                    SUPREME COURT OF ARIZONA
                             En Banc

THE ARIZONA DEPARTMENT OF         )   Arizona Supreme Court
REVENUE,                          )   No. CV-07-0288-PR
                                  )
              Plaintiff-Appellee, )   Court of Appeals
                                  )   Division One
                 v.               )   No. 1 CA-TX 06-0006
                                  )
ACTION MARINE, INC., an Arizona   )   Arizona Tax Court
corporation; MELVIN G. RANDALL    )   No. TX2004-000656
and MARTHA RANDALL, husband and   )
wife; M. DANIEL RANDALL and LISA )
RANDALL, husband and wife; JOHN   )
D. RANDALL and BELINDA RANDALL,   )   O P I N I O N
husband and wife,                 )
                                  )
           Defendants-Appellants. )
_________________________________ )

                Appeal from the Arizona Tax Court
        The Honorable Mark W. Armstrong, Judge (Retired)

                      VACATED AND REMANDED
________________________________________________________________

          Opinion of the Court of Appeals, Division One
               215 Ariz. 584, 161 P.3d 1248 (2007)

                             VACATED
________________________________________________________________

TERRY GODDARD, ARIZONA ATTORNEY GENERAL                     Phoenix
     By   Anthony S. Vitagliano, Chief Counsel
          Tax, Bankruptcy & Collections Section
          Paula S. Bickett, Chief Counsel,
          Civil Appeals Section
Attorneys for Arizona Department of Revenue

TROMPETER, SCHIFFMAN, PETROVITS, FRIEDMAN,
& HULSE, L.L.P.                                          Phoenix
     By   Jack B. Schiffman
Attorneys for Action Marine Inc., Melvin G. Randall,
Martha Randall, M. Daniel Randall, Lisa Randall,
John D. Randall, and Belinda Randall
________________________________________________________________
B E R C H, Vice Chief Justice

¶1           We    have    been     asked    to    decide     whether    a     corporate

officer or director may be held personally liable under Arizona

Revised Statutes (“A.R.S.”) section 42-5028 (2006) for failing

to remit to the Arizona Department of Revenue money collected

from the corporation’s customers to pay transaction privilege

taxes.      We     hold    that    §   42-5028     provides     for    such    personal

liability.

                      I.    FACTS AND PROCEDURAL HISTORY

¶2           Melvin, John, and Daniel Randall were shareholders and

directors of Action Marine, Inc., an Arizona corporation that

sold boats and other marine products.                    John and Daniel were also

officers of Action Marine.                 In July 2002, Action Marine filed

for   reorganization        under      Chapter     11    of   the   Bankruptcy    Code.

Five months later, the bankruptcy court converted the case to

one for liquidation under Chapter 7 and ordered Action Marine to

file post-petition transaction privilege tax (“TPT”) returns for

June through November 2002.

¶3           The    returns       showed    that   during      that    period,   Action

Marine’s gross receipts totaled $812,294.00, resulting in a TPT

liability     of     $51,174.52.            In     October     2004,     the     Arizona

Department of Revenue (“ADOR”) filed a complaint in the tax

court seeking to recover unpaid TPTs, penalties, interest, and

costs pursuant to A.R.S. § 42-5028.                     ADOR and the Randalls each
                                           - 2 -
moved    for    summary       judgment.            The    tax       court   granted      ADOR’s

motion, holding the Randalls personally liable for unpaid TPTs,

penalties, interest, and costs.

¶4             The       court     of      appeals       reversed,          reasoning      that

corporate      officers          cannot     be    personally         liable    because     such

officers are not listed as “persons” in A.R.S. § 42-5001(8)

(2006)    and       no    other     statute       imposes       a    duty     to   remit    the

corporation’s TPTs.               Ariz. Dep’t of Revenue v. Action Marine,

Inc., 215 Ariz. 584, 587, ¶ 16, 161 P.3d 1248, 1251 (App. 2007).

¶5             We    granted      ADOR’s       petition    for       review    because     this

case    presents         an   issue       of     statewide      importance,        see     ARCAP

23(c)(3), and ADOR has averred that resolution of this issue may

affect    many       cases,        both        pending    and       planned.        We     have

jurisdiction pursuant to Article 6, Section 5(3) of the Arizona

Constitution and A.R.S. § 12-120.24 (2003).

                                      II.      DISCUSSION

¶6             “The transaction privilege tax . . . is an excise tax

on the privilege or right to engage in an occupation or business

in the State of Arizona.”                      Ariz. Dep’t of Revenue v. Mountain

States Tel. & Tel. Co., 113 Ariz. 467, 468, 556 P.2d 1129, 1130

(1976).     The TPT is not a sales tax, Ariz. State Tax Comm’n v.

Garrett Corp., 79 Ariz. 389, 391, 291 P.2d 208, 209 (1955), but

rather is a tax on the gross receipts of a person or entity

engaged in business activities.                   A.R.S. § 42-5008 (2006).
                                               - 3 -
¶7             The liability for TPT falls on the taxpayer, not on

the taxpayer’s customers.                     A.R.S. § 42-5024 (2006).                          Taxpayers

may pay the TPT themselves or charge customers a separately

itemized      amount         to    cover     TPTs.         See    A.R.S.         §    42-5002(A)(1)

(2006).       If the taxpayer chooses to impose a separate charge, it

must remit all money collected to ADOR, even if it collects more

than the taxpayer owes for TPTs.                         Id.; Garrett, 79 Ariz. at 392-

93, 291 P.2d at 210.

