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2005  WI  App  31
COURT OF APPEALS OF WISCONSIN
PUBLISHED OPINION
Case No.:                                                      04-0766
Complete Title of Case:
DANIEL J. BENDER AND CAROL J. BENDER,
PETITIONERS-APPELLANTS,
V.
STATE OF WISCONSIN, DEPARTMENT OF REVENUE,
RESPONDENT-RESPONDENT.
Opinion Filed:                                                 January 20, 2005
Submitted on Briefs:     October 14, 2004
Oral Argument:
JUDGES:                                                        Vergeront, Lundsten and Higginbotham, JJ.
Concurred:
Dissented:
Appellant
ATTORNEYS:                                                     On behalf of the petitioners-appellants, the cause was submitted on the
                                                               briefs of Nathaniel J. Krautkramer, Wausau.
Respondent
ATTORNEYS:                                                     On behalf of the respondent-respondent, the cause was submitted on the
brief of Mary E. Burke, asst. attorney general, and Peggy A.
Lautenschlager, attorney general.




2005  WI  App  31
COURT OF APPEALS
NOTICE
DECISION
DATED AND FILED                                                                           This opinion is subject to further editing.   If
published, the official version will appear in
the bound volume of the Official Reports.
January 20, 2005
A party may file with the Supreme Court a
                                                                                          Cornelia G. Clark                                                  petition to review an adverse decision by the
                                                                                          Clerk of Court of Appeals                                          Court of Appeals.   See WIS. STAT. § 808.10
                                                                                                                                                             and RULE 809.62.
                                                                                                                                                             Cir. Ct. No.   03CV000079
Appeal No.                                                                                04-0766
STATE OF WISCONSIN                                                                                                                                           IN COURT OF APPEALS
DANIEL J. BENDER AND CAROL J. BENDER,
PETITIONERS-APPELLANTS,
V.
STATE OF WISCONSIN, DEPARTMENT OF REVENUE,
RESPONDENT-RESPONDENT.
APPEAL  from  an  order  of  the  circuit  court  for  Wood  County:
EDWARD F. ZAPPEN, Judge.   Affirmed.
Before Vergeront, Lundsten and Higginbotham, JJ.
¶1                                                                                        VERGERONT,  J.    This  appeal  concerns  the  construction  and
application  of  WIS.  STAT.  § 78.12(3)1  and  related  sections  that  govern  motor
1  All references to the Wisconsin Statutes are to the 2003-04 version unless otherwise
noted.




No.   04-0766
vehicle fuel taxes.   The Department of Revenue assessed Daniel Bender and Carol
Bender $64,930.11 for unpaid motor vehicle fuel taxes that were incurred by L.L.
Bender  Oil  Corporation,  and  the  Tax  Appeals  Commission  affirmed  DOR’s
decision.   The Benders appeal the circuit court’s order affirming the commission’s
decision.   They contend the commission erred in construing § 78.12(3) to impose
liability on Bender Oil because it was not a licensed supplier and Phillips  66
Company, the licensed supplier, had paid the tax.
¶2                                                                                         We  conclude  the  more  reasonable  construction  of  WIS.  STAT.
§ 78.12(3)  when  read  in  conjunction  with  related  sections  is  as  follows:    a
purchaser of motor vehicle fuel from a licensed supplier is liable to DOR for the
tax when the purchaser does not pay the tax to the supplier as required by WIS.
STAT.  § 78.01(1)  but  does  collect  the  tax  from  the  customers  to  whom  the
purchaser sells the fuel and when DOR gives a credit to the supplier for the tax it
paid  as  authorized  by                                                                   § 78.01(2s).     The  commission  correctly  applied  this
construction of  § 78.12(3) to Bender  Oil.    Accordingly,  we  affirm the circuit
court’s order.
BACKGROUND
¶3                                                                                         The relevant facts are not disputed.2   In July 1998, the period for
which  the  taxes  were  assessed,  David  Bender  was  president,  treasurer,  and
majority stockholder  of  Bender Oil and Carol Bender was the  vice-president.
During that month, Bender Oil received at least fifteen shipments of motor vehicle
fuel from Phillips 66 and sold the fuel to its customers.   Bender Oil did not pay
2  Unless  otherwise noted, these facts are taken  from the  statement  of facts  in the
commission’s decision.
