WPC 8p7Lm~_>LN|_{0x6l*ʮ%5̾!H3T]*O|r[-)/ [R@cH 8*,XB Y%%/jݣ&{RϼN,zQs!`7_ߕ`B0'+%ƬƨJo٥OLRgzvPaqrJmfbS3H*[V 0( UI 4-՘nQ1FBYpi@ G$OK7ߡl,פgIӿx <{F[$!-a0Uw75Jn1DTǧ _GݙT3Xv̹ D1PΏæ[Jib7Z`% 8g ATE k1FƲ a-?gM+b1kݢI\ӟh\b#\ % UN# 0q UN ^ G wS zW  4 0D   D  \Nkm moEb 0 B{{ 0 D3< D-o 0K AS: 0 0D AHP LaserJet 4050 Series PCL 5e,,,,0(hH  Z 6Times New Roman Regular(`$.8dd8    ("  Z6Times New Roman Regular)L  C:\PROGRA~1\COREL\WORDPE~1\TEMPLATE\CUSTOM~1\REVISE~1.WPTC:\Program Files\Corel\WordPerfect Office 2000\Template\Custom WP Templates\revised standard opinion.wpt~(+00(#$  0   Rs $      1  5  _Nowsection67-6-102(31)(A). Rs $      2  5  _ Seesupra note1.Level 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 53|xU- -(|G2s $ !.8K-dd8         0  5 d(|3x$ !.8K-dd8     VVVV'dxd)!dxdx( $ Figure  1  ^_X`YE<<CLevel 1Level 2Level 3Level 4Level 5(|3x$ !.8K-dd8     ($$   1  X[Z&OLE 2.0 Box <=8C HKKKK !.8K-dd8     _  K-8XXdd8  @ ZK-INTHECOURTOFAPPEALSOFTENNESSEE  @kk$ATNASHVILLE#K-Z #Ԉ &   June2000Session L XXK- #K-XX#AMERICANAIRLINES,INC.v.RUTHE.JOHNSON,COMMISSIONER J OFREVENUE,STATEOFTENNESSEEXXK-   ^ @@ AppealfromtheChanceryCourtforDavidsonCounty  ^ @@No.962189IICarolL.McCoy,Chancellor  J @@*AV) ` dE<` A   @@TTNo.M199902390_COA_ԄR3CVFiled_August16,2000_   AV) ` dE<` A      XXXXAmericanAirlines,Inc.,appealsthetrialcourtsfinaljudgmentdenyingitsrequestforarefundof  usetaxespaidonaviationfuelpurchasedoutofstateduringtheyears1992through1995.Weaffirm x thetrialcourtsjudgment. d  #XXXX##K-XX#XXK- Tenn.R.App.P.3AppealasofRight;JudgmentoftheChanceryCourtAffirmed;and < Remanded  (x   #K-X#XX.K-DavidR.Farmer,J.,deliveredtheopinionofthecourt,inwhichW.Frank_Craford_,_P.J._,_W.S._, P andHollyK.Lillard,J.,joined. < CharlesA._Trost_ԀandMichaelG.Stewart,Nashville,Tennessee,fortheappellant,American  Airlines,Inc.  PaulG.Summers,AttorneyGeneralandReporter,andJimmyG._Creecy_,ChiefSpecialCounsel,for  theappellee,RuthE.Johnson,_Commissoner_ԀofRevenue,StateofTennessee. t  S OPINION #K-XX#XXK- L"! #K-XX #  XXK-XXXX&    '8#i   Thematerialfactsinthiscasearenotindispute.AmericanAirlinesisaDelaware $$t# corporationwhichhasitsprincipalplaceofbusinessinTexas.AmericanAirlinesisqualifiedtodo %` $ businessinthestateofTennessee,anditconductsoperationsatalocationintheNashville %L!% InternationalAirport.DuringtheperiodfromJanuary1,1992,toDecember31,1995,American &8"& Airlinespaidover$7millioninusetaxesonaviationfuelthatitusedinitsoperationsatthe '$#' Nashvilleairport.AmericanAirlinespurchasedtheaviationfueloutsidethestateofTennessee, ($( transportedthefuelviapipelineintothestate,placedthefuelinstorageforanaverageoffourteen )$) days,andthenpumpedthefuelintoitsaircraftattheNashvilleairport.Usingthisfuel,American *%* Airlinesaircrafttransportedpassengersandfreighttooutofstatedestinations. +&+   p,',   InJuly1996,AmericanAirlinesfiledacomplaintagainsttheCommissionerofRevenue   seekingarefundoftheusetaxesitpaidonaviationfuelfrom1992to1995.Insupportofitsclaim,  AmericanAirlinescontendedthatthefuelwasexemptfromTennesseesalesandusetaxbasedon  