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Wegmans Food Markets, Inc. v. Tax Appeals Tribunal of State

Court of Appeals of New York
Jun 27, 2019
2019 N.Y. Slip Op. 5184 (N.Y. 2019)

Opinion

No. 56

06-27-2019

In the Matter of WEGMANS FOOD MARKETS, INC., Respondent, v. TAX APPEALS TRIBUNAL OF the STATE of New York, Respondent, Commissioner of Taxation and Finance of the State of New York, Appellant.


OPINION OF THE COURT

Tax Law § 1105(c)(1) imposes a sales tax on certain information services, "but exclud[es] the furnishing of information which is personal or individual in nature and which is not or may not be substantially incorporated in reports furnished to other persons." In this CPLR article 78 proceeding, we hold that respondent Tax Appeals Tribunal of the State of New York (the Tribunal) rationally determined that the information services receipts at issue were not excluded from the tax.

I.

Petitioner Wegmans Food Markets, Inc. is a regional supermarket chain that operates throughout New York. Wegmans monitors its competitors' retail prices as part of its pricing strategy. Since 1995, Wegmans has engaged RetailData, LLC to perform such monitoring through competitive price audits (CPAs). Wegmans selects the products and period covered by a CPA and which of its competitors, and their specific locations, RetailData should surveil. RetailData's data collectors then travel to the locations specified in Wegmans's request and collect the information by scanning prices from the store shelves using scanners or smart phones. After collecting the prices, RetailData validates the information, creates reports, and furnishes the reports to Wegmans in its requested format. The CPAs and the resulting reports are kept confidential to prevent Wegmans's competitors from discovering the products it monitors and its pricing strategies.

The New York State Department of Taxation and Finance (the Department) conducted an audit of Wegmans's sales and use tax liability for the period June 2007 through February 2010. During the audit, the Department concluded that Wegmans's purchases of CPAs and the corresponding reports from RetailData were taxable receipts under Tax Law § 1105(c)(1). After the Department issued a notice of determination imposing additional sales tax, Wegmans petitioned the Division of Tax Appeals challenging the determination. Wegmans sought a refund of the money it paid to satisfy the tax liability, arguing that "the services rendered by RetailData qualify as an exempt information service which is ‘personal and individual in nature.’ "

Following an evidentiary hearing, an administrative law judge (ALJ) denied the petition. Upon Wegmans's exception to the ALJ's determination, the Tribunal, among other things, affirmed. It concluded that the information services at issue do not qualify for section 1105(c)(1)'s exclusion because the data in the CPA reports was culled from supermarket store shelves, which are widely-accessible and contain non-confidential data. In addition, although there was some customization of the information, that process did not render the information personal or individual in nature. Given its determination, the Tribunal declined to reach the exclusion's second requirement, that is, whether the information may be substantially incorporated into reports furnished to RetailData's other clients. Wegmans commenced this CPLR article 78 proceeding against the Tribunal and respondent Commissioner of Taxation and Finance of the State of New York (the Commissioner) in the Appellate Division pursuant to Tax Law § 2016, seeking a judgment annulling the Tribunal's determination.

The Appellate Division granted the petition and annulled the Tribunal's determination. Initially, the Court stated that "in the event of ambiguity, where, as here, an exclusion rather than an exemption is involved, the statute must be strictly construed in favor of the taxpayer" ( 155 A.D.3d 1352, 1354, 65 N.Y.S.3d 296 [3d Dept. 2017] [internal quotation marks and citation omitted] ). The Court recognized "that Matter of Mobil Oil Corp. v. Finance Adm'r of City of N.Y., 58 N.Y.2d 95, 99, 459 N.Y.S.2d 566, 446 N.E.2d 130 (1983) indicates that exclusions are to be construed against the taxpayer" ( 155 A.D.3d at 1354 n. 1, 65 N.Y.S.3d 296 ). However, the Court disagreed with our statement of law, explaining that "the proposition in [Matter of Mobil Oil Corp. ] relies upon precedent that refers to exemptions rather than exclusions" (id. ).

Turning to application of the statutory exclusion, the Court acknowledged that "the pricing information that RetailData collects on [Wegmans's] behalf is information that is available to the public," but nonetheless concluded that "such information does not derive from a singular, widely accessible common source or database as that test has previously been applied and commonly understood in determining the applicability of the subject tax exclusion" ( id. at 1355 ). The Court further determined that "the information furnished to [Wegmans] was uniquely tailored to [its] specifications and was related exclusively to implementation of its confidential pricing strategy" ( id. at 1356 ). Accordingly, Wegmans's "purchase of these information services should have been excluded from taxation" because "the information services that [Wegmans] purchased from RetailData were personal or individual in nature and were not substantially incorporated into reports of others" (id. ). We granted the Commissioner leave to appeal from the Appellate Division judgment, and now reverse. II.

We reiterate the longstanding rule that, in CPLR article 78 proceedings, "courts have no right to review the facts generally as to weight of evidence, beyond seeing to it that there is substantial evidence" (Matter of Pell v. Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 N.Y.2d 222, 230, 356 N.Y.S.2d 833, 313 N.E.2d 321 [1974] [internal quotation marks and citation omitted] ). While CPLR 7804(g) permits the Appellate Division to dispose of issues in the proceeding, it does not provide that court with the power to conduct an "independent factual review of the record" (155 A.D.3d at 1357 n 5, 65 N.Y.S.3d 296 ).

In Matter of Mobil Oil Corp., we concluded: "In the case of statutory exclusions, the presumption is in favor of the taxing power" ( 58 N.Y.2d at 99, 459 N.Y.S.2d 566, 446 N.E.2d 130 ). We reaffirm this straightforward statement of law in light of the Appellate Division's refusal to apply it. By doing so, we neither state a new rule under which "the taxpayer always loses" (concurring op. at 596, 107 N.Y.S.3d at 775, 131 N.E.3d at 882) nor overrule Matter of Grace v. New York State Tax Commn., 37 N.Y.2d 193, 371 N.Y.S.2d 715, 332 N.E.2d 886 [1975], rearg. denied 37 N.Y.2d 816 [1975] ), despite the concurrence's hyperbolic claims to the contrary. We reiterate our settled rule of construction to ensure consistent application of taxing statutes in the face of our colleagues' apparent invitation for continued evasion (see concurring op. at 602, 107 N.Y.S.3d at 779, 131 N.E.3d at 886; Wilson, J., dissenting op. at 604, 107 N.Y.S.3d at 780–81, 131 N.E.3d at 887–88).

In general, "[a] statute which levies a tax is to be construed most strongly against the government and in favor of the citizen" (Matter of Grace, 37 N.Y.2d at 196, 371 N.Y.S.2d 715, 332 N.E.2d 886 [internal quotation marks and citation omitted]; see Matter of Mobil Oil Corp., 58 N.Y.2d at 99, 459 N.Y.S.2d 566, 446 N.E.2d 130 ). "The principle is, however, applicable only in determining whether property, income, a transaction[,] or event is subject to taxation" (Matter of Grace, 37 N.Y.2d at 196, 371 N.Y.S.2d 715, 332 N.E.2d 886 ). "[T]he rule is otherwise with respect to the taxpayers' right to exclude items from taxation" (Matter of Mobil Oil Corp., 58 N.Y.2d at 99, 459 N.Y.S.2d 566, 446 N.E.2d 130 ). In other words, when the matter at issue "is subject to the taxing statute," but the question is whether taxation is negated by a statutory exclusion or exemption, "a different rule applies" (Matter of Grace, 37 N.Y.2d at 196, 371 N.Y.S.2d 715, 332 N.E.2d 886 ). In that instance, "the presumption is in favor of the taxing power" (Matter of Mobil Oil Corp., 58 N.Y.2d at 99, 459 N.Y.S.2d 566, 446 N.E.2d 130 ; see Matter of Grace, 37 N.Y.2d at 196, 371 N.Y.S.2d 715, 332 N.E.2d 886 ).

In defining the applicable rules for construing tax statutes, we have not differentiated between exemptions, exclusions, and deductions (see Matter of 677 New Loudon Corp. v. State of N.Y. Tax Appeals Trib., 19 N.Y.3d 1058, 1060, 955 N.Y.S.2d 795, 979 N.E.2d 1121 [2012], rearg. denied 20 N.Y.3d 1024, 960 N.Y.S.2d 60, 983 N.E.2d 1244 [2013], cert denied 571 U.S. 952, 134 S.Ct. 422, 187 L.Ed.2d 280 [2013] ; Matter of Charter Dev. Co., L.L.C. v. City of Buffalo, 6 N.Y.3d 578, 582, 815 N.Y.S.2d 13, 848 N.E.2d 460 [2006] ). Contrary to the Appellate Division's conclusion (see also Matter of Towne–Oller & Assoc. v. State Tax Commn., 120 A.D.2d 873, 874 n., 502 N.Y.S.2d 544 [3d Dept. 1986] ) and Wegmans's argument, our cases in this regard do not turn on syntactical errors conflating these concepts. Rather, we have adopted a functional analysis that affords a singular and workable rule for construing exemptions, exclusions, and deductions, each of which operate to negate the taxpayer's obligation to pay the otherwise applicable tax.

The federal view accords with our approach (see e.g. Stinson Estate v. United States, 214 F.3d 846, 848 [7th Cir.2000] [classifying "deductions, exemptions, and exclusions" as "matters of legislative grace"]; Rozpad v. Commissioner of Internal Revenue, 154 F.3d 1, 3 [1st Cir.1998] ["all exclusions from taxation must be narrowly construed"] ), but does not dictate our analysis (see concurring op. at 600, 107 N.Y.S.3d at 777, 131 N.E.3d at 884).

In Matter of Grace, for instance, we concluded that "[t]he same rules apply" to deductions and exemptions because "[a] deduction is functionally a particularized species of exemption from taxation" ( 37 N.Y.2d at 197, 371 N.Y.S.2d 715, 332 N.E.2d 886 ). We explained that "[a]n exemption from taxation" and, therefore, a deduction, "must clearly appear, and the party claiming it must be able to point to some provision of law plainly giving the exemption" ( id. at 196, 371 N.Y.S.2d 715, 332 N.E.2d 886 [internal quotation marks and citation omitted] ). "Indeed, if a statute or regulation authorizing an exemption is found, it will be construed against the taxpayer" (id. [internal quotation marks and citation omitted] ). "This is because an exemption is not a matter of right, but is allowed only as a matter of legislative grace" (id. ). Still, "the interpretation should not be so narrow and literal as to defeat [the exemption's] settled purpose" (id. ).