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No.   04-0766
Phillips 66 for the fuel.   On each sale to its customers, Bender Oil collected the
fuel tax, but did not remit any taxes to DOR for sales made in July 1998.
¶4                                                                                                   Bender  Oil  deposited  the  payments  from  its  customers  into  its
business  checking  accounts,  for  which  the  Benders  each  had  check-signing
authority.    In  July                                                                               1998  and  August  1998,  substantial  deposits  far  exceeding
$20,000 were made into each of the three Bender Oil business checking accounts,
and these funds were available to pay creditors and were used to pay creditors.
¶5                                                                                                   Phillips 66 paid the taxes for July 1998 to DOR.3   After Phillips 66
provided DOR with substantiation that it was unable to recover the fuel tax from
Bender Oil, DOR issued a Notice of Entitlement to Tax Credit to Phillips 66 for
the tax Bender Oil failed to pay to Phillips  66.    DOR also issued a personal
liability assessment for the fuel tax against each of the Benders for $64,930.11 as
officers, employees, fiduciaries, or agents who were responsible for paying the
tax, interest, penalties, and other charges incurred but not paid by Bender Oil.   The
Benders both petitioned for redetermination by DOR and, when DOR denied their
petitions, they sought review by the commission.
¶6                                                                                                   Before the commission, the Benders did not dispute the amount of
the tax but did dispute their liability for the tax.   In their view of the statutes, only
a licensed supplier was obligated to pay the tax.   In support of their position they
submitted their affidavits averring that Bender Oil was not a licensee or supplier.
3  The commission did not make an express finding to this effect, but it is implicit in the
fact, recited by the commission, that DOR issued a Notice of Entitlement to Tax Credit to Phillips
66; in addition, DOR stated in answers to the Benders’ interrogatories that it did receive the tax
from Phillips 66.
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No.   04-0766
¶7                                                                                        The commission rejected the Benders’ argument.   It relied on WIS.
STAT. § 78.01(1),4 under which the tax is imposed on each sale at the time of sale.
The commission reasoned that Bender Oil owed the tax because it had not paid the
tax to Phillips 66 but had collected the tax from the customers to whom it sold the
fuel.    The  commission  concluded  that  WIS.  STAT.  § 78.12(3)  applied  in  this
situation  and  made  Bender  Oil  liable  to  DOR  for  the  tax.    Section  78.12(3)
provides:
(3)  REPORTS  OF  OTHERS.  Any  person,  including  a
terminal operator, who is not a licensee and who either uses
any motor vehicle fuel in this state or who has possession
of any motor vehicle fuel (other than that contained in the
ordinary fuel tank attached to a motor vehicle) upon which
the motor vehicle fuel tax has not been paid or the liability
therefor has not been incurred by any licensee in this state
shall file a report and pay the tax on that motor vehicle fuel
and shall be subject to this subchapter in the same manner
as is provided for licensees.
4  WISCONSIN STAT. § 78.01(1) provides:
(1) IMPOSITION OF TAX AND BY WHOM PAID. An excise tax at
the rate determined under ss. 78.015 and 78.017 is imposed on
all motor vehicle fuel received by a supplier for sale in this state,
for sale for export to this state or for export to this state except as
otherwise provided in this chapter. The motor vehicle fuel tax is
to be computed and paid as provided in this chapter. Except as
otherwise provided in this chapter, a person who receives motor
vehicle fuel under s. 78.07 shall collect from the purchaser of the
motor vehicle fuel that is received, and the purchaser shall pay to
the person who receives the motor vehicle fuel under s. 78.07,
the tax imposed by this section on each sale of motor vehicle fuel
at the time of the sale, irrespective of whether the sale is for cash
or on credit. In each subsequent sale or distribution of motor
vehicle fuel on which the tax has been collected as provided in
this subsection, the tax collected shall be added to the selling
price so that the tax is paid ultimately by the user of the motor
vehicle fuel.
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No.   04-0766
The commission also concluded that the undisputed facts established the requisite
elements  for  the  Benders’  personal  liability  for  the  tax  under  WIS.  STAT.
§ 78.70(6).5
¶8                                                                                                     The circuit court affirmed the commission’s decision, concluding
that the commission’s decision was entitled to due weight and that its construction
of WIS. STAT. § 78.12(3) was, in any event, the only reasonable one.