theimportforexportexemptioncontainedinTennesseeCodeAnnotatedsection67-6-313(a) t (1994).Alternatively,AmericanAirlinescontendedthatitshouldhavebeenrequiredtopayause ` taxonlyonthatportionofthefuelactuallyusedbyitsaircraftinflightoverthestateofTennessee. L    Bothpartiessubsequentlyfiledmotionsforsummaryjudgmentontheissueofwhetherthe $ t aviationfuelwassubjecttotheTennesseeusetax.Thetrialcourtruledinfavorofthe  ` Commissioner,holdingthattheaviationfuelwassubjecttotheTennesseeusetaxand,further,that  L  thefuelwasnotexemptfromtaxationundertheimportforexportprovisioncontainedinsection  8  67-6-313(a). $    Onappeal,AmericanAirlinescontendsthatthetrialcourterredinrulingthatallofthe   aviationfuelthatitpurchasedoutsidethestateandloadedintothefueltanksofitsaircraftin   NashvillewassubjecttotheTennesseeusetax.Specifically,AmericanAirlinescontendsthatit   shouldnothavetopayausetaxonthepercentageofthefuelthatwas burnedoffafteritsaircraft p leftthestate.Alternatively,AmericanAirlinescontendsthatthefuel burnedoffoutsidethestate \ wasexemptfromtheusetaxundertheimportforexportprovisionofsection67-6-313(a). H   Webeginouranalysisoftheseissueswiththewellestablishedrulethatcourtsmustconstrue  p taxstatutesliberallyinfavorofthetaxpayerand,conversely,strictlyagainstthetaxingauthority.  \  See  Whitev._Roden_ԀElec.SupplyCo. ,536S.W.2d346,348(Tenn.1976); MemphisSt.Ry.v. H _Crenshaw_ ,55S.W.2d758,759(Tenn.1933).Whereanydoubtexistsastothemeaningofataxing 4 statute,courtsmustresolvethisdoubtinfavorofthetaxpayer. See  MemphisPeabodyCorp.v.   _MacFarland_ ,365S.W.2d40,42(Tenn.1963); accord  CarlClearCoalCorp.v._Huddleston_ ,850   S.W.2d140,147(Tenn.Ct.App.1992).Courtsmaynotextendbyimplicationtherighttocollect  atax beyondtheclearimportofthestatutebywhichitislevied. Boggsv._Crenshaw_ ,7S.W.2d  994,995(Tenn.1928).Bythesametoken,courtsmustgiveeffecttothe plainimportofthe  languageoftheactandmustnotusethestrictconstructionruletothwart thelegislativeintentto l tax. InternationalHarvesterCo.v.Carr ,466S.W.2d207,214(Tenn.1971); seealso  _Bergeda_ԁv. X  State ,167S.W.2d338,340(Tenn.1943)(indicatingthatcourts mustgivefullscopetothe D! legislativeintentandapplyaruleofconstructionthatwillnotdefeattheplainpurposesoftheact). 0"    InenactingtheTennesseeRetailersSalesTaxAct,thelegislatureintended totaxevery $X" retailsaleoftangiblepersonalpropertyandeveryuseofpersonalpropertyinthisstate,unlessthe $D # legislatureexpresslyexceptedthesaleorusefromtaxation. ShoppersGuide_Publg_ԀCo.v.Woods , %0!$ 547S.W.2d561,564(Tenn.1977).Duringthetaxperiodinquestion,theRetailersSalesTaxAct &"% imposedasixpercent(6%)usetaxontangiblepersonalpropertythatwas used,consumed, '#& distributed,orstoredforuseorconsumptioninthisstate.Tenn.CodeAnn.67-6-203(a)(1994). (#' TheActcontainedaseparateprovisiongoverningthetaxationofaviationfuel.Thatprovision )$( imposedafourandonehalfpercent(4%)usetaxon thesale,theuse,theconsumption,the |*%) distributionandthestorageofaviationfuelthat[was]actuallyusedintheoperationofairplaneor h+&* aircraftmotors.Tenn.CodeAnn.67-6-217(1994).TheActbroadlydefined useas the  exerciseofanyrightorpowerovertangiblepersonalpropertyincidenttotheownershipthereof.  