepayment agreements, rental payments of $152,135.10 on which no sales and use tax was paid. With respect to those payments the defendant tax commissioner later assessed $10,649.46 additional taxes plus $1597.42 deficiency interest. The plaintiff paid to the tax commissioner the additional taxes and interest, timely filed a written claim for refund, and subsequently appealed to the Court of Common Pleas from the commissioner's decision denying the refund. This reservation ensued.
The Court of Common Pleas has been merged into the Superior Court; it is from the Superior Court that this reservation is taken.
Prior to the enactment of Public Acts 1975, No. 75-213, the sales and use tax statute did not apply to the leasing or rental of tangible personal property. The 1975 Act, in pertinent part, expanded the definitions of "sale" and "gross receipts" to read: "`Sale' and `selling' mean and include: . . . the leasing or rental of tangible personal property of any kind whatsoever, including but not limited to motor vehicles, . . . office equipment and data processing equipment"; Public Acts 1975, No. 75-213, 15; General Statutes 12-407 (2) (j); and "`Gross receipts' means . . . the total amount of payment or periodic payments received for leasing or rental of tangible personal property for the term of any such lease or rental occurring after the effective date of this Act . . . ." Public Acts 1975, No. 75-213, 19; General Statutes 12-407 (9) (with "on or after July 1, 1975" substituted for "after the effective date of this Act"; see Public Acts 1975, No. 75-567, 67).
The plaintiff argues that the phrase "on or after July 1, 1975" in the definition of "gross receipts" modifies the term "payments received" rather than "the term of any such lease or rental." We disagree; to accept the plaintiff's argument would lead to impermissible linguistic juggling by restructuring and distorting the actual words of the statute, and thus change their clear and unequivocal meaning.
It is well recognized that, whenever possible, a modifier should be placed next to the word it modifies. Strunk White, The Elements of Style, p. 24. If the sentence were read to connect the date with "received" the result would be: "Gross receipts means . . . the total amount of payment or periodic payments received [on or after July 1, 1975] for leasing or rental of tangible personal property for the term of any such lease or rental occurring," or "[g]ross receipts means . . . the total amount of payment or periodic payments received [occurring on or after July 1, 1975] for leasing or rental of tangible personal property for the term of any such lease or rental." (Emphasis added.)
Either construction would make the word "occurring" superfluous. No word in a statute should be considered as surplusage. Winchester v. Connecticut State Board of Labor Relations, 175 Conn. 349, 355, 402 A.2d 332 (1978); State v. Briggs, 161 Conn. 283, 287, 287 A.2d 369 (1971). Therefore, it is clear that the statute applies to all payments which are received for the use of tangible personal property where the use is to occur on or after July 1, 1975. This is consistent with General Statutes 12-408 which imposes the tax "[f] or the privilege of making any sales as defined in subsection (2) of section 12-407." As quoted above, 12-407 (2) includes leasing or rental within the definition of "sale." The statute is directed at the period of use under the lease, not when the lease was signed nor when the rental payments were received. Waterbury Motor Lease, Inc. v. Tax Commissioner, 174 Conn. 51, 59, 61, 381 A.2d 552 (1977); see Kellems v. Brown, 163 Conn. 478, 505-507, 313 A.2d 53 (1972), appeal dismissed, 409 U.S. 1099, 93 S.Ct. 911, 34 L.Ed.2d 678 (1973).
There is no ambiguity in the language of the statute. Waterbury Motor Lease, Inc. v. Tax Commissioner, supra, 62. It does not become ambiguous merely because the parties contend for differing meanings. Weingarten v. Allstate Ins. Co., 169 Conn. 502, 508, 363 A.2d 1055 (1975). The intent of the legislature is to be found in the meaning of the words of the statute; that is, in what the legislature actually did say, not in what it meant to say. Doe v. Manson, 183 Conn. 183, 438 A.2d 859 (1981); State v. Grant, 176 Conn. 17, 20, 404 A.2d 873 (1978). Where the language of the statute is unambiguous, we are confined to the intention expressed in the actual words used and we will not search out any further intention of the legislature not expressed in the statute. International Business Machines Corporation v. Brown, 167 Conn. 123, 133, 355 A.2d 236 (1974); Connecticut Light Power Co. v. Walsh, 134 Conn. 295, 301, 57 A.2d 128 (1948). In the absence of ambiguity it is unnecessary to resort to principles of statutory construction such as the resolution of ambiguity in favor of the taxpayer. Compare Stone v. Sullivan, 154 Conn. 498, 503-504, 227 A.2d 76 (1967).
Finally, it should be noted that the tax commissioner has issued regulations stating that rental payments received before July 1, 1975 are taxable if they are for a leasing term on or after July 1, 1975.3 Because this regulation is in accord with the language of the statute, and the statute governs, we need not address the plaintiff's claims concerning the regulation. Modugno v. Tax Commissioner, 174 Conn. 419, 421-22, 389 A.2d 745 (1978); Austin v. Housing Authority, 143 Conn. 338, 348-49, 122 A.2d 399 (1956).
The rental payments made pursuant to the prepayment agreements are subject to the Connecticut sales and use tax. The answer to the question quoted in footnote 1 is "yes."