The concurrence concedes, as it must, that Matter of Grace did "not expressly state that ambiguities in statutory exclusions are interpreted in favor of the taxpayer" (concurring op. at 598, 107 N.Y.S.3d at 776, 131 N.E.3d at 883). Matter of Grace did not make this statement because it is not the law. Rather than overrule Matter of Grace, in Matter of Mobil Oil Corp. we extended the functional approach, relying on the analysis previously applied to exemptions and deductions. On the strength of this analysis, we held that, like exemptions, "[t]ax exclusions are never presumed or preferred and before [a] petitioner may have the benefit of them, the burden rests on [the petitioner] to establish that the item comes within the language of the exclusion" (Matter of Mobil Oil Corp., 58 N.Y.2d at 99, 459 N.Y.S.2d 566, 446 N.E.2d 130 ). Consequently, as with exemptions, "the presumption is in favor of the taxing power" when construing "statutory exclusions" (id. ). We decline the invitation, endorsed by the concurrence and both dissents, to overrule this clear precedent based on a revisionist analysis that ignores our case law.

Fairland Amusements v. State Tax Commn. is not to the contrary (see 66 N.Y.2d 932, 498 N.Y.S.2d 796, 489 N.E.2d 765 [1985] ). The issue there involved interpretation of the phrase "place of amusement" in the clause generally imposing the tax. The statute at issue, Tax Law § 1105(f)(1), taxed "[a]ny admission charge ... in excess of ten cents to or for the use of any place of amusement in the state." The taxpayer did not rely on any of the exceptions included in that subsection and, thus, the question there was whether the tax applied at all, not whether the transaction fit within a statutory exclusion. Our memorandum decision, interpreting "the statutory scheme," therefore stated the rule for construing general taxing provisions, not the more specific rule for construing statutory exclusions (Fairland Amusements, 66 N.Y.2d at 934, 498 N.Y.S.2d 796, 489 N.E.2d 765 ). When we later interpreted one of the exceptions listed in that subsection, "dramatic or musical arts performances," we applied the specific rule of interpretation, construing the provision against the taxpayer (see Matter of 677 New Loudon Corp., 19 N.Y.3d at 1060, 955 N.Y.S.2d 795, 979 N.E.2d 1121 ).

III.

A taxpayer has the burden "to overcome tax assessments" (Matter of Grace, 37 N.Y.2d at 195, 371 N.Y.S.2d 715, 332 N.E.2d 886 ) and to "establish its entitlement to an exclusion from tax" ( Matter of Colt Indus. v. New York City Dept. of Fin., 66 N.Y.2d 466, 471, 497 N.Y.S.2d 887, 488 N.E.2d 817 [1985], rearg. denied 67 N.Y.2d 757, 500 N.Y.S.2d 1028, 490 N.E.2d 1234 [1986] ). In the sales tax context, in particular, "it shall be presumed that all receipts for ... services of any type mentioned in" Tax Law § 1105(c) "are subject to tax until the contrary is established" ( Tax Law § 1132[c][1] ). Moreover, "[i]f there are any facts or reasonable inferences from the facts to sustain it, the court must confirm the [Tribunal's] determination" (Matter of Grace, 37 N.Y.2d at 195, 371 N.Y.S.2d 715, 332 N.E.2d 886 ).

Our application of the principles articulated above begins with the text of Tax Law § 1105(c)(1), which imposes a tax on "[t]he receipts from every sale" of "[t]he furnishing of information by printed, mimeographed or multigraphed matter or by duplicating written or printed matter in any other manner, including the services of collecting, compiling or analyzing information of any kind or nature and furnishing reports thereof to other persons." The statute "exclud[es] the furnishing of information which is personal or individual in nature and which is not or may not be substantially incorporated in reports furnished to other persons" ( Tax Law § 1105[c][1] ).

Here, Wegmans concedes that the information services provided by RetailData fall within the general taxing provision of section 1105(c)(1). The determinative issue before this Court, therefore, is whether the Tribunal rationally determined that those information services were not excluded from the sales tax (see Matter of Colt Indus., 66 N.Y.2d at 471, 497 N.Y.S.2d 887, 488 N.E.2d 817 ). We conclude that the Tribunal's determination that Wegmans failed to establish its entitlement to the statutory exclusion, because the information at issue was not personal or individual in nature, was rational and should be confirmed.

The information that RetailData compiled and the reports it furnished to Wegmans derived from a non-confidential and widely-accessible source, the supermarket shelves of Wegmans's competitors. There is nothing about the information itself that is personal or individual in nature. RetailData simply collected the prices of products at grocery stores and compiled that information into reports which it furnished to Wegmans. The Tribunal rationally concluded that the information RetailData furnished to Wegmans was not personal or individual in nature because it was collected from prices on supermarket shelves, which are publicly available, widely-accessible, and not confidential. Moreover, in these circumstances, it was rational for the Tribunal to determine that RetailData's customization of the publicly-available information it collected from supermarket shelves into a report format did not render the furnished information personal or individual in nature (see Matter of ADP Automotive Claims Servs. v. Tax Appeals Trib., 188 A.D.2d 245, 248, 594 N.Y.S.2d 96 [3d Dept. 1993], lv denied 82 N.Y.2d 655, 602 N.Y.S.2d 804, 622 N.E.2d 305 [1993] ; Matter of Rich Prods. Corp. v. Chu, 132 A.D.2d 175, 177–178, 521 N.Y.S.2d 865 [3d Dept. 1987], lv denied 72 N.Y.2d 802, 530 N.Y.S.2d 554, 526 N.E.2d 45 [1988] ). Accordingly, the Appellate Division judgment should be reversed, with costs, the Tribunal's determination confirmed, and the petition dismissed.

In dissent, Judge Wilson expounds the historical antecedents to Tax Law § 1105(c)(1), ultimately concluding that "personal or individual in nature" really means "custom" (Wilson, J., dissenting op. at 622, 107 N.Y.S.3d at 793, 131 N.E.3d at 901). He fails, however, to anchor this conclusion to any authority explaining the meaning of that clause of the statutory exclusion. Instead, his conclusion stems from a speculative analysis of the cited sources which relies on multiple layers of unsupported inferences to effectively rewrite "personal or individual" as "personalized or individualized." While we of course recognize that, in appropriate circumstances, legislative history can be a useful tool in determining the legislature's intent, it is not illuminating in every case. This is such a case, and we decline to follow the meandering path to nowhere laid down by Judge Wilson's interpretation of the legislative history.

STEIN, J. (concurring). Effectively overruling our landmark decision in Matter of Grace v. New York State Tax Commn., 37 N.Y.2d 193, 371 N.Y.S.2d 715, 332 N.E.2d 886 1975 ), the majority today declares a new rule: in New York, the taxpayer always loses. Instead of confronting our four-decade-old precedent, the majority states that the distinction we drew in Grace between tax exclusions and exemptions, for purposes of resolving any disagreement over the meaning of a tax statute, does not exist. I write separately to explain that this dramatic departure from our long-standing rule, which the majority refuses to acknowledge, is not only inconsistent with this Court's precedent, but also unnecessary to decide this case, which must be reversed in any event under the analytical framework set forth in Grace. Therefore, I concur with the majority in result alone.

I.

In the decision on review in this CPLR article 78 proceeding, the Tax Appeals Tribunal stated that its "resolution of this dispute is guided by the rule of construction that requires exclusions from taxation to be strictly interpreted in the taxpayer's favor " (emphasis added). The Tribunal has applied that rule of construction for decades, in recognition that it is based on a proper interpretation of this Court's decision in Grace (see e.g. Matter of Exxon Mobil Corp., 2012 WL 1980652, *8, 2012 N.Y. Tax LEXIS 43, *19 [N.Y. St. Div. of Tax Appeals DTA No. 823437, May 24, 2012]; Matter of N.A.E., Inc., Gen. Partner, 1993 WL 491195, *16, 1993 N.Y. Tax LEXIS 495, *42 [N.Y. St. Div. of Tax Appeals DTA Nos. 810045, 810046, 810210, Nov. 18, 1993]; Matter of 1605 Bookcenter, Inc., 1990 WL 204903, *14, 1990 N.Y. Tax LEXIS 216, *38–39 [N.Y. St. Div. of Tax appeals DTA No. 800121, May 17, 1990]; see Matter of Towne–Oller & Assoc. v. State Tax Commn., 120 A.D.2d 873, 874, 502 N.Y.S.2d 544 (3d Dept. 1986) [citing Grace for the proposition that, "[w]here an exclusion from taxability is involved, it must be strictly construed in the taxpayer's favor"]; see also Westwood Pharms. v. Chu, 164 A.D.2d 462, 465, 564 N.Y.S.2d 1020 [4th Dept. 1990], lv denied 77 N.Y.2d 807, 569 N.Y.S.2d 610, 572 N.E.2d 51 [1991] [following Towne–Oller )). Nevertheless, in the case presently before us, the Commissioner of Taxation and Finance repudiates that rule of construction, arguing that it derives from a "formalistic distinction" between exclusions and exemptions that this Court established in Grace. The Commissioner argues that, in Matter of Mobil Oil v. Finance Adm'r of City of N.Y., 58 N.Y.2d 95, 99, 459 N.Y.S.2d 566, 446 N.E.2d 130 (1983), this Court overruled Grace sub silentio and held that the distinction between exemptions and exclusions, which was concededly drawn by the Court in Grace, has no force. Thus, the Commissioner maintains, "the Mobil Oil Court recognized" in 1983 that "both exemptions and exclusions should ... be construed in favor of the government and against the taxpayer. " However, the Commissioner's argument is contrary to the reading of Grace and Mobil Oil that both the courts and the Tribunal have employed since the 1980s, and the majority goes even further than the Commissioner. While the Commissioner argues that we should state that Mobil Oil overruled Grace in holding that the distinction between exemptions and exclusions has no force – an argument that is simply unsupported by the law – the majority simply denies that this Court has ever differentiated between exemptions and exclusions in the first place (see majority op. at 592–593, 107 N.Y.S.3d at 771–73, 131 N.E.3d at 878–80), ignoring decades of administrative and judicial authority to the contrary. The majority's reading of Grace is untenable.