Tenn.CodeAnn.67-6-102(30)(A)(1994).   #  1          Citingsection67-6-217,AmericanAirlinescontendsthatthelegislatureintendedtotaxonly ` aviationfuelthatwas actuallyusedintheoperationofaircraftwithinthestateofTennessee. L  AmericanAirlinesequatestheterm actuallyusedwith burnedoff,anditinsiststhatitshould 8  onlyhavebeentaxedforaviationfuelthatwas burnedoffoverTennessee. $ t   Wedeclinetoadoptthisinterpretationofthestatute.ContrarytoAmericanAirlines  L  argument,theRetailersSalesTaxActdidnotlimitthetaxationofaviationfueltothat burnedoff  8  withinthestateofTennessee.Rather,theActtaxedthesale,use,consumption,distribution,or $  storageofaviationfuelwithinthestate. See Tenn.CodeAnn.67-6-217(1994).AlthoughtheAct   requiredthattheaviationfuelbe actuallyusedintheoperationofairplaneoraircraftmotors, id .,   itbroadlydefinedtheterm usetoinclude theexerciseofanyrightorpowerovertangible   personalpropertyincidenttotheownershipthereof.Tenn.CodeAnn.67-6-102(30)(A)(1994). T  #  2      ׀   Webelievethatthisdefinitionoftheterm usewasbroadenoughtocoverAmericanAirlinesacts p ofstoringtheaviationfuelinTennessee,pumpingthefuelintothetanksofitsaircraftatthe \ Nashvilleairport,andthenusingthefuelintheoperationofitsaircraft.Accordingly,wereject H AmericanAirlinescontentionthattheterm actuallyusedshouldbenarrowlydefinedtoinclude 4 onlythefuelthatwas burnedoffinTennessee. See,e.g. , BeechamLab.v.Woods ,569S.W.2d  p 456,457(Tenn.1978)(holdingthatwarehousinganddistributionofpharmaceuticalsamplesclearly  \ fellwithinActsdefinitionof use). H   Onappeal,AmericanAirlinesarguesthatthisinterpretationofthestatuteisinconsistentwith   theremainderoftheRetailersSalesTaxAct,whichpurportstotaxonlypersonalpropertythat is   used,consumed,distributed,orstoredforuseorconsumption inthisstate .Tenn.CodeAnn.  67-6-203(a)(1994)(emphasisadded).Inlightofthelegislaturesbroaddefinitionoftheterm use,  wedonotperceiveanyinconsistencybetweentheresultreachedhereandotherprovisionsofthe  Act.Inaccordancewiththisdefinition,AmericanAirlines usedtheaviationfuelwhenitpumped l thefuelintoitsaircraftforuseintheaircraftsoperation.Wefurthernotethat,inmakingthis X  argument,AmericanAirlinesdoesnotdescribeanyspecificapplicationsoftheusetaxthatwould D! beinconsistentwithourholdingtoday. 0"    AmericanAirlinesfocusesonthephrase actuallyusedintheoperationofairplaneoraircraft $X" motorstosupportitscontentionthatitshouldonlyhavebeentaxedforthatportionofaviationfuel $D # usedtopoweritsaircraftwhilestillinthestateofTennessee.Tenn.CodeAnn.67-6-217(1994). %0!$ Again,wedeclinetoadoptsucharestrictiveinterpretationofthestatute.Werecognizethata &"% portionoftheaviationfuelcontinuedtopowerAmericanAirlinesaircraftafteritleftthestateof '#& Tennessee.Giventhelegislaturesexpansivedefinitionoftheterm use,however,weconclude  thattheaviationfuelwas usedintheoperationofAmericanAirlinesaircraftwhilestillin  Tennesseeandthatsuchusewastaxable.    