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STATE OF MINNESOTA IN SUPREME COURT A09-717

Tax Court

Magnuson, C.J.

Ronald L. Schober, Relator, vs. Commissioner of Revenue, Respondent. ________________________ Ronald L. Schober, Watertown, Minnesota, pro se. Lori Swanson, Attorney General, Rita Coyle DeMeules, Assistant Attorney General, St. Paul, Minnesota, for respondent. ________________________ SYLLABUS 1. The tax court correctly concluded that the Commissioner of Revenue Filed: February 4, 2010 Office of Appellate Courts

properly assessed relator for sales tax collected but not remitted to the Department of Revenue. 2. The tax court correctly concluded that there was no violation of the

Fourteenth Amendment of the United States Constitution or Article X of the Minnesota Constitution in assessing relator for collected but unremitted sales tax.

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Relator waived his right to challenge in this appeal the Commissioner's use

tax assessment. Affirmed. OPINION MAGNUSON, Chief Justice. Relator Ronald Schober received a Notice of Change in Sales and Use Tax from respondent, the Commissioner of Revenue, in January 2006. The Commissioner assessed Schober for Minnesota sales tax collected in connection with Schober's home repair and remodeling business, Timber Creek Renovation, which he did not remit to the state. The Commissioner also assessed use tax against Schober for failing to register his motor vehicle purchased in Minnesota in June 2000, despite having moved to Minnesota in November of 1999. Schober appealed to the Minnesota Tax Court. The court held a pretrial

conference in part to discuss the relevance of separate criminal proceedings pending against Schober for willful tax evasion and for failure to pay use tax arising out of his failure to register his motor vehicle. In the tax court appeal, Schober withdrew his objection to the use tax assessment at the beginning of the trial and stipulated that he was a Minnesota resident when he bought his vehicle. His apparent motive was to avoid the introduction in the tax case evidence relating to the pending criminal charges. The trial in the tax court was therefore limited to Schober's objections to the sales tax assessment. In some transactions at issue during trial, invoices admitted as exhibits showed separate amounts entitled "sales tax" collected from Timber Creek customers. Schober conceded 2

that he erroneously collected sales tax from his customers in some of the transactions, and that he did not remit the tax to the state. After trial, the tax court issued its decision, which concluded: (1) the Commissioner properly assessed Schober for the sales tax collected from customers, and (2) the Commissioner's sales tax assessment did not violate the Fourteenth Amendment or Article X of the Minnesota Constitution. We affirm. I. Schober first argues that a sales tax paid on building materials installed into real property does not constitute a retail sale, so no sales tax is owed on those transactions. At the same time, Schober asserts that he was statutorily required to include an itemized list of charges in his customer invoices, including sales tax he paid when purchasing the materials. We review the tax court's findings of fact to determine whether sufficient evidence supports those findings. Watlow Winona, Inc. v. Comm'r of Revenue, 495 N.W.2d 427, 431 (Minn. 1993). However, we review the tax court's legal conclusions de novo. F-D Oil Co., Inc. v. Comm'r of Revenue, 560 N.W.2d 701, 704 (Minn. 1997). Minnesota Statutes

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Minnesota Law