In Grace, the Court explained:

"It is often said ... that ‘[a] statute which levies a tax is to be construed most strongly against the government and in favor of the citizen. The government takes nothing except what is given by the clear import of the words used, and a well-founded doubt as to the meaning of the act defeats the tax’ ( People ex rel. Mutual Trust Co. v. Miller, 177 N.Y. 51, 57 [1903] ; Matter of Voorhees v. Bates, 308 N.Y. 184, 188 [1954] ; see Matter of American Cyanamid & Chem. Corp. v. Joseph, 308 N.Y. 259, 263 [1955] ; American Locker Co. v. City of New York, 308 N.Y. 264, 269 [1955] ; cf. Gould v. Gould, 245 U.S. 151, 153, 38 S.Ct. 53, 62 L.Ed. 211 [1917] ). The principle is, however, applicable only in determining whether property, income, a transaction or event is subject to taxation. Thus, in each of the cases cited above, the issue was whether taxpayer's affairs were subject to the taxing statute at all (see People ex rel. Mutual Trust Co. v. Miller, 177 N.Y. 51, 53 , supra [corporate

franchise tax]; Matter of Voorhees v. Bates, 308 N.Y. 184, 187–188 , supra [unincorporated business tax]; Matter of American Cyanamid & Chem. Corp. v. Joseph, 308 N.Y. 259, 262 , supra [sales tax]; American Locker Co. v. City of New York, 308 N.Y. 264, 267 , supra [sales tax]; Gould v. Gould, 245 U.S. 151, 153 , supra [individual income tax] ).

"When, however, it is undisputed that the taxpayer's income is subject to the taxing statute, but he claims an exemption from taxation, a different rule applies. An exemption from taxation ‘must clearly appear, and the party claiming it must be able to point to some provision of law plainly giving the exemption’ ( People ex rel. Savings Bank of New London v. Coleman, 135 N.Y. 231, 234 [1892] ; see Matter of Young v. Bragalini, 3 N.Y.2d 602, 605–606 [170 N.Y.S.2d 805, 148 N.E.2d 143] [1958] ). Indeed, if a statute or regulation authorizing an exemption is found, it will be ‘construed against the taxpayer,’ although the interpretation should not be so narrow and literal as to defeat its settled purpose (see Engle v. Talarico, 33 N.Y.2d 237, 240 [351 N.Y.S.2d 677, 306 N.E.2d 796] [1973] ; People ex rel. Watchtower Bible & Tract Soc. v. Haring, 8 N.Y.2d 350, 358 [207 N.Y.S.2d 673, 170 N.E.2d 677] [1960] ; People ex rel. Mizpah Lodge v. Burke, 228 N.Y. 245, 247–248 [1920] ). This is because an exemption is not a matter of right, but is allowed only as a matter of legislative grace (cf., e.g., Colgate v. Harvey, 296 U.S. 404, 435 [56 S.Ct. 252, 80 L.Ed. 299] [1935] ).

‘‘A deduction is functionally a particularized species of exemption from taxation" ( 37 N.Y.2d at 196–197, 371 N.Y.S.2d 715, 332 N.E.2d 886 ).

To be sure, Grace does not expressly state that ambiguities in statutory exclusions are interpreted in favor of the taxpayer. It is also true that the Grace Court used the words "exemption" and "deduction," but did not use the word "exclusion," which is evidently the cause of the majority's confusion in this case. However, what the majority overlooks is that the precedent upon which the Court relied in Grace for the proposition that a statute levying a tax must be interpreted in favor of the taxpayer involves exclusions (see American Cyanamid, 308 N.Y. 259, 125 N.E.2d 247 [exclusion from sales tax for resales]; Voorhees, 308 N.Y. 184, 124 N.E.2d 273 [whether directing an orchestra for radio broadcasts fell within exclusion from definition of "unincorporated business"] ). Thus, both parties in the instant matter correctly acknowledge what has long been obvious to the bench and bar – in Grace, this Court distinguished between exemptions and exclusions for purposes of construing such provisions in tax statutes.

The majority insists on writing the word "exclusion" into the Grace decision, inaccurately citing Grace for the proposition that "when the matter at issue ‘is subject to the taxing statute,’ but the question is whether taxation is negated by a statutory exclusion or exemption, ‘a different rule applies’ " (majority op. at 592, 107 N.Y.S.3d at 772, 131 N.E.3d at 879, quoting Grace, 37 N.Y.2d at 196, 371 N.Y.S.2d 715, 332 N.E.2d 886 ). Grace explained that deductions are a species of exemption; it did not similarly categorize exclusions or mention them at all.

Compare Kimmel v. State, 29 N.Y.3d 386, 408, 57 N.Y.S.3d 678, 80 N.E.3d 370 (2017) ("It is appropriate to consider legislative history even where a statute's plain meaning is clear"); T–Mobile, 32 N.Y.3d at 609, 94 N.Y.S.3d 211, 118 N.E.3d 873 (considering legislative history even after concluding that the "plain language" of the tax statute at issue in that case encompassed the subject property); and Fumarelli v. Marsam Dev., Inc., 92 N.Y.2d 298, 307, 680 N.Y.S.2d 440, 703 N.E.2d 251 (1998) (rejecting employment of "overly general and self-canceling canons of construction" in favor of legislative history); with Anonymous v. Molik, 32 N.Y.3d 30, 37–41, 84 N.Y.S.3d 414, 109 N.E.3d 563 (2018) (claiming that resort may be had to legislative history only if the language is ambiguous or literal construction would lead to unreasonable consequences contrary to the purpose of the enactment, but although resolving the case mostly on the basis of the presumption against surplusage, nonetheless considering legislative history); Auerbach v. Board of Educ. of City School Dist. of City of New York, 86 N.Y.2d 198, 204, 630 N.Y.S.2d 698, 654 N.E.2d 972 (1995) (same, although less clearly resting on legislative history). Here, the admittedly ambiguous statutory text means that we must examine legislative history no matter which side of this debate one takes.

It bears emphasis that this Court repeated that distinction several years later in a case that majority also ignores, citing Grace for the proposition that statutory "exclusions" refer to properties "not covered because definitionally excepted," where as statutory "exemptions" refer to properties "which meet the statutory conditions precedent to regulation but are, as an act of legislative grace, nonetheless excepted" ( La Guardia v. Cavanaugh, 53 N.Y.2d 67, 80, 440 N.Y.S.2d 586, 423 N.E.2d 9 [1981] ). Moreover, the Division of Tax Appeals has recognized for decades that Grace "discusses the differing burdens of proof for an exemption from tax, as opposed to that for an exclusion from tax" ( Matter of Katz, 1994 WL 268115, *9, 1994 N.Y. Tax LEXIS 318, *21 [N.Y. St. Div. of Tax Appeals DTA No. 811673, June 9, 1994]; see Matter of Dunham's Resort Corp., 2004 WL 2016219, *7, 2004 N.Y. Tax LEXIS 183, *16 [N.Y. St. Div. of Tax Appeals DTA No. 819106, Sept. 2, 2004] [relying on Grace in explaining that "the burden of proof to show entitlement to an exemption ... (or) an exclusion is placed upon petitioner, though the burden (for exclusions) is a lighter one because exclusions are strictly construed against the taxing authority"]; Matter of 1605 Bookcenter, Inc., 1990 WL 204903, *11, *14, 1990 N.Y. Tax LEXIS 216, *28, *38–39 [N.Y. St. Div. of Tax appeals DTA No. 800121, May 17, 1990] [noting that Grace provides both that exemptions are strictly construed against the party claiming the exemption and that exclusions must be construed strictly in favor of the taxpayer] ). Similarly, the Appellate Division has long recognized this Court's distinction between exemptions and exclusions in Grace, and required that statutory exclusions be construed in the taxpayer's favor (see Matter of New York Life Ins. Co. v. State Tax Commn., 80 A.D.2d 675, 676, 436 N.Y.S.2d 380 [3d Dept. 1981], affd for reasons stated in App.Div. mem 55 N.Y.2d 758, 447 N.Y.S.2d 245, 431 N.E.2d 970 [1981] [citing Grace for the proposition that "where, as here, an exclusion rather than an exemption is involved, the statute must be strictly construed in favor of the taxpayer"]; Matter of Burger King v. State Tax Commn., 70 A.D.2d 447, 450, 421 N.Y.S.2d 668 [3d Dept. 1979], affd as mod 51 N.Y.2d 614, 435 N.Y.S.2d 689, 416 N.E.2d 1024 [1980] [same]; see also Matter of United Artists Theatre Circuit, Inc. v. State Tax Commn., 52 N.Y.2d 1013, 1014, 438 N.Y.S.2d 295, 420 N.E.2d 93 [1981], revg 76 A.D.2d 995, 996, 429 N.Y.S.2d 299 [3d Dept. 1980] [reversing "essentially for reasons stated in Presiding Justice A. Franklin Mahoney's dissenting opinion at the Appellate Division;" that dissenting opinion relied on Grace in concluding that exclusions, unlike exemptions, must be construed in the taxpayer's favor] ). In light of this jurisprudential history – now ironically dismissed by the majority as "revisionist analysis that ignores our case law" (majority op. at 594, 107 N.Y.S.3d at 773, 131 N.E.3d at 880) – it is simply disingenuous to fail to acknowledge that Grace drew a distinction between exemptions and exclusions for purposes of statutory construction, requiring that exemptions be construed in favor of the government, but that exclusions be construed in favor of the taxpayer.

The majority's failure to acknowledge the distinction drawn in Grace appears to be rooted in an attempt to emulate federal law in interpreting our state tax statutes (see majority op. at 593 n. 2, 107 N.Y.S.3d at 772 n. 2, 131 N.E.3d at 879 n. 2). The majority relies upon Mobil Oil, which the Commissioner argues overturned Grace. In Mobil Oil, the Court stated – without further discussion – that

"[w]hile it is the general rule that a statute which levies a tax is to be construed most strongly against the government and in favor of the taxpayer, the rule is otherwise with respect to the taxpayers' right to exclude items from taxation. In the case of statutory exclusions, the presumption is in favor of the taxing power" ( 58 N.Y.2d at 99, 459 N.Y.S.2d 566, 446 N.E.2d 130 [internal citation omitted] ).

