Pourier v. South Dakota Department of Revenue , 674 N.W.2d 314 ( 2004 )

KONENKAMP, Justice (on reassignment).

[¶ 1.] Muddy Creek Oil and Gas, Inc., operates Big Bat’s Texaco on the Oglala Sioux Reservation. Loren Pourier, an enrolled member of the Oglala Sioux Tribe, is the sole owner of the company. Muddy Creek sought a refund of the South Dakota motor fuel tax it paid. In Pourier v. South Dakota Dep’t of Revenue, 2003 SD 21, 658 N.W.2d 395 (Pourier I), we unanimously ruled that the taxes were illegally collected because the Hayden-Cartwright Act does not contain express congressional authorization to tax Native Americans on Indian reservations. We also decided that Muddy Creek’s consumers, rather than Pourier and his company, bore the legal incidence of the tax, and therefore the consumers were entitled to most of the tax refund. . Only to the extent that Pourier and Muddy Creek used gasoline as consumers would they be permitted to claim refunds. We reversed and remanded for proceedings to allow for payment to reservation Indian consumers who apply for and prove their entitlement to refunds. Lastly, in Pourier I, with two justices dissenting and one writing specially, two members of this Court also ruled that any “limitation periods imposed by the motor fuel taxation scheme are inapplicable in this case.”

[¶ 2.] After our opinion was handed down, both Pourier and the State petitioned for rehearing, urging us to reconsider certain portions of Pourier I. We granted the State’s petition, solely on the question of the proper limitations period for refund applications. We now hold that the limitations period applicable in this case is fifteen months under SDCL 10-47B-141 and that claims for times predating December 17, 1997 are untimely. Accordingly, we vacate Issue 4 of Pourier I, 2003 SD 21, ¶¶ 35-38, 658 N.W.2d at 406-07, and replace it with the following discussion on the proper limitations period. In all other respects, the decision in Pourier I will stand.

Statute of Limitations

[¶ 3.] In November 1995, Muddy Creek received motor fuel and special fuel licenses from the South Dakota Department of Revenue. In the following years, it filed a succession of refund claims and objections to collection of motor fuel taxes. All claims were denied. In the administrative appeal, the hearing examiner found that no claims were timely for periods before December 17, 1997. All the earlier claims were untimely either because Muddy Creek did not appeal the final decisions of the Department of Revenue denying them or because the claims were filed late. Muddy Creek does not dispute the hearing examiner’s findings on the factual timeliness. of the refund claims. Instead, it contends that no statute of limitations applies or that a longer statutory limitations period applies.

[¶ 4.] In agreeing with Muddy Creek’s argument, Pourier I did not analyze any specific statute of limitations, since two members of the Court ruled that the “justifications [for limitations periods] are simply not present in this case.” 2003 SD 21, ¶ 38, 658 N.W.2d at 407. They reasoned that “[b]ecause the State exceeded its authority in imposing this tax, the limitation periods imposed by the motor fuel taxation scheme are inapplicable in this case.” Id. ¶ 37. On further reconsideration, however, we now conclude that the fifteen-month limitations period applies here. SDCL 10-47B-141 provides:

Any claim for refund of motor fuel or special fuel tax shall be received by the department within fifteen months of the date the fuel was originally purchased in order to be accepted for refund. Fuel purchased more than fifteen months from the date the claim is received is forever barred from refund eligibility.

Muddy Creek cites other possible statutes, such as SDCL 15-2-13 (six years for common law actions) and SDCL 10-59-19 (three years for overpaid taxes), but those do not specifically deal with the time limit for obtaining refunds on motor fuel taxes.¹ In cases where more than one statute arguably touches upon the same subject matter, we presume that the statute with the more specific language “relating to a particular subject will prevail over the general terms of another statute.” Martinmaas v. Engelmann, 2000 SD 85, ¶ 49, 612 N.W.2d 600, 611 (quoting Moss v. Guttormson, 1996 SD 76, ¶10, 551 N.W.2d 14, 17).

[¶ 5.] Muddy Creek cites tax deed cases like Hough v. Perkins County, 72 S.D. 236, 32 N.W.2d 632, 633 (1948) to argue that South Dakota’s fifteen month limitations period for seeking a refund on motor fuel tax is “inoperative” and inapplicable. These tax deed cases have nothing to do with tax refunds. They stand only for the proposition that certain defects in a tax deed are jurisdictional against which a statute of limitations is necessarily inoperative. See also Cornelius (Lynch, Intervener) v. Ferguson, 23 S.D. 187, 121 N.W. 91, 93 (1909). These decisions follow a long line of South Dakota cases standing for the rule that persons cannot be deprived of their real property through the sale of a tax deed if the defects in the process of obtaining the deed are so serious as to deprive owners of their property without due process of law. Here, with respect to refunds on motor fuel tax, Indian taxpayers will not be deprived of due process. They will have a right to seek a refund within a reasonable time.