Inurgingthiscourttoreversethetrialcourtsruling,AmericanAirlinescitesanarticleon ` thesubjectofstatetaxationofjetfuelforthepropositionthat [_t]he_Ԁburnoffrulehasbeenadopted L  bythelegislaturesofseveralstates,including...Tennessee.RobertL.Mandel, HowStatesTax 8  JetFuel ,4St.TaxNotesMag.185,186(1993).Wenote,however,thatthearticlesauthorneither $ t citesanyauthorityforthispropositionnordiscussesthestatutorylanguageuponwhichhebasesthis  ` conclusion.Moreover,wefindnosupportforsuchanapportionmentintheActitselforincaselaw  L  interpretingtheAct.Tothecontrary,oursupremecourthasconsistentlyrejectedtheargumentthat  8  theTennesseeusetaxshouldbeapportionedonthebasisofanaircraftsintrastateusetointerstate $  use,reasoningthattheActmakesnoprovisionforsuchapportionmentandthatthecourthasno   authoritytoapportiononanybasis. See  ServiceMerchandiseCo.v.Jackson ,735S.W.2d443,445   (Tenn.1987); VectorCo.v.Benson ,491S.W.2d612,615(Tenn.1973).     WealsorejectAmericanAirlinesalternativeargumentthatitwasentitledtoanexemption p fortheportionoftheaviationfuelthatwas burnedoffoutsidethestateofTennessee.Inenacting \ theRetailersSalesTaxAct,thelegislatureindicatedthatitdidnotintend tolevyataxupon H articlesoftangiblepersonalpropertyimportedintothisstateorproducedormanufacturedinthis 4 stateforexport.Tenn.CodeAnn.67-6-313(a)(1994).Citingthisprovision,AmericanAirlines  p contendsthattheaviationfuelthatremainedinitsaircraftaftertheaircraftleftthestateofTennessee  \ wasbeingexportedand,thus,wasexemptfromtaxationundertheimportforexportprovision. H   Weconcludethatthisargumentlacksmerit.Althoughtheruleiswellestablishedthattaxing   legislationshouldbeliberallyconstruedinfavorofthetaxpayerandstrictlyconstruedagainstthe   taxingauthority,itisanequallyimportantprincipleofTennesseetaxlawthat exemptionsfrom  taxationareconstruedagainstthetaxpayerwhomustshouldertheheavyandexactingburdenof  provingtheexemption. RogersGroup,Inc.v._Huddleston_ ,900S.W.2d34,36(Tenn.Ct.App.  1995).Theexemption mustbeexpressedinclearlanguagewhichincludesthetaxpayer,andit l  mustnotbebroadenedbeyondthecommandoftheprovision. Sears,Roebuck&Co.v.Woods , X  708S.W.2d374,378(Tenn.1986).Theexemption mustpositivelyappearandwillnotbe D! implied. _LeTourneau_ԀSales&Serv.,Inc.v.Olsen ,691S.W.2d531,534(Tenn.1985). Every 0"  presumptionisagainsttheexemptionandawellfoundeddoubtisfataltotheclaim. _Tibbals_ #l! FlooringCo.v._Huddleston_ ,891S.W.2d196,198(Tenn.1994); UnitedCanners,Inc.v.King ,696 $X" S.W.2d525,527(Tenn.1985). $D #   Applyingtheserulesofconstruction,weconcludethatAmericanAirlineshasfailedto &"% demonstratethatitsuseofaviationfuelwasentitledtotheimportforexportexemptioncontained '#& insection67-6-313(a).Inconstruingthisprovision,oursupremecourthasindicatedthat noone (#' incurstaxliabilitywithrespecttogoodsbyvirtueoftheirtransportationthroughthisStateinthe )$( channelsofinterstatecommerce;however, anystoppageorbringingtorestthesegoodswithinthe |*%) Stateforsaleatretail,use,consumption,distributionorstorageforsubsequentuse,doessubjectsuch