The Mobil Oil Court did not expressly overrule Grace and, inasmuch as "[w]e do not overrule important authorities sub silentio" ( Pratt Inst. v. City of New York, 183 N.Y. 151, 161, 75 N.E. 1119 [1905] ), Mobil Oil should not be read as doing so.

In fact, the decision in Mobil Oil did not even cite Grace; rather, the Court relied upon Matter of Schwartzman, 262 App.Div. 635, 636, 30 N.Y.S.2d 882 (3d Dept. 1941), affd no opn 288 N.Y. 568, 42 N.E.2d 22 (1942), a case involving an exemption, not an exclusion. The Court of Appeals decision in Schwartzman simply affirmed, without opinion, a decision of the Appellate Division, Third Department. However, as explained above, the rule in the Third Department – prior to Mobil Oil and based upon our case law – was that, "while the taxpayer ordinarily must bear the burden of overcoming a tax assessment, where ... an exclusion rather than an exemption is involved, the statute must be strictly construed in favor of the taxpayer" ( New York Life Ins., 80 A.D.2d at 676, 436 N.Y.S.2d 380 ; see Burger King, 70 A.D.2d at 450, 421 N.Y.S.2d 668 ). Thus, when the Third Department decided Fairland Amusements v. State Tax Commn., 110 A.D.2d 952, 487 N.Y.S.2d 879 (3d Dept. 1985), revd 66 N.Y.2d 932, 498 N.Y.S.2d 796, 489 N.E.2d 765 (1985) shortly after Mobil Oil was handed down, it is not surprising that a dissenting opinion, in challenging the interpretation of an exclusion in favor of the government, stated the well-settled rule that, "in determining if there is an exclusion under the Tax Law, any ambiguities in the tax statute must be construed most strongly in favor of the taxpayer and against the government" ( id. at 954, 487 N.Y.S.2d 879 [Mikoll, J. dissenting] ). Nor is it surprising that this Court expressly agreed with the dissent in Fairland and reiterated our long-standing rule in interpreting the statutory language – providing for an exclusion – in favor of the taxpayer, stating "[w]e agree with the dissenters below that there is an ambiguity in the statutory scheme which must be construed most strongly in favor of the taxpayer and against the government" ( Fairland, 66 N.Y.2d at 934, 498 N.Y.S.2d 796, 489 N.E.2d 765 ). Thus, contrary to the majority's conclusion, Fairland supports Wegmans' argument that the statement in Mobil Oil was a syntactical error – the result of the Court using imprecise language in describing exclusions versus exemptions, as the Third Department correctly recognized six months after Fairland reiterated the rule as set forth in Grace (see Towne–Oller, 120 A.D.2d at 874 n., 502 N.Y.S.2d 544 ). In any event, even absent

The majority's attempt to distinguish Fairland fails. The question in Fairland was whether the sales of tickets for the plaintiff's portable amusement rides were definitionally excluded from taxation because the site where the rides were located was not a "place of amusement" as defined by Tax Law § 1101(d)(10) (110 A.D.2d at 953, 487 N.Y.S.2d 879 ). In other words, the question was whether the rides were "not covered because definitionally excepted" and, thus, an "exclusion" applied (La Guardia, 53 N.Y.2d at 80, 440 N.Y.S.2d 586, 423 N.E.2d 9 ). To the extent that this Court's subsequent decisions in Matter of Charter Dev. Co., L.L.C. v. City of Buffalo, 6 N.Y.3d 578, 582, 815 N.Y.S.2d 13, 848 N.E.2d 460 (2006) and Matter of 677 New Loudon Corp. v. State of N.Y. Tax Appeals Trib., 19 N.Y.3d 1058, 1060, 955 N.Y.S.2d 795, 979 N.E.2d 1121 (2012), cert denied 571 U.S. 952, 134 S.Ct. 422, 187 L.Ed.2d 280 (2013) used the terms exclusions and exemptions interchangeably, both of those cases involved exemptions (see Matter of HDV Manhattan LLC v. Tax Appeals Trib. of the State of N.Y., 156 A.D.3d 963, 967 & n. 4, 67 N.Y.S.3d 313 [3d Dept. 2017] ); thus, the Court was applying the traditional rule that ambiguities in tax statutes providing for exemptions must be resolved in favor of the government.

The majority has not even applied its rule of deference consistently. It defers to the Tax Appeals Tribunal's construction of section 1105(c)(1) – which is our job – but overrules the Tax Appeals Tribunal's application of "the rule of construction that requires exclusions from taxation to be strictly interpreted in the taxpayer's favor" (Tribunal Decision at 13) – which is arguably the Tribunal's job.

Fairland, Mobil Oil – based on a misreading of Appellate Division precedent and failing to cite Grace – cannot be read as overruling Grace sub silentio. Therefore, the rule remains that, in determining entitlement to a tax exclusion, tax statutes are "to be construed most strongly against the government and in favor of the citizen," but "if a statute or regulation authorizing an exemption is found, it will be construed against the taxpayer" ( Grace, 37 N.Y.2d at 196, 371 N.Y.S.2d 715, 332 N.E.2d 886 ).

II.

That said, I agree with the majority that reversal is required here. Wegmans concedes that, as the taxpayer, it bears the ultimate burden to establish its entitlement to the tax exclusion at issue. Moreover, the Tribunal's determination must be upheld unless shown to be irrational (see Matter of 677 New Loudon Corp. v. State of N.Y. Tax Appeals Trib., 19 N.Y.3d 1058, 1060, 955 N.Y.S.2d 795, 979 N.E.2d 1121 [2012], cert denied 571 U.S. 952, 134 S.Ct. 422, 187 L.Ed.2d 280 [2013] ; Grace, 37 N.Y.2d at 195–196, 371 N.Y.S.2d 715, 332 N.E.2d 886 ). Thus, "[i]f there are any facts or reasonable inferences from the facts to sustain it, the court must confirm the ... determination" ( Grace, 37 N.Y.2d at 195, 371 N.Y.S.2d 715, 332 N.E.2d 886 ). Even if any ambiguity in the statutory exclusion at issue is construed against the government – as the Tribunal did here, applying the traditional rule – Wegmans has failed to demonstrate that the Tribunal's interpretation is unreasonable. Accordingly, I agree that the information furnished cannot be deemed "personal or individual in nature" within the meaning of Tax Law § 1105(c)(1) ( Matter of ADP Automotive Claims Servs. v. Tax Appeals Trib., 188 A.D.2d 245, 248, 594 N.Y.S.2d 96 [3d Dept. 1993], lv denied 82 N.Y.2d 655, 602 N.Y.S.2d 804, 622 N.E.2d 305 [1993] ).

I reiterate that the new rule pronounced by the majority here – namely, that statutory exclusions must be construed against the taxpayer – is inconsistent with our precedent. Significantly, however, I note that even the majority does not contend that it is necessary to construe section 1105(c)(1)'s exclusion against the taxpayer in order to reach the result that it does. Therefore, I am also compelled to emphasize that the majority's statements regarding statutory construction are, in fact, dicta. The majority's declaration that New York taxpayers are now deprived of a protection they have long enjoyed – in a misguided attempt to resolve confusion in the lower courts that never existed – is not only wrong, but completely unnecessary.

FAHEY, J. (dissenting).

I respectfully dissent. The key question on this appeal is the distinction in the interpretation of tax exclusions and tax exemptions. For decades the Appellate Division has correctly analyzed this area of law in holding that an exclusion should be interpreted in favor of the taxpayer (see Matter of New York Life Ins. Co. v. State Tax Commn., 80 A.D.2d 675, 676, 436 N.Y.S.2d 380 [3d Dept. 1981] ["where ... an exclusion rather than an exemption is involved, the (tax) statute must be strictly construed in favor of the taxpayer"], affd for reasons stated 55 N.Y.2d 758, 447 N.Y.S.2d 245, 431 N.E.2d 970 [1981] ; Matter of Burger King v. State Tax Commn., 70 A.D.2d 447, 450, 421 N.Y.S.2d 668 [3d Dept. 1979] [holding that an exclusion from taxation is "to be strictly construed in favor of the taxpayer"], affd as mod 51 N.Y.2d 614, 435 N.Y.S.2d 689, 416 N.E.2d 1024 [1980] ; see also Matter of United Artists Theatre Circuit v. State Tax Commn., 52 N.Y.2d 1013, 1014, 438 N.Y.S.2d 295, 420 N.E.2d 93 [1981], revg 76 A.D.2d 995, 996, 429 N.Y.S.2d 299 [3d Dept. 1980] ; see generally Matter of Grace v. New York State Tax Commn., 37 N.Y.2d 193, 196, 371 N.Y.S.2d 715, 332 N.E.2d 886 [1975] ). I agree with the Appellate Division order in this case, and I adopt both its holding and its reasoning as my own.

WILSON, J. (dissenting).

If there is any fixed star in our statutory construction constellation, it is that "the primary consideration of courts in interpreting a statute is to ascertain and give effect to the intention of the Legislature" ( Riley v. County of Broome, 95 N.Y.2d 455, 463, 719 N.Y.S.2d 623, 742 N.E.2d 98 [2000] ). We announced that principle as early as 1855 ( Corwin v. New York & E.R. Co., 13 N.Y. 42, 48 [1855] ), reiterated it earlier this month ( Nadkos Inc. v. Preferred Constr. Ins. Co. Risk Retention Group LLC, 34 N.Y.3d 1, 108 N.Y.S.3d 375, 132 N.E.3d 568, 2019 N.Y. Slip Op. 04641, 2019 WL 2424488 [Ct. Apps. June 11, 2019] ), and repeatedly reasserted it in the intervening years (McKinney's Cons Laws of NY, Book 1, Statutes § 92[a] [collecting cases] ). Nevertheless, neither the Tax Appeals Tribunal, nor any appellate court—including the majority in this case—has attempted to determine with the usual tools of statutory interpretation what the legislature meant by the words "personal or individual" in Tax Law § 1105(c)(1), the tax exclusion now before us.

