Woodmen of the World Life Insurance Society v. Nebraska Department of Revenue

299 Neb. 43 (2018) · Supreme Court of Nebraska · February 16, 2018 · No. No. S-17-319

Summary

The Nebraska Supreme Court affirmed the denial of Woodmen of the World Life Insurance Society’s application for exemption from Nebraska sales and use taxes and its request for a refund of previously paid taxes. The court held that Neb. Rev. Stat. § 44-1095 exempted the funds of a fraternal benefit society, but did not exempt the society’s retail purchase activity from sales and use taxes. The court also rejected Woodmen’s due process and expert-testimony arguments.

Holdings

  1. Section 77-2704.12(1) does not exempt Woodmen from sales and use taxes because fraternal benefit societies are not among the nonprofit organizations enumerated in the statute.
  2. Section 44-1095 exempts taxes imposed on the funds of a fraternal benefit society, but it does not exempt the society from sales and use taxes because those taxes are imposed on retail purchase transactions, not on the society's funds.
  3. Woodmen was not denied due process because it received adequate notice and a meaningful opportunity to be heard concerning the Department's legal theory before the Tax Commissioner hearing.
  4. The hearing officer did not abuse her discretion by excluding expert testimony concerning the proper legal interpretation of § 44-1095.

Questions Presented

  1. Whether § 77-2704.12(1) exempts fraternal benefit societies from Nebraska sales and use taxes.
  2. Whether § 44-1095, which exempts the funds of a fraternal benefit society from specified taxes, creates an entity-based exemption from sales and use taxes or otherwise exempts taxes paid from the society's funds.
  3. Whether Woodmen was denied due process because the Department of Revenue initially gave a different reason for denying its exemption application.
  4. Whether the hearing officer abused her discretion by excluding a tax law professor's proposed expert testimony concerning the interpretation of § 44-1095.
  5. Whether Woodmen was entitled to a refund of sales and use taxes previously paid.

Disposition

affirmed

Cases Cited (25)

  • Bridgeport Ethanol v. Nebraska Dept. of Rev., 284 Neb. 291, 818 N.W.2d 600 (2012)(followed)
  • J.S. v. Grand Island Public Schools, 297 Neb. 347, 899 N.W.2d 893 (2017)(followed)
  • DMK Biodiesel v. McCoy, 290 Neb. 286, 859 N.W.2d 867 (2015)(followed)
  • Coffey v. Planet Group, 287 Neb. 834, 845 N.W.2d 255 (2014)(followed)
  • Stick v. City of Omaha, 289 Neb. 752, 857 N.W.2d 561 (2015)(followed)
  • Holdsworth v. Greenwood Farmers Co-op, 286 Neb. 49, 835 N.W.2d 30 (2013)(followed)
  • In re Interest of Katrina R., 281 Neb. 907, 799 N.W.2d 673 (2011)(followed)
  • Maycock v. Hoody, 281 Neb. 767, 799 N.W.2d 322 (2011)(followed)
  • Lackawanna Leather Co. v. Nebraska Dept. of Rev., 259 Neb. 100, 608 N.W.2d 177 (2000)(followed)
  • Archer Daniels Midland Co. v. State, 290 Neb. 780, 861 N.W.2d 733 (2015)(followed)

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