Chief Judge DiFiore and Judges Rivera and Garcia concur. Judge Stein concurs in result in an opinion.
Judge Fahey dissents in an opinion. Judge Wilson dissents in a separate dissenting opinion.
OPINION BY JUDGE FEINMAN:Tax Law §1105 (c) (1) imposes a sales tax on certain information services, “but exclud[es] the furnishing of information which is personal or individual in nature and which is not or may not be substantially incorporated in reports furnished to other persons.”In this CPLR article 78 proceeding, we hold that respondent Tax Appeals Tribunal of the State of New York (the Tribunal) rationally determined that the information services receipts at issue were not excluded from the tax.I.Petitioner Wegmans Food Markets, Inc. is a regional supermarket chain that operates throughout New York. Wegmans monitors its competitors’ retail prices as part of its pricing strategy. Since 1995, Wegmans has engaged RetailData, LLC to perform such monitoring through competitive price audits (CPAs). Wegmans selects the products and period covered by a CPA and which of its competitors, and their specific locations, RetailData should surveil. RetailData’s data collectors then travel to the locations specified in Wegmans’s request and collect the information by scanning prices from the store shelves using scanners or smart phones. After collecting the prices, RetailData validates the information, creates reports, and furnishes the reports to Wegmans in its requested format. The CPAs and the resulting reports are kept confidential to prevent Wegmans’s competitors from discovering the products it monitors and its pricing strategies.The New York State Department of Taxation and Finance (the Department) conducted an audit of Wegmans’s sales and use tax liability for the period June 2007 through February 2010. During the audit, the Department concluded that Wegmans’s purchases of CPAs and the corresponding reports from RetailData were taxable receipts under Tax Law §1105 (c) (1). After the Department issued a notice of determination imposing additional sales tax, Wegmans petitioned the Division of Tax Appeals challenging the determination. Wegmans sought a refund of the money it paid to satisfy the tax liability, arguing that “the services rendered by RetailData qualify as an exempt information service which is ‘personal and individual in nature.’”Following an evidentiary hearing, an administrative law judge (ALJ) denied the petition. Upon Wegmans’s exception to the ALJ’s determination, the Tribunal, among other things, affirmed. It concluded that the information services at issue do not qualify for section 1105 (c) (1)’s exclusion because the data in the CPA reports was culled from supermarket store shelves, which are widely-accessible and contain non-confidential data. In addition, although there was some customization of the information, that process did not render the information personal or individual in nature. Given its determination, the Tribunal declined to reach the exclusion’s second requirement, that is, whether the information may be substantially incorporated into reports furnished to RetailData’s other clients. Wegmans commenced this CPLR article 78 proceeding against the Tribunal and respondent Commissioner of Taxation and Finance of the State of New York (the Commissioner) in the Appellate Division pursuant to Tax Law §2016, seeking a judgment annulling the Tribunal’s determination.The Appellate Division granted the petition and annulled the Tribunal’s determination. Initially, the Court stated that “in the event of ambiguity, where, as here, an exclusion rather than an exemption is involved, the statute must be strictly construed in favor of the taxpayer” (155 AD3d 1352, 1354 [3d Dept 2017] [internal quotation marks and citation omitted]). The Court recognized “that Matter of Mobil Oil Corp. v. Finance Adm’r of City of N.Y. (58 NY2d 95, 99 [1983]) indicates that exclusions are to be construed against the taxpayer” (155 AD3d at 1354 n 1). However, the Court disagreed with our statement of law, explaining that “the proposition in [Matter of Mobil Oil Corp.] relies upon precedent that refers to exemptions rather than exclusions” (id.).Turning to application of the statutory exclusion, the Court acknowledged that “the pricing information that RetailData collects on [Wegmans's] behalf is information that is available to the public,” but nonetheless concluded that “such information does not derive from a singular, widely accessible common source or database as that test has previously been applied and commonly understood in determining the applicability of the subject tax exclusion” (id. at 1355). The Court further determined that “the information furnished to [Wegmans] was uniquely tailored to [its] specifications and was related exclusively to implementation of its confidential pricing strategy” (id. at 1356). Accordingly, Wegmans’s “purchase of these information services should have been excluded from taxation” because “the information services that [Wegmans] purchased from RetailData were personal or individual in nature and were not substantially incorporated into reports of others” (id.).1We granted the Commissioner leave to appeal from the Appellate Division judgment, and now reverse.II.In Matter of Mobil Oil Corp., we concluded: “In the case of statutory exclusions, the presumption is in favor of the taxing power” (58 NY2d at 99). We reaffirm this straightforward statement of law in light of the Appellate Division’s refusal to apply it. By doing so, we neither state a new rule under which “the taxpayer always loses” (concur op, at 1) nor overrule Matter of Grace v. New York State Tax Commn., 37 NY2d 193 [1975], rearg denied 37 NY2d 816 [1975]), despite the concurrence’s hyperbolic claims to the contrary. We reiterate our settled rule of construction to ensure consistent application of taxing statutes in the face of our colleagues’ apparent invitation for continued evasion (see concur op, at 10; Wilson, J., dissent op, at 3).In general, “[a] statute which levies a tax is to be construed most strongly against the government and in favor of the citizen” (Matter of Grace, 37 NY2d at 196 [internal quotation marks and citation omitted]; see Matter of Mobil Oil Corp., 58 NY2d at 99). “The principle is, however, applicable only in determining whether property, income, a transaction[,] or event is subject to taxation” (Matter of Grace, 37 NY2d at 196). “[T]he rule is otherwise with respect to the taxpayers’ right