Without attempting to discern the legislature's meaning, the majority upholds the Tribunal's determination that the grocery price reports at issue here, "CPAs," are "not personal or individual in nature because [they were] collected from prices on supermarket shelves, which are publicly available, widely-accessible, and not confidential" (majority op. at 595, 107 N.Y.S.3d at 774, 131 N.E.3d at 881). I disagree. The statute says nothing about the confidentiality or public availability of the information. It would have been simple enough for the legislature to have written "confidential"; it did not do so. The Appellate Division unanimously held that "to expand the interpretation of Tax Law § 1105(c)(1) to allow for the Tribunal's denial of the subject tax exclusion based solely on the fact that the information ultimately furnished derived from a public source would, under the circumstances presented, serve to defeat the purpose of the exclusion" ( Matter of Wegmans Food Mkts., Inc. v. Tax Appeals Tribunal, 155 A.D.3d 1352, 1357, 65 N.Y.S.3d 296 [3d Dept. 2018] ). I agree. But the Appellate Division, too, failed to conduct any real investigation into what the legislature meant when it used the words "personal or individual."

Instead, the lower courts and the Tax Appeals Tribunal reached their decisions principally by relying upon their own prior cases, cherry-picked to avoid others that are inconsistent. Not one of those cases attempted to determine the legislature's meaning when it enacted Tax Law § 1105(c). Cut loose from the usual anchor to text, structure, and history, the lower courts and the Tribunal have incorporated varying and inconsistent interpretations of the exclusion based, in part, on considerations anathema to the statutory scheme, properly understood.

I agree with the majority that the prior decisions of the Appellate Division (two of which were summarily affirmed by our Court) have not clarified the statute's meaning. Despite that recognition, the majority absolves itself of our duty to "give effect to the intention of the legislature" and resolve the pure question of statutory interpretation presented here. Instead, the majority assumes the soundness of the Tax Appeals Tribunal's interpretation, pausing only to dispense pure obiter dicta denigrating a 40–year–old principle of statutory interpretation distinguishing tax exemptions from tax exclusions.

Our charge is to determine the statute's meaning. I have attempted to do so, by reviewing all of the materials pertinent to statutory interpretation, including text, structure, legislative history, and relevant underlying presumptions. So armed, I conclude that the exclusion here operates quite differently from the way the Tribunal has interpreted it, such that the Tribunal's decision must be annulled.

I.

The Tax Appeals Tribunal is the agency charged with the administration of the tax statutes.

"Where the interpretation of a statute or its application involves knowledge and understanding of underlying operational practices or entails an evaluation of factual data and inferences to be drawn therefrom, the courts regularly defer to the governmental agency charged with the responsibility for administration of the statute. If its interpretation is not irrational or unreasonable, it will be upheld" ( Colt Indus., Inc. v. New York City Dept. of Fin., 66 N.Y.2d 466, 470–471, 497 N.Y.S.2d 887, 488 N.E.2d 817 [1985] [quoting Kurcsics v. Merchants Mut. Ins. Co., 49 N.Y.2d 451, 459, 426 N.Y.S.2d 454, 403 N.E.2d 159 (1980) ] ).

Our deference to the Tribunal has an important, foundational limit: "where the question is one of pure statutory reading and analysis, dependent only on accurate apprehension of legislative intent, there is little basis to rely on any special competence or expertise of the administrative agency. In such a case, courts are free to ascertain the proper interpretation from the statutory language and legislative intent" ( International Union of Painters & Allied Trades v. New York State Dept. of Labor, 32 N.Y.3d 198, 209, 88 N.Y.S.3d 136, 112 N.E.3d 1259 [2018] [quoting Seittelman v. Sabol, 91 N.Y.2d 618, 625, 674 N.Y.S.2d 253, 697 N.E.2d 154 (1998) ] ). To know whether the Tax Appeals Tribunal's interpretation of the statute is rational or reasonable, we must first know what the statute means. Otherwise, deference would mean the unbounded authority of an administrative agency to make law—a usurpation of the legislative function ( N.Y. Const, art III § 1 ). Indeed, "the interpretation of the laws is the proper and peculiar province of the courts" (The Federalist No. 78 [Alexander Hamilton] ).

How, then, do we "ascertain and give effect to the intention of the Legislature" ( Riley, 95 N.Y.2d at 463, 719 N.Y.S.2d 623, 742 N.E.2d 98 )? "We begin with the plain language of the statute, which is the clearest indicator of legislative intent" ( T–Mobile Northeast, LLC v. DeBellis, 32 N.Y.3d 594, 607, 94 N.Y.S.3d 211, 118 N.E.3d 873 [2018] ). That "plain text" analysis incorporates all of the tools we use to make sense of text—the "plain meaning" of the words ( DaimlerChrysler Corp. v. Spitzer, 7 N.Y.3d 653, 660, 827 N.Y.S.2d 88, 860 N.E.2d 705 [2006] ), construing "words of ordinary import with their usual and commonly understood meaning" ( Yaniveth R. v. LTD Realty Co., 27 N.Y.3d 186, 192, 32 N.Y.S.3d 10, 51 N.E.3d 521 [2016] [quoting Rosner v. Metropolitan Prop. & Liab. Ins. Co., 96 N.Y.2d 475, 479–480, 729 N.Y.S.2d 658, 754 N.E.2d 760 (2001) ] ), considering semantic canons of construction (see Matter of Kese Indus. v. Roslyn Torah Found., 15 N.Y.3d 485, 491, 914 N.Y.S.2d 704, 940 N.E.2d 530 [2010] ), as well as the surrounding words (see Lemma v. Nassau County Police Officer Indem. Bd., 31 N.Y.3d 523, 528, 80 N.Y.S.3d 669, 105 N.E.3d 1250 [2018] ) and the larger statutory structure (see Albany Law School v. New York State Off. of Mental Retardation and Dev. Disabilities, 19 N.Y.3d 106, 120, 945 N.Y.S.2d 613, 968 N.E.2d 967 [2012] ).

In addition to the plain language of the statute, "inquiry should be made into the spirit and purpose of the legislation, which requires examination of the statutory context of the provision as well as its legislative history" ( Nostrom v. A.W. Chesterton Co., 15 N.Y.3d 502, 507, 914 N.Y.S.2d 725, 940 N.E.2d 551 [2010] [quoting ATM One, LLC v. Landaverde, 2 N.Y.3d 472, 477, 779 N.Y.S.2d 808, 812 N.E.2d 298 (2004) ] ). The question of "pure statutory reading and analysis," as to which we afford agencies no deference, includes "construction based on its legislative history" ( Painters, 32 N.Y.3d at 209, 88 N.Y.S.3d 136, 112 N.E.3d 1259 ). Thus, in Matter of Liquidation of Union Indem. Ins. Co. of New York, 92 N.Y.2d 107, 124, 677 N.Y.S.2d 228, 699 N.E.2d 852 (1998), we explained that when the case presented questions requiring "examination of various statutory provisions contained in articles 74 and 76 of the Insurance Law, the legislative history of these provisions, and case precedent," the questions remained "ones of pure statutory reading and analysis, dependent only on accurate apprehension of legislative intent [such that] no justification for judicial deference to the [agency's] interpretations is warranted" ( id. at 124, 677 N.Y.S.2d 228, 699 N.E.2d 852 ).

Our precedents do not definitively establish any hierarchy among these several tools of statutory interpretation—that is, whether some cannot be resorted to when others on their own may resolve the ambiguities in the statute sufficient to decide the case (see generally Adam Samaha, If the Text is Clear—Lexical Ordering in Statutory Interpretation, 94 Notre Dame L Rev 155 [2018] ).1 Our cases are clear, however, that when engaging in "pure statutory reading and analysis" we are obliged to use all the tools of the judicial trade to "accurate[ly] apprehend[d] ... legislative intent" before considering whether to defer to an agency's interpretation of a statute ( Kurcsics v. Merchants Mut. Ins. Co., 49 N.Y.2d 451, 459, 426 N.Y.S.2d 454, 403 N.E.2d 159 [1980] ; see also Matter of Dental Socy. v. Carey, 61 N.Y.2d 330, 335, 474 N.Y.S.2d 262, 462 N.E.2d 362 [1984] ["Whether administrative action violates applicable statutes and regulations is a question within the traditional competence of the courts to decide"] ).

Courts should defer to an agency's statutory interpretation (if not irrational or unreasonable) only after employing all of the tools of statutory interpretation, because only at that point will the agency's "special competence or expertise" be needed to apply the statute within the bounds of the judicially-determined statutory meaning ( Painters, 32 N.Y.3d at 209, 88 N.Y.S.3d 136, 112 N.E.3d 1259 ). Once the courts have interpreted the statute as best they can, "the judicial function is exhausted" as a descriptive matter, as well as a matter of doctrine ( Howard v. Wyman, 28 N.Y.2d 434, 438, 322 N.Y.S.2d 683, 271 N.E.2d 528 [1971] ). Although there are many cases in which we have deferred to an agency's expertise after we have construed a statute, those should not be mistaken for a rule requiring deference to every agency construction of the legislature's acts unless it reaches the point of irrationality. It would be an error of constitutional dimension for us to delegate our statutory construction role to any agency under the guise of deference. Doing so would empower agencies to do via interpretation what the legislature did not do via legislation (see generally LeadingAge New York, Inc. v. Shah, 32 N.Y.3d 249, 90 N.Y.S.3d 579, 114 N.E.3d 1032 [2018] ).

The majority skips past the legislature's intent.2 Ignoring the numerous cases in which we insisted on engaging in statutory interpretation before turning to agency deference—including our unanimous decision last month ( National Energy Marketers Assn., 33 N.Y.3d 336, 347 n. 5, 103 N.Y.S.3d 1, 126 N.E.3d 1041 [2019] )—the majority jumps right to "whether the Tribunal rationally determined that those information services were not excluded from the sales tax" (majority op. at 595, ––– N.Y.S.3d at ––––, ––– N.E.3d at ––––). But rationality must be measured against the legislature's action; if not, against what are we measuring it? The first and most important question before us is what the statute means, or at least our best understanding of what the statute includes or excludes; we ask whether the agency's interpretation is acceptable only once we have measured the metes and bounds of the range of statutory meanings ourselves. I therefore turn to the question the majority avoids: what does Tax Law § 1105(c)(1)'s exclusion mean? II.