DISCUSSION
¶9                                                                                                     On  appeal,  the  Benders  press  the  argument  rejected  by  the
commission—that Bender Oil owed no tax to DOR because it was not a licensed
supplier.6   Their argument is as follows.   WISCONSIN STAT. § 78.01(1) imposes a
tax on all “motor vehicle fuel received by a supplier for sale in this state,” and all
licensed suppliers are required to pay this tax to DOR.   WIS. STAT. § 78.12(5).
Because Phillips 66, not Bender Oil, was the licensed supplier,7 Phillips 66, not
5  WISCONSIN STAT. § 78.70(6) provides:
(6) PERSONAL LIABILITY. Any officer, employee, fiduciary or
agent who is responsible for paying taxes, interest, penalties or
other charges under this chapter incurred by another person, as
defined in s.  77.51  (10), is personally liable for those taxes,
interest, penalties or other charges. Sections  71.88  (1)(a) and
(2)(a), 71.89 and 71.90, as they apply to appeals of income or
franchise tax assessments, apply to appeals of assessments under
this subsection.
6  The Benders’ challenge on this appeal is limited to the commission’s decision that
Bender Oil owed the tax; they do not assert that, if Bender Oil did owe the tax, they have no
personal liability for the tax.
7  The Benders do not cite to any factual submissions in the record that show Phillips 66
is licensed to receive motor vehicle fuel; their affidavits aver only that it is a supplier of motor
vehicle fuel.   However, DOR does not dispute that Phillips 66 is a licensed supplier, and this is
implicit in the commission’s decision.   We therefore accept this assertion as fact for purposes of
this decision.
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No.   04-0766
Bender Oil, owed the tax to DOR.   Phillips 66 paid that tax.   Section 78.12(3)
applies only when “the … tax has not been paid or the liability therefor has not
been incurred by any licensee in this state,” and that subsection therefore does not
apply in this case.   The Benders acknowledge that Phillips 66 received a credit for
the tax but, they assert, that does not make § 78.12(3) applicable because at the
time Bender Oil possessed the fuel, the tax had been paid by Phillips 66.   Then, by
the time DOR gave Phillips 66 the credit, the Benders had received a discharge in
a Chapter 7 bankruptcy.8
¶10    We review the decision of the commission, not that of the circuit
court.   Kamps v. DOR, 2003 WI App 106, ¶10 n.4, 264 Wis. 2d 794, 663 N.W.2d
306.   Construction of a statute and its application to a given set of facts present a
question of law, which we review de novo.   Id., ¶11.   If the language of a statute is
plain, we apply that language to the facts at hand.   Id.   However, if a statute is
ambiguous, although we are not bound by the agency’s construction, we may in
certain situations defer to an agency’s construction of a statute.  Id.
¶11    We give great weight deference when:                                               (1) the agency was charged
by  the  legislature  with  the  duty  of  administering  the  statute;                   (2)                          …  the
interpretation of the agency is one of long-standing; (3) … the agency employed
its expertise or specialized knowledge in forming the interpretation; and (4) … the
agency’s interpretation will provide uniformity and consistency in the application
of the statute.   Id.   We give a lesser amount of deference—due weight—when the
agency has some experience in the area but has not developed the expertise that
necessarily  places  it  in  a  better  position  than  the  court  to  make  judgments
regarding the interpretation of the statute.   Id.
8  These facts were averred in the Benders’ affidavits filed with the commission.
6




No.   04-0766
¶12    Under the great weight standard, we uphold an agency’s reasonable
interpretation of the statute if it is not contrary to the clear meaning of the statute,
even if we conclude another interpretation is more reasonable.   Id., ¶12.  Under the
due  weight  standard,  we  uphold  the  agency’s  reasonable  interpretation  if  it
comports with the purpose of the statute and we conclude there is not a more
reasonable interpretation.   Id.   We give no deference to the agency, and review the
issue de novo, when the issue before the agency is one of first impression or the
agency’s position has been so inconsistent as to provide no real guidance.  Id.
¶13    We reject the Benders’ assertion that the commission’s decision is
entitled to no deference.   The commission is charged by the legislature with being
the final authority on all questions of law involving taxes.   WIS. STAT. § 73.01(4).