[¶ 6.] Nor will the case of Pederson v. Stanley County, 34 S.D. 560, 149 N.W. 422 (1914) avail Muddy Creek. In Pederson, this Court held that the common law rule that taxes voluntarily paid cannot be recovered has no application to an instance where the tax was illegally imposed by an outside jurisdiction. Aside from the fact that no statute of limitations was at issue in Pederson, we now have a specific statute governing the recovery of improperly collected motor fuel taxes. See SDCL 10-47B-141. The Legislature is at liberty to override common law rules by statutory enactment. SDCL 1-1-24.

[¶ 7.] As for the constitutionality of our fifteen-month statute, the United States Supreme Court has definitively authorized reasonable procedural limitations, including “relatively short statutes of limitation” applicable to tax refund claims. McKesson Corp. v. Div. of Alcoholic Beverages and Tobacco, Dep’t of Bus. Regulation of Florida, 496 U.S. 18, 45, 110 S.Ct. 2238, 2254, 110 L.Ed.2d 17, 41 (1990). The Supreme Court acknowledged this vital issue in dealing with tax refunds, endorsing a State’s “exceedingly strong interest in financial stability.” Id. at 37, 110 S.Ct. 2238. With sixty-six percent of South Dakota’s highway funding coming from motor fuel taxes, a short time to obtain refunds is imperative to maintain fiscal soundness. So long as they provide a “clear and certain remedy,” indeed, “the States are afforded great flexibility in satisfying the requirements of due process in the field of taxation.” Nat’l Private Truck Council, Inc. v. Oklahoma Tax Comm’n, 515 U.S. 582, 587, 115 S.Ct. 2351, 2354, 132 L.Ed.2d 509, 516 (1995) (citations omitted). During all times at issue here, South Dakota provided a remedy for obtaining a motor fuel tax refund to those who complied with the procedural requirements in the statutes. Muddy Creek did not comply with those requirements and thus it cannot revive its untimely claims; they are foreclosed and “forever barred from refund eligibility.” SDCL 10-47B-141.

[¶ 8.] Because we have declared unconstitutional the State’s collection of motor fuel tax from Muddy Creek, consumers who timely seek and prove their entitlement to a refund may recover the taxes they paid. SDCL 10-47B-131.2. We remand this matter for a hearing where Pourier and Muddy Creek can prove the amount of motor fuel tax they paid as consumers for their personal use. The brunt of these taxes were paid by Muddy Creek’s consumers because the hearing examiner found that “Muddy Creek’s price at the pump includes South Dakota’s $.22 per gallon fuel tax.” Since Muddy Creek’s customers bore the legal and economic incidence of this tax, a fact the State concedes, any person who was enrolled member of the Oglala Sioux Tribe and who paid the invalidly collected motor fuel tax may timely seek a refund for the taxes paid as part of their purchases made during the same period applicable to Muddy Creek’s timely claims. SDCL 10-47B-131.2 provides in relevant part that consumers “of motor fuel [...] may apply for and obtain a refund of fuel taxes imposed and paid to this state, if a state or federal court of final appeals finds that taxation of the purchase or use the fuel is preempted by federal law or unconstitutional.” Thus, to the extent that Muddy Creek’s claims were timely, then these tribal members, being the actual aggrieved consumers, may be deemed to have their claims considered timely.

[¶ 9.] Reversed and remanded as modified.

[¶ 10.] AMUNDSON, Retired Justice and RUSCH, Circuit Judge, concur. [¶ 11.] GILBERTSON, Chief Justice, concurs with writing. [¶ 12.] SABERS, Justice, dissents. [¶ 13.] RUSCH, Circuit Judge, sitting for ZINTER, Justice, disqualified. [¶ 14.] MEIERHENRY, Justice, not having a been a member of the Court at the time this action was submitted to the Court, did not participate.

1 . The dissent contends that newly enacted Senate Bill 225 is retroactive and imposes a six-year statute of limitations in this case. SDCL 2-14-21 provides that “No part of the code of laws enacted by § 2-16-13 shall be construed as retroactive unless such intention plainly appears.” Nothing in this bill indicates, much less plainly indicates, that it is intended to be retroactive.