to exclude items from taxation” (Matter of Mobil Oil Corp., 58 NY2d at 99). In other words, when the matter at issue “is subject to the taxing statute,” but the question is whether taxation is negated by a statutory exclusion or exemption, “a different rule applies” (Matter of Grace, 37 NY2d at 196). In that instance, “the presumption is in favor of the taxing power” (Matter of Mobil Oil Corp., 58 NY2d at 99; see Matter of Grace, 37 NY2d at 196).In defining the applicable rules for construing tax statutes, we have not differentiated between exemptions, exclusions, and deductions (see Matter of 677 New Loudon Corp. v. State of N.Y. Tax Appeals Trib., 19 NY3d 1058, 1060 [2012], rearg denied 20 NY3d 1024 [2013], cert denied 571 US 952 [2013]; Matter of Charter Dev. Co., L.L.C. v. City of Buffalo, 6 NY3d 578, 582 [2006]).2 Contrary to the Appellate Division’s conclusion (see also Matter of Towne-Oller & Assoc. v. State Tax Commn., 120 AD2d 873, 874 n [3d Dept 1986]) and Wegmans’s argument, our cases in this regard do not turn on syntactical errors conflating these concepts. Rather, we have adopted a functional analysis that affords a singular and workable rule for construing exemptions, exclusions, and deductions, each of which operate to negate the taxpayer’s obligation to pay the otherwise applicable tax.In Matter of Grace, for instance, we concluded that “[t]he same rules apply” to deductions and exemptions because “[a] deduction is functionally a particularized species of exemption from taxation” (37 NY2d at 197). We explained that “[a]n exemption from taxation” and, therefore, a deduction, “must clearly appear, and the party claiming it must be able to point to some provision of law plainly giving the exemption” (id. at 196 [internal quotation marks and citation omitted]). “Indeed, if a statute or regulation authorizing an exemption is found, it will be construed against the taxpayer” (id. [internal quotation marks and citation omitted]). “This is because an exemption is not a matter of right, but is allowed only as a matter of legislative grace” (id.). Still, “the interpretation should not be so narrow and literal as to defeat [the exemption's] settled purpose” (id.).The concurrence concedes, as it must, that Matter of Grace did “not expressly state that ambiguities in statutory exclusions are interpreted in favor of the taxpayer” (concur op, at 5). Matter of Grace did not make this statement because it is not the law. Rather than overrule Matter of Grace, in Matter of Mobil Oil Corp. we extended the functional approach, relying on the analysis previously applied to exemptions and deductions. On the strength of this analysis, we held that, like exemptions, “[t]ax exclusions are never presumed or preferred and before [a] petitioner may have the benefit of them, the burden rests on [the petitioner] to establish that the item comes within the language of the exclusion” (Matter of Mobil Oil Corp., 58 NY2d at 99). Consequently, as with exemptions, “the presumption is in favor of the taxing power” when construing “statutory exclusions” (id.).3 We decline the invitation, endorsed by the concurrence and both dissents, to overrule this clear precedent based on a revisionist analysis that ignores our case law.III.A taxpayer has the burden “to overcome tax assessments” (Matter of Grace, 37 NY2d at 195) and to “establish its entitlement to an exclusion from tax” (Matter of Colt Indus. v. New York City Dept. of Fin., 66 NY2d 466, 471 [1985], rearg denied 67 NY2d 757 [1986]). In the sales tax context, in particular, “it shall be presumed that all receipts for… services of any type mentioned in” Tax Law §1105 (c) “are subject to tax until the contrary is established” (Tax Law §1132 [c] [1]). Moreover, “[i]f there are any facts or reasonable inferences from the facts to sustain it, the court must confirm the [Tribunal's] determination” (Matter of Grace, 37 NY2d at 195).Our application of the principles articulated above begins with the text of Tax Law §1105 (c) (1), which imposes a tax on “[t]he receipts from every sale” of “[t]he furnishing of information by printed, mimeographed or multigraphed matter or by duplicating written or printed matter in any other manner, including the services of collecting, compiling or analyzing information of any kind or nature and furnishing reports thereof to other persons.” The statute “exclud[es] the furnishing of information which is personal or individual in nature and which is not or may not be substantially incorporated in reports furnished to other persons” (Tax Law §1105 [c] [1]).Here, Wegmans concedes that the information services provided by RetailData fall within the general taxing provision of section 1105 (c) (1). The determinative issue before this Court, therefore, is whether the Tribunal rationally determined that those information services were not excluded from the sales tax (see Matter of Colt Indus., 66 NY2d at 471). We conclude that the Tribunal’s determination that Wegmans failed to establish its entitlement to the statutory exclusion, because the information at issue was not personal or individual in nature, was rational and should be confirmed.The information that RetailData compiled and the reports it furnished to Wegmans derived from a non-confidential and widely-accessible source, the supermarket shelves of Wegmans’s competitors. There is nothing about the information itself that is personal or individual in nature. RetailData simply collected the prices of products at grocery stores and compiled that information into reports which it furnished to Wegmans. The Tribunal rationally concluded that the information RetailData furnished to Wegmans was not personal or individual in nature because it was collected from prices on supermarket shelves, which are publicly available, widely-accessible, and not confidential. Moreover, in these circumstances, it was rational for the Tribunal to determine that RetailData’s customization of the publicly-available information it collected from supermarket shelves into a report format did not render the furnished information personal or individual in nature (see Matter of ADP Automotive Claims Servs. v. Tax Appeals Trib., 188 AD2d 245, 248 [3d Dept 1993], lv denied 82 NY2d 655 [1993]; Matter of Rich Prods. Corp. v. Chu, 132 AD2d 175, 177-178 [3d Dept 1987], lv denied 72 NY2d 802 [1988]).4 Accordingly, the Appellate Division judgment should be reversed, with costs, the Tribunal’s determination confirmed, and the petition dismissed.
