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Worldwide Equipment of TN, Inc. v. United States

United States Court of Appeals, Sixth Circuit

November 20, 2017

Worldwide Equipment of TN, Inc.; Worldwide Equipment, Inc.; Worldwide Equipment of WV, Inc., Plaintiffs-Appellants,
v.
United States of America, Defendant-Appellee.

          Argued: October 6, 2017

         Appeal from the United States District Court for the Eastern District of Kentucky at Pikeville. Nos. 7:14-cv-00107; 7:14-cv-00108; 7:15-cv-00018; 7:15-cv-00019; Amul R. Thapar, District Judge.

         ARGUED:

          Drew M. Hicks, KEATING MUETHING & KLEKAMP PLL, Cincinnati, Ohio, for Appellants.

          Julie Ciamporcero Avetta, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.

         ON BRIEF:

          Drew M. Hicks, William A. Posey, Bryce J. Yoder, KEATING MUETHING & KLEKAMP PLL, Cincinnati, Ohio, for Appellants.

          Julie Ciamporcero Avetta, Francesca Ugolini, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.

          Before: MERRITT, MOORE, and ROGERS, Circuit Judges

          OPINION

          ROGERS, CIRCUIT JUDGE.

         This case presents the question of what one must do in order to sue for the refund of a tax that someone else paid. Worldwide Equipment, Inc. remitted a 12% federal excise tax collected from purchasers of its heavy duty trucks, and sought a refund from the United States, claiming that the trucks qualified as exempted, "off-highway" vehicles under 26 U.S.C. § 7701(a)(48). The refund statute for such a case, 26 U.S.C. § 6416(a), requires a refund claimant to show that it has made arrangement to avoid double payments by, as relevant to this case, submitting written customer consent forms. Worldwide did not supply such consents to the IRS. The district court, relying on long-standing Supreme Court and Sixth Circuit precedents applying predecessor statutory provisions, United States v. Jefferson Electric Mfg. Co., 291 U.S. 386 (1934) and United States v. Standard Oil Co., 158 F.2d 126 (6th Cir. 1946), dismissed Worldwide's refund claims on nonwaivable sovereign immunity grounds because the consent forms were statutorily required as part of a "duly filed" claim under 26 U.S.C. § 7422(a). Notwithstanding Worldwide's arguments on appeal, dismissal was proper.

         Worldwide Equipment, Inc. is an authorized dealer for Mack Trucks, Inc. Part of Worldwide's business is selling heavy Mack trucks that are designed to be used in Appalachian coalfields. One such truck is the GU713, which Mack began selling in 2008 as part of the "Granite" or "GU" Series. Depending on a customer's needs and the truck's applications, the GU713 is available in several classifications, including normal duty, heavy duty, and severe duty. According to Worldwide, the Severe Duty GU713 ("subject truck") is designed and sold to Worldwide's customers for the specific purpose of off-road, coal-industry use. The subject trucks are uniformly wider than standard GU713 models, with larger and heavier components, and they generally cost between $27, 000 and $32, 000 more than the Normal or Heavy Duty GU713 models.

         Between 2008 and 2014, the IRS taxed Worldwide's sales of the subject trucks under 26 U.S.C. § 4051(a)(1)-(2), which requires a retailer to pay a twelve-percent excise tax on the "first retail sale" of an "[a]utomobile truck chassis" or "bod[y]" weighing more than 33, 000 pounds sold for use as part of a highway vehicle. See id. During those tax periods, Worldwide collected the § 4051(a) excise tax from customers purchasing the subject trucks and remitted the taxes to the Government. Worldwide then filed administrative claims for refund of the taxes collected from its customers, on the grounds that the subject trucks were "off-highway transportation vehicles" excepted from § 4051(a) by 26 U.S.C. § 7701(a)(48).

         As part of a refund claim, the excise tax refund statute, 26 U.S.C. § 6416(a), requires refund claimants to demonstrate that they would not be unjustly enriched by a refund and identifies a number of methods for claimants to make such a showing. Relevant to this case, § 6416(a) allows a refund claimant to show that it has made arrangement to avoid double payments by submitting written customer consent forms with the claimant's administrative ...


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