h+&* goodstothetaxingpoweroftheState. TexasGasTransmissionCorp.v.Benson ,444S.W.2d  137,139(Tenn.1969).Inthepresentcase,AmericanAirlinesbroughttheaviationfuelintothestate  ofTennessee,storedthefuelinTennessee,andsubsequentlyusedthefuelintheoperationofits  aircraftinTennessee.Underthesefacts,AmericanAirlinescouldnotclaimtheimportforexport t exemptioncontainedintheAct. `   Ourdenialoftheclaimedexemptionissupportedbyoursupremecourtsdecisionin 8   _Serodino_,Inc.v.Woods ,568S.W.2d610(Tenn.1978).Inthatcase,thetaxpayerorderedparts $ t fromoutofstate,broughtthepartsintoTennessee,andinstalledthepartsonbargesthatitwas  ` repairingorrenewing. See _Serodino_ ,568S.W.2dat613.Thereafter,thebargeswereplacedback  L  intointerstatecommerceandusedbytheirrespectiveownersoutsideofTennessee. See  id .Among  8  itsotherclaims,thetaxpayerarguedthatthepartsorderedforrenewalworkwereexemptfrom $  taxationundertheActsimportforexportprovision. See  id .Thesupremecourtrejectedthis   argument,reasoningthat   8  theevidencedoesnotsustainthetaxpayersclaimthatpartsorderedforrenewal   workareimportedintoTennesseeorareproducedandmanufacturedinthisstatefor p export,soastobeexemptunder_T.C.A._Ԁ673007[nowsection67-7-313(a)].Those \ partsarereceivedandinstalledbythetaxpayersemployeesatits&  Tennessee H facilities.4    Id .at61314.'HdO  \   WesimilarlyconcludethattheaviationfuelpurchasedbyAmericanAirlineswasnotentitled 4 totheimportforexportexemption.Justasthebargepartswerereceivedandinstalledbythe   taxpayeratitsTennesseefacility,theaviationfuelwasreceivedbyAmericanAirlinesandpumped   intoitsaircraftattheNashvilleairport.Thefactthatthebargepartsandaviationfuelwere  subsequentlyusedinstatesotherthanTennesseedidnotbringthemwithintheActsimportfor  exportexemption.    Insoholding,wedistinguishthecasescitedbyAmericanAirlinesbecause,inthosecases, X  noportionofthegoodsforwhichtheexemptionwasclaimedwasdistributedorusedinthestateof D! Tennessee. See  BeechamLab.v.Woods ,569S.W.2d456(Tenn.1978)(taxpayerwithdrew 0"  pharmaceuticalsamplesfromitsBristolwarehouseanddistributedsamplesoutsideTennessee); #l!  YoungSalesCorp.v.Benson ,450S.W.2d574(Tenn.1970)(taxpayerwithdrewinsulationfrom $X" itsMemphiswarehouseandshippedmaterialstojobsitesoutsideTennessee).Here,American $D # AirlinesdistributedandbeganusingtheaviationfuelwithinthestateofTennessee. %0!$   WealsodeclinetofollowtheGeorgiasupremecourtsdecisionin _Undercofler_ԁv.Eastern '#& AirLines,Inc. ,147S.E.2d436(Ga.1966).WerecognizethattheGeorgiaexemptioncontained (#' virtuallythesamelanguageastheTennesseeexemption.ContrarytoTennesseesrulesof )$( construction,however,theGeorgiacourtindicatedthatitwasconstruingtheexemptioninfavorof |*%) thetaxpayer. See  _Undercofler_ ,147S.E.2dat441. h+&* Ї  Thetrialcourtsjudgmentisaffirmed,andthiscauseisremandedforfurtherproceedings  consistentwiththisopinion.Costsofthisappealaretaxedtotheappellant,AmericanAirlines,Inc.,  anditssurety,forwhichexecutionmayissueifnecessary.#XXXXJ #     `     h     ___________________________________ 8     `     h     DAVIDR.FARMER,JUDGE