ALINE BAE TANNING, INC., A NEBRASKA CORPORATION, ET AL., APPELLANTS AND CROSS-APPELLEES,
NEBRASKA DEPARTMENT OF REVENUE, AN AGENCY OF THE STATE OF NEBRASKA, AND KIMBERLY K. CONROY, TAX COMMISSIONER, APPELLEES AND CROSS-APPELLANTS. JB & ASSOCIATES, INC., DOING BUSINESS AS SUNTAN CITY, A NEBRASKA CORPORATION, APPELLANT,
NEBRASKA DEPARTMENT OF REVENUE, AN AGENCY OF THE STATE OF NEBRASKA, AND KIMBERLY K. CONROY, TAX COMMISSIONER, APPELLEE
Appeals from the District Court for Lancaster County: ANDREW
R. JACOBSEN, Judge.
Grasz and Henry L. Wiedrich, of Husch Blackwell, L.L.P., for
J. Peterson, Attorney General, and L. Jay Bartel for
C.J., WRIGHT, CONNOLLY, MILLER-LERMAN, CASSEL, AND KELCH,
JJ., AND IRWIN, JUDGE. IRWIN, Judge, not participating in the
decision. STACY, J., not participating.
Neb. 624] Heavican, C.J.
indoor tanning salon businesses appeal from the district
court's decision affirming the denial of tax refund
claims by the Tax Commissioner (Commissioner). The salons
assert that the Nebraska Department of Revenue (Department)
improperly collected more than $1.7 million in admissions
taxes from the salons. The Commissioner reasoned that the
salons were not the taxpayers and, therefore, found that the
salons lacked standing to claim refunds. The district court
affirmed the Commissioner's decision. The salons
appealed, and we granted their petition to bypass. The
Department and Commissioner cross-appeal, claiming the
district court lacked subject matter jurisdiction over some
of the claims. We affirm.
2013, Aline Bae Tanning, Inc.; Ashley Lynn's, Inc.; Maple
110 Tanning, L.L.C.; RSB LLC; [293 Neb. 625] Tanning
Horizons, L.L.C.; and Wilson-Bonn, L.L.C. (collectively
Ashley Lynn's) filed a total of 15 claims for tax refunds
with the Department. The Ashley Lynn's salons claimed
refunds of admissions taxes on gross receipts totaling more
than $1 million. In December 2013, JB & Associates, Inc.,
doing business as Suntan City (JB), filed a claim with the
Department for a refund of over $600,000 in admissions tax.
not entirely clear, it appears that in November 2012, the
Attorney General's office had issued an opinion that Neb.
Rev. Stat. § 77-2703(1) (Reissue 2009) did not authorize
subjecting tanning salons to admissions taxes. The Department
has since repealed the regulation listing tanning salons
among the businesses subject to the tax and has ceased
collecting the tax. The Ashley Lynn's and JB salons
(collectively salons) argue that as the Attorney General had
opined, they are not subject to the admissions tax and, as
such, are entitled to a refund of the tax paid.
Commissioner disallowed the Ashley Lynn's salons'
claims on October 7, 2013, and disallowed JB's claims on
December 31. The Commissioner sent all of the salons nearly
identical letters separately denying each claim. The letters
explained that " [a] refund of a tax improperly or
erroneously collected can only be issued by the State
directly to the purchaser who paid the tax." (Emphasis
salons sought judicial review in both cases, naming both the
Department and the Commissioner as defendants. In November
2013, the Ashley Lynn's salons filed one petition for all
15 of the Commissioner's disallowances. Each of the 15
disallowance notice letters were attached to the petition. JB
filed a petition for judicial review in January 2014. The
district court consolidated the two cases and heard arguments
in January 2015.
Neb. 626] Neb. Rev. Stat. § 77-2708(2)(b) (Reissue 2009)
permits " the person who made the overpayment" to
file a claim for a refund of erroneously or illegally
collected taxes. The district court below held that under
§ 77-2708 and our opinions in Governors of
Ak-Sar-Ben v. Department of Rev.
(Ak-Sar-Ben) and Anthony, Inc. v. City of
Omaha, the salons were not the "
person[s]" who made the overpayments and thus lacked
standing to claim refunds.
salons jointly appealed and petitioned for bypass, which this
court granted. The Department and Commissioner
cross-appealed. We affirm because the salons lack standing.
salons assign, restated, that the district court erred by (1)
finding the salons had no standing to claim refunds and (2)
failing to reach the merits and find that the salons were
entitled to refunds.
Department and Commissioner cross-appeal, assigning that the
district court erred in finding it had subject matter
jurisdiction over the claims by the Ashley Lynn's salons.
judgment or final order rendered by a district court in a
judicial review pursuant to the Administrative Procedure Act
(APA) may be reversed, vacated, or modified by an appellate
court for errors appearing on the record. When reviewing an
order of a district court under the APA for errors appearing
on the record, the inquiry is whether the decision conforms
to the law, is supported by competent evidence, and is not
arbitrary, capricious, or unreasonable.
Neb. 627]  On review, an appellate court determines the
meaning of a statute independently of the determination ...