See also Kamps, 264 Wis. 2d 794, ¶14.   In construing the statutes governing motor
vehicle fuel taxes, the commission has employed the experience gained over the
years from discharging that duty.   See Gerald K. Thomas v. DOR, Docket No. 94-
V-222, Wis. Tax Rptr. [CCH] ¶400-147 (Aug. 21, 1995); Jeffrey P. Mach, Sr. v.
DOR, Docket No. 95-V-1295, Wis. Tax Rptr. [CCH] ¶400-317 (Sept. 17, 1997);
Browning-Ferris Industries of Wisconsin, Inc. v. DOR, Docket No. 97-S-282,
Wis. Tax Rptr. [CCH] ¶400-469 (Jan. 13, 2000).   The commission’s decision in
this case is therefore entitled to at least due weight.   We need not decide whether
great weight deference is appropriate because we conclude that the commission’s
construction of WIS. STAT. § 78.12(3) and related statutes is more reasonable than
the construction the Benders propose.
¶14    When we construe  a  statute, we  begin with the language of  the
statute  and  give  it  its  common,  ordinary,  and  accepted  meaning,  except  that
technical or specially defined words are given their technical or special definitions.
State ex rel. Kalal v. Circuit Court for Dane County, 2004 WI 58, ¶45, 271 Wis.
7




No.   04-0766
2d 633, 681 N.W.2d 110.   We interpret statutory language in the context in which
it is used, not in isolation, but as part of a whole, in relation to the language of
surrounding  or  closely  related  statutes,  and  reasonably  to  avoid  absurd  or
unreasonable results.   Id., ¶46.   We also consider the scope, context, and purpose
of the statute insofar as they are ascertainable from the text and structure of the
statute itself.   Id., ¶48.
¶15    The Benders are correct that the tax is imposed on all motor vehicle
fuel received by a licensed supplier for sale in this state.   WIS. STAT. § 78.01(1).
However, it is also true that under § 78.01(1) the licensed supplier is required to
collect this tax from the purchaser of the fuel, in this case, Bender Oil, and Bender
Oil is required to pay that tax to the supplier.   Bender Oil, in turn, is obligated to
collect the tax from the customers to whom it sells the fuel, adding the tax to the
sales price, “so that the tax is ultimately paid by the user of the motor vehicle
fuel.”   Section 78.01.   Thus, although WIS. STAT. § 78.12(5) obligates the licensed
supplier to pay the tax to DOR, the clear intent of the statutory scheme is that the
supplier will receive the amount paid to DOR from the entity that purchased the
fuel from the supplier.
¶16    WISCONSIN  STAT.  § 78.01(2s)  addresses  what  happens  when  the
licensed supplier is unable to collect the tax from the purchaser:
(2s) LIABILITY PRECLUDED. A licensed supplier who is
unable to recover the tax from a purchaser is not liable for
the  tax  and,  with  proper  documentation,  may  credit  the
amount  of  tax  against  a  later  remittance  of  taxes.  A
wholesaler distributor who is unable to recover the tax from
another wholesaler distributor or from a retail dealer is not
liable for the tax and, by supplying proper documentation,
may apply to the department for a refund.
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No.   04-0766
Section                                                                                       78.01(2s)  plainly  expresses  the  legislature’s  intent  that  the  licensed
supplier does not become liable for the tax when the purchaser does not pay the
tax to the supplier as required by § 78.01(1).   Because the licensed supplier under
§ 78.01(2s), with proper documentation, receives a credit for the tax it has paid but
has  been  unable  to  collect,  the  tax,  in  effect,  remains  unpaid  unless  another
provision allows DOR to collect the tax from the purchaser who failed to pay the
tax  to  the  licensed  supplier  as  required  by                                            § 78.01(1).     According  to  the
commission, WIS. STAT.  § 78.12(3) is the provision that fills this gap, because
Bender Oil was in possession of the fuel and the tax remains unpaid.