The majority's inattention to the statute's meaning is particularly worrisome because this is our first encounter with the exclusion language in Tax Law § 1105(c)(1), setting aside our opinion-less affirmances of Appellate Division decisions in New York Life Ins. Co. v. State Tax Commn., 80 A.D.2d 675, 676, 436 N.Y.S.2d 380 (3d Dept. 1981), affd sub nom. Metro. Life Ins. Co. v. Tax Commn. of State, 55 N.Y.2d 758, 447 N.Y.S.2d 245, 431 N.E.2d 970 (1981) and Allstate Ins. Co. v. Tax Commn. of State of N.Y., 115 A.D.2d 831, 495 N.Y.S.2d 789 (3d Dept. 1985), affd 67 N.Y.2d 999, 502 N.Y.S.2d 1004, 494 N.E.2d 109 (1986).

Tax Law § 1105(c)(1) imposes sales tax on (emphasis added):

(c) The receipts from every sale, except for resale, of the following services:

(1) The furnishing of information by printed, mimeographed or multigraphed matter or by duplicating written or printed matter in any other manner, including the services of collecting, compiling or analyzing information of any kind or nature and furnishing reports thereof to other persons, but excluding the furnishing of information which is personal or individual in nature and which is not or may not be substantially incorporated in reports furnished to other persons , and excluding the services of advertising or other agents, or other persons acting in a representative capacity, and information services used by newspapers, electronic news services, radio broadcasters and television broadcasters in the collection and dissemination of news, and excluding meteorological services.

All agree that the services at issue in this appeal fall into the general taxing clause; RetailData is in the business of "collecting, compiling, or analyzing information of any kind of nature and furnishing reports thereof to other persons" (see Audell Petroleum Corp. v. New York State Tax Commn., 69 N.Y.2d 818, 819–820, 513 N.Y.S.2d 962, 506 N.E.2d 533 [1987] ["sale of the service of furnishing information by a business whose function it is to collect and disseminate information" is taxable under this subsection] ). The question is what information services fall into the first of the subsection's exclusions: "excluding the furnishing of information which is personal or individual in nature and which is not or may not be substantially incorporated in reports furnished to other persons."

Read alone, the text of the "personal or individual exclusion" is susceptible of several meanings. The phrase "that is personal or individual in nature" could either modify the noun "information" (i.e. the information must be "personal or individual in nature") or the present participle phrase "furnishing of information" (i.e. "the furnishing " of the information must be "personal or individual in nature"). Likewise, the second clause of the exclusion ("reports furnished to other persons") could refer, on the face of the text, to the specific information "furnished" to the first party (the specific data must not be sold to a third party or commoditized), or to the nature of the information furnished (the report or other tangible output representing the service may not be of the type that can be sold to a third party or commoditized). Indeed, it is not clear whether the second clause of the exclusion is disjunctive—that is, certain activities might fall into the "personal or individual" prong only to be thrown out by the "reports to other persons" prong—or part of a single integrated definition, helping to define what "personal or individual" means.

The remaining words in the clause are of limited help. The advertising exclusion clearly would reach, for example, brochures providing information about canned tuna to a wide audience (which all agree would not be subject to the exclusion because the "reports" would be available to all sorts of persons). The newsgathering exclusions reinforce the general exemption of newspapers and related services from sales taxation ( Tax Law § 1115[a][5] ). "The services ... of persons acting in a representative capacity" is as unclear on its face as the exclusion before us. To decide this case, we must resolve the ambiguity on the face of the statute. If "personal or individual" refers to the nature of the services provided, the CPAs qualify for the exclusion: they were custom-created for Wegmans, built on observations of the world and compiled into a report only Wegmans could read, containing precisely and exclusively the information Wegmans specified. If, by contrast, "personal or individual" refers to the source of the information provided, it is likely that, as the majority explains, the CPAs, drawing as they do on commonly-available, public information on grocery store prices, likely do not fall into the exclusion.

The remaining clauses of Tax Law § 1105(c) are of little assistance, because none speaks to services that can be considered—even generously—to be "information services" of the type captured by subsection (c)(1); indeed subsection (c)(9) expressly excludes whatever was taxable under (c)(1) from its scope.

A.

The majority chooses the latter statutory interpretation by throwing up its hands, declaring the Tribunal's determination not unreasonable, and citing—as it is heading out the door—two Appellate Division cases ( Matter of ADP Automotive Claims Servs. v. Tax Appeals Trib., 188 A.D.2d 245, 248, 594 N.Y.S.2d 96 [3d Dept. 1993] ; Matter of Rich Prods. Corp. v. Chu, 132 A.D.2d 175, 177–178, 521 N.Y.S.2d 865 [3d Dept. 1987] ) that ostensibly support its position. Those cases, however, do not examine the legislative or statutory history of the "personal or individual" exclusion, and do not themselves rely on any other decisions that do. Instead, each cites to a daisy chain of cases, ultimately resting on nothing at all.

ADP Automotive relies for its interpretation of the exclusion on Towne–Oller and Assoc., Inc. v. State Tax Commn., 120 A.D.2d 873, 874, 502 N.Y.S.2d 544 (3d Dept. 1986) ) and Rich Prods . Towne–Oller rests its reasoning solely on New York Life Ins. Co. v. State Tax Commn., 80 A.D.2d 675, 678, 436 N.Y.S.2d 380 [3d Dept. 1981], affd sub nom. Metro. Life Ins. Co. v. State Tax Commn. of State, 55 N.Y.2d 758, 447 N.Y.S.2d 245, 431 N.E.2d 970 [1981] ), which found—correctly—that a private detective agency's writing of individualized reports on particular persons for individual clients fell into the exclusion. Although New York Life involved the gathering of some information that was substantially less public than supermarket prices, the Appellate Division's holding rested not on the nature of the information collected, but on the customized nature of the reports delivered: "the primary basis of the report[ ] is tailored in each instance to the particular specifications as promulgated by the petitioner company in its request. It is somewhat difficult to imagine how any information could be more personal or individual" ( 80 A.D.2d at 677, 436 N.Y.S.2d 380 ).

New York Life made the additional observation that the Tribunal's interpretations of section 1105(c)(1) exhibited "vacillation, inconsistency and obvious doubt concerning the [Tribunal's] own interpretation of the statute" (id. at 678, 436 N.Y.S.2d 380 ).

Rich Prods. held that customization of reports "in some respects to respond to the needs of the particular client is not dispositive of entitlement to the exclusion, particularly where, as here, the information contained therein is derived from a single data repository which itself is not confidential and is widely accessible." The court in Rich Prods. conducted no investigation into the meaning of "personal or individual," instead explaining that "[t]o rule otherwise would be inconsistent with Towne–Oller, New York Life, Allstate Ins. Co. v. Tax Commn. of State of N.Y., 115 A.D.2d 831, 834, 495 N.Y.S.2d 789 (3d Dept. 1985), affd sub nom. Allstate Ins. Co. v. Tax Commn., 67 N.Y.2d 999, 502 N.Y.S.2d 1004, 494 N.E.2d 109 (1986) and Twin Coast Newspapers, Inc. v. State Tax Commn., 101 A.D.2d 977, 477 N.Y.S.2d 718 (3d Dept. 1984).

Twin Coast concerned a publisher of a weekly import and export bulletin, widely distributed, who permitted subscribers to purchase excerpts of those bulletins by specifying which portions they wanted to receive. Twin Coast contained no examination of the legislature's intent, and its holding is a straightforward application of the statutory language "is not or may not be substantially incorporated in reports furnished to other persons," because the excerpts were merely copies of portions of the (taxable) bulletins.

Allstate Ins. Co. v. Tax Commn. of State of N.Y., 115 A.D.2d 831, 495 N.Y.S.2d 789 (3d Dept. 1985), affd 67 N.Y.2d 999, 502 N.Y.S.2d 1004, 494 N.E.2d 109 (1986), was decided solely on the ground that a declaratory judgment action was not the proper vehicle to challenge the imposition of tax. Although the opinion states that section 1105(c)(1) "does not apply to information filed with a governmental agency as a public record to which there is unlimited public access," that statement is dicta (cf. People v. Onofre, 51 N.Y.2d 476, 493, 434 N.Y.S.2d 947, 415 N.E.2d 936 [1980] [noting the "limited precedential value of a summary affirmance"]; Mandel v. Bradley, 432 U.S. 173, 176, 97 S.Ct. 2238, 53 L.Ed.2d 199 [1977] ["a summary affirmance is an affirmance of the judgment only ... not necessarily the reasoning by which it was reached"] ). I also note that Allstate itself relied only on two cases: New York Life, which cuts against the Tribunal's position, and Twin Coast Newspapers. In sum, the two cases on which the majority relies turn out to be turtles all the way down, lacking any grounding in legislative intent.

Oddly, the parties and the majority fail to mention the one decision of our Court that bears on whether "personal or individual" should be read as relating to the information contained in the report (i.e., are the items of information in the report ones we would call "personal" or "individual") or, instead, as relating to the information service provided (i.e., was the service provided "personal" or "individual" to the recipient). In Audell, we held that the tax levied under section 1105(c)(1) was levied on the service, not the information: "As the statute and the implementing regulations indicate, it is the sale of the service of furnishing information by a business whose function it is to collect and disseminate information which is taxable under Tax Law § 1105(c)(1) and not the mere sale of information" ( 69 N.Y.2d at 819–20, 513 N.Y.S.2d 962, 506 N.E.2d 533 ). It would be incongruous, absent legislative direction to the contrary, to read the exclusion to concern the "personal or individual" character of the underlying information when we have held that the tax itself is imposed on the service provided to the client, not the underlying information.

B.

The legislative history, ignored by the majority, makes the meaning of the personal or individual exclusion clear: "personal or individual" was meant to distinguish generic information services from customized ones.

Although the majority characterizes my conclusion that "personal or individual" means "custom" as "speculative," "unsupported" and "meandering," that conclusion turns on the answer to a very straightforward question: was "personal and individual" meant modify the service or the information? Every bit of the legislative history, as well as our decision in Audell, points to the former, not the latter. A service that is "personal" or "individual" is specific to a customer, i.e., custom.

Save for a brief period in 1933, New York had no statewide sales tax until 1965, when it was enacted as part of Governor Rockefeller's Executive Budget for that year. The information services tax and the exclusion were both part of that original statewide sales tax (L 1965, Ch 93, § 1); indeed, the text of the present Tax Law § 1105(c)(1) is identical to that adopted in 1965, with the exception of the additional exclusion for "meteorological services" adopted by the legislature (L 1995, Ch 373) to overturn a contrary Tax Appeals Tribunal holding made some decades later (see Governor's Message, Bill Jacket at 5, L 1995 Ch 373).

The statewide sales tax did not emerge, like Botticelli's Venus, fully-formed from the Governor's budget submission. Instead, the Governor's proposal was built on the foundation of the existing sales taxes levied by localities. Except for a one-off, one-year one-percent sales tax imposed in 1933 (see Robert B. Ward, New York State Government [2d Ed, 2006] ), all prior sales taxes in the State had been levied by local governments pursuant to general legislative authorization—originally limited to New York City (L 1934, Ch 873), but eventually extended to other local governments (L 1954, Ch 278). All contemporaneous discussion of the state's 1965 tax law, as well as the parties' arguments about the legislative history of the information services tax, begins from the understanding that the information services sales tax was based on the prevailing sales tax on information services imposed by New York City.

The Governor's 1965 Budget Message is circumspect about the source of the proposed sales tax act's language, but makes plain that the purpose of the statewide tax is to harmonize local sales taxes (and adjusts other tax revenue flows to compensate New York City for a mandated one-point reduction in the city's sales tax). The Legislative Annual for L 1965, Ch 93 makes it clear that the statewide sales tax was constructed by looking to the existing localities' laws and drawing into its text taxing clauses from local laws (New York State Legislative Annual 1965, at 432–435); the Annual also explains that services that were then taxed by New York City, including "information services," which were not taxed by other localities, would be part of the broader tax base (id., see also Marilyn Rubin, A Guide to New York State Taxes at 31 [2011], http://pjsc.magikcms.com/Tax% 20guides/StateGuideWeb.pdf [state uniform tax based on NYC sales taxes as they stood in 1965] ).

In 1965, New York City's information services tax local law read as follows (N.Y.C Admin Code § N46–2.0 [5–a] [adopted by LL 1952, No. 78, July 1] ):

"[The City imposes a] tax of three per cent upon the receipts from every sale of information services involving the furnishing of printed, mimeographed, multigraphed matter or matter duplicating written or printed matter in any other manner, other than

professional services and services of employees, agents or other persons acting in a representative or fiduciary capacity or information services furnished to newspapers. Information services" shall mean and include the services of collecting. compiling or analyzing information of any kind or nature and furnishing reports thereof to other persons."

Large sections of that language are nearly word-for-word identical to the language that became Tax Law 1105(c)(1), once one transposes the definition section to the same place in the statute:

L 1965, ch 93 (Statewide) Administrative Code § N46-2.0 (NY City) "The furnishing of information by "information services involving the printed, mimeographed or multigraphed furnishing of printed, matter or by duplicating mimeographed, multigraphed matter written or printed matter in any or matter duplicating written or other manner, including the services printed matter in any other manner of collecting, compiling or [includ(ing) the services of collecting, analyzing information of any kind compiling or analyzing information or nature and furnishing reports of any kind or nature and thereof to other persons, but excluding furnishing reports thereof to other the furnishing of information persons], other than professional which is personal or individual in services and services of employees, nature and which is not or may not agents or other persons acting in a be substantially incorporated in representative or fiduciary capacity reports furnished to other persons, or information services furnished to and excluding the services of newspapers." advertising or other agents, or other persons acting in a representative capacity, and information services used by newspapers, radio broadcasters and television broadcasters in the collection and dissemination of news."

There is one significant variation between the State and City information services taxes: the City law excludes "professional services" from taxation, whereas the State language substitutes the phrase "personal or individual services." As it turns out, it was the New York City tax regulations (not a local law approved by the City Council) that provided the "personal or individual" language that wound up in section 1105(c). The regulation is worth quoting at some length (N.Y. City Department of Finance Regulations, Sales and Compensating Use Taxes [11 RCNY] art 98 [1964] ):

"Effective July 1, 1952, a tax is imposed upon the receipts from every sale or use of information services involving the furnishing of printed, typewritten,

written, mimeographed, multigraphed matter or matter duplicating written or printed matter in any other manner, other than professional services and services of employees, agents, or other persons acting in a representative or fiduciary capacity, or information services furnished to newspapers.

"Information services" means and includes the services of collecting, compiling, and analyzing information of any kind or nature, and furnishing reports thereof to other persons. Included in but not limited to the type of information services that are subject to the tax are the services of furnishing credit information,

statistical information, building and construction information, stock market analyses, and advisory services information, advertising surveys, radio and television surveys, racing and other sports information, tax information, and numerous other services involving the collecting, compiling, or analyzing of information of any kind or nature and furnishing reports thereof to other persons.

... The furnishing of information, including a written report, to a person which is personal or individual in nature and which is not or may not be substantially incorporated in reports furnished to other persons is not deemed to be an information service within the meaning of the law, and is not subject to the tax. In such case, the person furnishing the information is required to pay the tax on the purchases of tangible personal property

used by him in connection therewith.

To illustrate: (1) an investment counselor who examines and analyzes the investment needs of a particular client and who renders a report recommending a portfolio of services for investment by such client is not deemed to be furnishing information services. (2) A private detective agency which makes a special investigation at the request of another and renders a report of such investigation is not deemed to be furnishing information services."

The New York City regulation, read in conjunction with the local law it was interpreting, makes clear that the "personal or individual" phrase was meant to broaden the City's exclusion for "professional services" (the services of "agents" being captured in a separate exclusion). The legislature in 1965 followed suit by adopting the broader "personal or individual" language of the City's regulation instead of using the "professional services" language from the New York City local law.

The claim that the State aimed to copy the City regulation language to capture and define "professional services" is bolstered by the Legislative Annual, which explained that "despite [the] broad tax base [of the statewide law], many sales of property and services would not be taxable under this bill. In addition to the specific exclusions set forth above, professional, fiduciary, consulting, advertising and transportation services would not be taxable" (New York State Legislative Annual 1965, at 433). The "personal or individual" exclusion is the only provision of the 1965 tax law that could possibly be construed to capture "professional" or "consulting" services—indeed, the only use of the word "professional" in the text of the 1965 statewide sales tax law relates to circus performers ( Tax Law § 1116[c][2][B] ), which, despite shenanigans at firm holiday parties, cannot encompass the entire class of professionals in New York State. Because the state legislature took the New York City information tax and applied it statewide, I next examine the legislative history of the New York City information tax. The New York City local law that adopted the information services tax (LL 1952, No. 78, July 1), was an attempt to regulate information services whose published reports had been excluded from the existing tax on retail sales of personal property by a landmark decision of this Court: Dun & Bradstreet, Inc. v. City of New York, 276 N.Y. 198, 11 N.E.2d 728 (1937). There, New York City sought to tax a "mercantile agency which furnishes to its subscribers information respecting the financial standing of persons engaged in business" compiled in reference books ( id. at 202, 11 N.E.2d 728 ). The City reasoned that the books were goods, and thus were subject to the City's "tax on the sale of tangible personal property." We disagreed, in part because the City's sales tax included a specific section for services and in that section taxed only certain utility services (implying that all other services were excluded from taxation), and in part because information services that generated personal property did not constitute the sale of personal property ( id. at 204–205, 11 N.E.2d 728 ):

That the state legislature chose to use the regulation's "personal or individual" gloss on the word "professional" and not the NYC tax language "professional" can be explained by the State's relative freedom, compared to the City, to broaden the exclusion. The enabling act permitting New York City to impose sales taxes between 1934 and 1965 incorporated a substantive ban on New York City taxation of professional services—a ban reflected in the Admin Code N46–2.0(5–a) language (see Glushak v. City of New York, 6 A.D.2d 381, 384, 178 N.Y.S.2d 33 [1st Dept. 1958] ). However, the courts—including this Court—read "professional" narrowly, encompassing only a small set of licensed professionals (see e.g., Voorhees v. Bates, 308 N.Y. 184, 188, 124 N.E.2d 273 [1954] ). The legislature's adoption, in the statewide taxation law, of the regulation's language rather than the local law language evidences its decision that the exclusion from taxation would not be limited to information services provided by licensed professionals, but would extend to information services provided by professionals in a much more generic sense (i.e., "white collar work").

"It is true that in rendering services to its subscribers, it delivers to them reference books, the title of which remains in appellant, but the subscribers are expressly forbidden to let any one else see or use such books and they are notified not to rely upon the ratings given in the books but in all cases when extending credit to consult the detailed reports in the possession of appellant.

No charge is made to the subscribers for the use of the reference books separate and apart from the charge for services rendered and the books cannot be obtained in any other way. The information furnished to subscribers orally, in typewriting and in the reference books is confidential and personal in character. It is not and cannot be, under the subscription contracts, disclosed to the public.

The information collected by appellant at great expense is secured to enable it to furnish to its subscribers detail information to guide them in making sales and in extending credit. The information furnished is of value to the subscribers and for it they pay but not for the paper upon which the information is conveyed or for the reference books which are only guides to assist in the rendition of appellant's service. One does not think of a telephone company as a seller of books to its subscribers. It renders a service. To make that service efficient, it furnishes its subscribers with books containing a list of its subscribers with their call numbers. ‘The paper is a mere incident; the skilled service is that which is required.’ "

The intent of the 1952 law, then, was to tax the "information services" that the Court excluded from taxation in Dun & Bradstreet, even though those services provided information that, because of a contractual provision preventing the subscriber from sharing the contents of the books, was "confidential and personal in character" ( id. at 205, 11 N.E.2d 728 ). Conversely, the example given in the City's regulation of "an investment counselor who examines and analyzes the investment needs of a particular client and who renders a report recommending a portfolio of services for investment by such client" was excluded from taxation as an information service "personal or individual in nature," even though the information provided surely drew from public data (historical trading prices, debt/equity ratios and profits, for example). Same too for the City regulation's other example of a "private detective agency which makes a special investigation at the request of another" – with no mention of any necessity that the report be based on nonpublic information.