¶17    The Benders’ argument that WIS. STAT. § 78.12(3) does not apply
depends, at bottom, on the verb tenses.   According to the Benders, because “uses”
and  “possesses” are in the present tense, while  “has not been paid” and  “the
liability therefore has not been incurred” are in the present perfect tense, the taxes
must  be  unpaid  or  the  liability  not  incurred  at  the  time  the  fuel  is  used  or
possessed.   While this is a reasonable way to read this subsection in isolation, we
conclude it is not more reasonable than the commission’s construction when the
subsection is considered in conjunction with WIS. STAT. §§ 78.01(1) and (2s).
¶18    Under  WIS.  STAT.  § 78.01(2s),  a  licensed  supplier  that  initially
incurs liability, in the sense that it is obligated to pay DOR under WIS. STAT.
§ 78.12(5) at a prescribed time, is nonetheless “not liable for the tax” if a certain
later  event  occurs—if  it  cannot  recover  the  tax  from  the  purchaser  who  is
obligated  to  pay it.    The  legislature  would  not  likely have  intended  that  the
licensed supplier’s liability is precluded by this later event under § 78.01(2s), but
that this later event is irrelevant to the licensed supplier’s liability for purposes of
§ 78.12(3):   the legislature would not likely have intended this because it means no
one has to pay the tax to DOR.
9




No.   04-0766
¶19    Another weakness in the Benders’ construction is that it ties the
obligation  to  pay  the  tax  under  WIS.  STAT.                                          § 78.12(3)  to  the  arbitrary  and
unpredictable  relationship  between  the  due  date  for  the  tax  payment  by  the
licensed supplier and the date of sale by purchaser to its customers.    That is,
§ 78.12(5) does not require payment of the tax by the licensed supplier until the
fifteenth of the month following the sale by the supplier to the purchaser.   Thus, it
may  often  happen  that  the  tax  is  not  paid  by the  licensed  supplier  before  a
purchaser such as Bender Oil has sold the fuel to customers.   Bender Oil provides
no rational explanation for why the timing of its sale of the fuel to its customers
should affect its liability for the tax it has failed to pay to Phillips 66 as required
by WIS. STAT. § 78.01(1), and we can discern none.
¶20    In  arguing  that  its  construction  of  WIS.  STAT.  § 78.12(3)  is  the
correct one, the Benders refer to Bender Oil’s particular circumstances, pointing
out that Bender Oil has already sold the fuel to its customers and its assets have
been used to pay its creditors in the Chapter 7 bankruptcy it filed.   However, we
see nothing in § 78.12(3), or any other statute the Benders have brought to our
attention, that would make this a relevant factor in construing § 78.12(3).
¶21    We  conclude  the  more  reasonable  construction  of  WIS.  STAT.
§ 78.12(3), when read in conjunction with WIS. STAT. §§ 78.01(1) and (2s), is as
follows:   a purchaser of motor vehicle fuel from a licensed supplier is liable to
DOR for the tax when the purchaser does not pay the tax to the supplier as
required by § 78.01(1) but does collect the tax from the customers to whom the
purchaser sells the fuel and when DOR gives a credit to the supplier for the tax it
paid as authorized by § 78.01(2s).   We simply cannot agree with Bender Oil that
the legislature intended in this situation that Phillips 66 receive a credit and no one
pay the tax.
10




No.   04-0766
¶22    The Benders rely on the principle that an ambiguity in a tax statute is
construed against the taxing government, citing Marina Fontana v. Fontana-on-
Geneva Lake, 111 Wis. 2d 215, 225 n.8, 330 N.W.2d 211 (1983).   We conclude
that principle is not applicable here.   WISCONSIN STAT. § 78.01(1) unambiguously
requires  Bender  Oil  to  pay  the  tax  to  Phillips  66  and  to  collect  it  from  the
customers.   There is thus no room for argument that Bender Oil is not authorized
to fail to pay the tax to Phillips 66 while keeping the tax it has collected from its
customers.    We agree with DOR that, in effect, the Benders are arguing that
Bender Oil should be excused from its obligation to pay the tax.   This is akin to an
exemption from tax, for which courts generally require express language granting
the exemption.   See Ramrod, Inc. v. DOR, 64 Wis. 2d 499, 504, 219 N.W.2d 604
(1974).   We are satisfied that the commission was not required to construe WIS.
STAT. § 78.12(3) in Bender Oil’s favor, and that its construction, when read in
conjunction with related sections, is the more reasonable.
By the Court.—Order affirmed.
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