This legislative history helps to resolve the meaning of Tax Law § 1105(c)(1) because it shows that the legislature, in its choice of "personal and individual," focused on the character of the information service (namely, the customized nature of information delivered by professional service providers), and not the nature of the information collected by the vendor. Dun & Bradstreet's volumes were taxable under the City law even though the information it provided was strictly confidential to its clients; investment counselor reports were not taxable even when they relied on public information. Likewise, the legislative history demonstrates that the "may be or is not incorporated into reports furnished to others" language in the exclusion is not a separate requirement but an integral part of the more definite professional services exception, ensuring that true services—those where the information has been tailored to the personal or individual needs of the client—are exempt from taxation, but the kinds of services that are commoditized and are or can be provided outside the one-on-one bespoke client-professional relationship are captured by the taxing clause (Dun & Bradstreet services, or a newsletter produced by a specialist law firm for a fee to a large client list supplying the same information to several of its clients).

The understanding of the "personal or individual" exclusion from legislative history also comports with a commonsense interpretation of the statute, once we understand that the "personal or individual" exclusion is meant to exclude from taxation, among other things, professional and consulting services. To use a familiar example to most readers of this opinion, consider the services of a law firm. A law firm is often called upon to provide legal advice to a client on some proposed course of action. The information given to the law firm about the course of action is, naturally, "personal or individual" to the client. But the information the law firm gives the client may not be—indeed, much of it will not be, as law firm advice is founded (or ought to be founded) on law, all of which is or should be accessible to the public (see generally Banks v. Manchester, 128 U.S. 244, 253, 9 S.Ct. 36, 32 L.Ed. 425 [1888] ["law ... binding every citizen, is free for publication to all, whether it is a declaration of unwritten law, or an interpretation of a constitution or a statute"] ).

Unless law firm billing for such legal advice must now be divided between hours spent conveying public information (taxable) and non-public information (non-taxable)—adding further anguish to those who toil in private practice—even the provision of public information must be exempt from taxation if the "furnishing of information" is "personal or individual in nature" and is not the kind of information service that involves the distribution of information without "personal or individual" tailoring to clients (like, say, an annual client update on the activities of this Court, for which the provider charges a fee).

III.

Armed with that understanding of what the legislature meant by "personal or individual," I turn to the facts of this case. The service in question is a "Competitive Price Audit" ("CPA") produced by RetailData for Wegmans, a supermarket chain. The CPAs provide Wegmans with real-time pricing information for grocery products (specified by Wegmans) at certain competitor locations (specified by Wegmans), formatted into a report in a format specified by Wegmans. RetailData provided CPAs on demand; Wegmans would decide it needed data either on the prices of a particular item (e.g., a particular brand of canned tuna) being sold by competitors or prices on items generally (e.g., fancy albacore chunk light tuna in water, or simply canned tuna). Wegmans would then transmit a request for a CPA covering those items or categories of items, specifying dates, stores to check, and other parameters to RetailData. RetailData in turn would dispatch individual price checkers armed with smartphones or scanners to the relevant supermarkets to scan all the relevant prices during the specified dates, and then compile those prices into a report for Wegmans and Wegmans only. Although RetailData had multiple clients, if Wegmans and a second client each wanted to gather the same prices on the same items from the same store RetailData would dispatch two price checkers—one for each client—to gather the same data separately, furnishing to each client only the data gathered by the price checker assigned to that client.

The Tax Appeals Tribunal's decision on whether these CPAs were subject to sales tax analyzed these facts using an approach completely untethered from the statutory language, when properly understood. The Tribunal examined the nature of the information (i.e., was the information publicly available, which it viewed as incompatible with "personal or individual") rather than the nature of the information services (i.e., the delivery of a customized report) provided by RetailData: "the question to be answered to determine eligibility for the exclusion is whether the information in the report is uniquely personal ... there is nothing ‘uniquely personal’ about the price of an item in a supermarket [and] such information is obviously not confidential, as it is accessible to anyone who enters a store" ( In the Matter of the Petition of Wegmans Food Markets, Inc., DTA No. 825347, 2016 WL 1109502, 2015 N.Y. Tax Lexis 372 [N.Y. Tax App. Trib. Mar. 10, 2016] ).

Instead of attempting to discern the legislature's intent, the Tribunal relied on several Appellate Division decisions; those decisions contained no meaningful discussion or analysis of the information illuminating the legislature's understanding of "personal or individual," instead making guesses about what those words might have meant. By and large, those decisions misunderstood the statute as evincing an information-based, rather than service-based, exclusion (see, e.g., Hooper Holmes, Inc. v. Wetzler, 152 A.D.2d 871, 872, 544 N.Y.S.2d 233 [3d Dept. 1989] ; Towne–Oller & Assocs. v. State Tax Commn., 120 A.D.2d 873, 502 N.Y.S.2d 544 [3d Dept. 1986] ; Rich Prods. Corp. v. Chu, 132 A.D.2d 175, 521 N.Y.S.2d 865 [3d Dept. 1987] ; Matter of Twin Coast Newspapers v. State Tax Commn., 101 A.D.2d 977, 477 N.Y.S.2d 718 [3d Dept. 1984] ).
--------

The price of a can of tuna is "accessible to anyone who enters a store," but what the Tribunal never decided was whether a service that collected those prices for specific types of tuna (e.g., solid fancy albacore in water, 6 oz. can) of specific brands at specific stores on specific dates – with all specifications provided by a client – represented the kind of "furnishing of information" that was "personal or individual in nature and which is or may not be substantially incorporated in reports furnished to other persons." Likewise, the Tribunal rejected Wegmans' contention that RetailData's process of validating data rendered the service within the exclusion, claiming "the compilation of information ... is insufficient to meet the personal or individual requirement" because that requirement could be met only if the relevant data had been "transformed": a focus on the nature of the data provided, rather than whether the information service was one provided on a customized basis, regardless of the source of the underlying information or contents of the report.

Indeed, whether RetailData created new information or found existing information in the world and transformed it does not bear on the ultimate inquiry of whether the furnishing of information was "personal or individual in nature" or of the kind that would be "substantially incorporated in reports furnished to other persons." If RetailData scanned a basket of prices each week and used that as a basis for a highly sophisticated and proprietary analysis of grocery market trends, but then sent that analysis to a large client list in exchange for a subscription fee, the information service would not be one that was "personal or individual in nature" because the data was susceptible to being, and was in fact, "substantially incorporated in reports furnished to other persons" beyond the "personal or individual" client—even though the data was transformed and incorporated into information generated by RetailData, regardless of whether the underlying data was readily available or transmitted to clients along with the analysis. Conversely, a business that collected raw data from a "common source ... that is not confidential and is widely accessible" (Tribunal Decision, 2016 WL 1109502 at *11 ) but that was nonetheless created and validated only in response to a client's specific request is engaging in the "furnishing of information which is personal or individual in nature," so long as that request does not result in a standardized product that is sold to others.

RetailData's CPAs, as a matter of "pure statutory interpretation and analysis," ( Kurcsics v. Merchants Mut. Ins. Co., 49 N.Y.2d 451, 459, 426 N.Y.S.2d 454, 403 N.E.2d 159 [1980] ) fell into the exclusion for information services that were "personal or individual in nature." Each CPA was tailored to Wegmans' precise requirements; the data generated was preserved solely for Wegmans' use and by its nature was not a standardized product that could be sold to others.

Because the Tribunal's determination was "inconsistent with the governing statute" ( Trump–Equitable Fifth Ave. Co. v. Gliedman, 57 N.Y.2d 588, 597, 457 N.Y.S.2d 466, 443 N.E.2d 940 [1982] ), its determination "requires no deference and must be annulled" ( Paramount Communications, Inc. v. Gibraltar Cas. Co., 90 N.Y.2d 507, 516, 663 N.Y.S.2d 133, 685 N.E.2d 1214 [1997] ), even if, as the majority contends, one puts a thumb on the scale in favor of the government (majority op. at 594, 107 N.Y.S.3d at 773, 131 N.E.3d at 880) when construing an exclusion. However, because the majority's decision places such emphasis on abolishing the exclusions/exemptions distinction, I briefly note my agreement with Judge Stein's opinion on this point (although I differ with her view of the correct outcome on the merits of the case). I add to her analysis only one additional observation, the same point I made at the start: "The primary consideration of courts in interpreting a statute is to ascertain and give effect to the intention of the Legislature" ( Riley, 95 N.Y.2d at 455, 719 N.Y.S.2d 623, 742 N.E.2d 98 ). I doubt our legislature intended to establish a rule, whether for exclusions or exemptions, that taxpayers should lose whenever the language of a tax statute is unclear. That seems particularly unlikely here, where the legislature sought to broaden an exclusion that had been previously interpreted to benefit only narrow classes of professional service providers. Even if I am wrong, and you could show me a legislator who says, "when I write tax laws, I want the courts to construe ambiguities so that ‘the taxpayer always loses’ " (see concurring op. at 596, 107 N.Y.S.3d at 775, 131 N.E.3d at 882), I will show you a legislator who will be, very shortly, legislative history.

The legislature's meaning is not opaque if one uses the conventional tools of statutory interpretation entrusted to us. Employing them, it becomes clear that the legislature was not concerned with the public nature of the information gathered by an information service provider or whether that information was transformed in some manner, but rather whether the report delivered was custom—personal or individual for the client—or generic—sold or potentially sold to others.

Accordingly, I dissent.

Chief Judge DIFIORE and Judges RIVERA and GARCIA concur; Judge STEIN concurs in result in an opinion; Judge FAHEY dissents in an opinion; Judge WILSON dissents in a separate dissenting opinion. Judgment reversed, with costs, determination of respondent Tax Appeals Tribunal of the State of New York confirmed and petition dismissed.


Summaries of

Wegmans Food Markets, Inc. v. Tax Appeals Tribunal of State

Court of Appeals of New York
Jun 27, 2019
2019 N.Y. Slip Op. 5184 (N.Y. 2019)
Case details for

Wegmans Food Markets, Inc. v. Tax Appeals Tribunal of State

Case Details

Full title:In the Matter of Wegmans Food Markets, Inc., Respondent, v. Tax Appeals…

Court:Court of Appeals of New York

Date published: Jun 27, 2019

Citations

2019 N.Y. Slip Op. 5184 (N.Y. 2019)
107 N.Y.S.3d 769
131 N.E.3d 876
2019 N.Y. Slip Op. 5184

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