¶8             The      TPT       is   not     technically           a     trust          tax     because

taxpayers are not required to collect TPT from customers or hold

the    money       in    a    trust       account        for   the       state.            See       Joseph

DiGiuseppe,        What       Every     Tax     Practitioner             Needs       to    Know       About

Trust Fund Taxes and Responsible Person Liability in Bankruptcy,

17 Prac. Tax Law. 7, 8 (2002).                             When, however, the taxpayer

elects to separately charge customers a “tax” to cover the TPT,

§     42-5002(A)(1)           operates        to     achieve         a    similar          result       by

requiring that any amounts so charged be fully remitted to the

state.       These collected “taxes” do not belong to and are not for

the    use    of     the      taxpayer.            See    DiGiuseppe,          supra,           at    10-11

(noting      that       trust      fund    taxes         are   not       the   property           of   the

retailer and are not dischargeable in bankruptcy); Marvin A.

Kirsner,       Richard         S.      Miller       &     David      Neier,          Officers’          and

Directors’ Nightmare:                  Being Held Personally Liable for Debtor

Company’s Unpaid Taxes, N.Y.L.J., Aug. 27, 2001, at 7 & n.7
                                                - 4 -
(noting       that   charges     for    taxes     should          be    considered    the

“property of the taxing authority”).

A.     Liability Under A.R.S. § 42-5028

¶9            The question before us is whether corporate officers

or directors may be held personally liable if the corporation-

taxpayer fails to remit to ADOR the additional amount charged to

customers to cover TPT liability.                The resolution of the issue

turns on A.R.S. § 42-5028, which provides as follows:

            A person who fails to remit any additional charge
       made to cover the [TPT] or truthfully account for and
       pay over any such amount is, in addition to other
       penalties provided by law, personally liable for the
       total amount of the additional charge so made and not
       accounted for or paid over.

(Emphases added.)          The parties dispute the meanings of “person”

and “additional charge” as those terms are used in this statute.

¶10           We review the interpretation of statutory provisions

de    novo.     State    ex    rel.    Ariz.    Dep’t       of    Revenue   v.   Capitol

Castings,      Inc.,    207   Ariz.    445,    447,     ¶    9,    88   P.3d   159,   161

(2004).       Our primary goal is to “discern and give effect to

legislative intent.”           Id. (quoting People’s Choice TV Corp. v.

City of Tucson, 202 Ariz. 401, 403, ¶ 7, 46 P.3d 412, 414

(2002)).      “We ‘construe the statute as a whole, and consider its

context,       language,      subject     matter,           historical      background,

effects and consequences, [and] its spirit and purpose.’”                             Id.

(quoting People’s Choice, 202 Ariz. at 403, ¶ 7, 46 P.3d at

                                        - 5 -
414).        We construe related statutes together,                    State ex rel.

Larson v. Farley, 106 Ariz. 119, 122, 471 P.2d 731, 734 (1970),

and     avoid   interpretations            that    render    statutory     provisions

meaningless,        unnecessary,      or    duplicative,       see,    e.g.,   Kriz    v.

Buckeye Petroleum Co., 145 Ariz. 374, 379, 701 P.2d 1182, 1187

(1985).

        1.    Meaning of “Person” in A.R.S. § 42-5028

¶11           The     TPT   statutory      scheme    defines    both    “person”      and

“taxpayer.”         Unless the context otherwise requires, the term

“person” “includes an individual . . . [or] corporation,” A.R.S.

§ 42-5001(8), and “taxpayer” “means any person who is liable for

any tax which is imposed by this article,” id. § 42-5001(18).

ADOR maintains that the legislature intended “person” in § 42-

5028 to include corporate officers or directors as well as the

taxpayer, while the Randalls assert that “person” means only the

taxpayer-entity.

¶12           For several reasons, we agree with ADOR.                   As a textual

matter, although the statutory definition of “person” does not

explicitly       include       corporate          officers   or       directors,      the

definition       is       certainly     broad       enough     to     encompass       the

individuals         who     hold   such      offices.          Moreover,       had    the

legislature meant to limit liability under § 42-5028 to the

taxpayer-entity, as the Randalls and court of appeals maintain,

it likely would not have said “person,” but would have used the
                                           - 6 -
term “taxpayer,” as it did, for example, in A.R.S. § 42-5024, a

related TPT statute.1

¶13          Several aspects of the statutory scheme also suggest

that, by using the term “person” in § 42-5028, the legislature

meant to include persons in addition to the taxpayer.                    Even

before the legislature enacted § 42-5028, other statutes already

made TPT the “personal debt of the taxpayer,” A.R.S. § 42-5024,

and required taxpayers “who impose[d] an added charge to cover

the [TPT]” to remit to ADOR all of “the amount so collected,”

A.R.S. § 42-5002(A)(1).

¶14          For at least twenty-five years before § 42-5028 was

enacted in 1980, these two statutes, §§ 42-5002(A)(1) and 42-

5024, worked in tandem to obligate the taxpayer to pay TPT,

interest,    and    penalties,    and   to   remit   to   ADOR   all   amounts

collected from customers to cover TPT liability.             See 1935 Ariz.

Sess. Laws, ch. 77, § 18(b) (Reg. Sess.) (enacting the current

substantive version of A.R.S. § 42-5024); 1954 Ariz. Sess. Laws,

ch. 136, § 1 (2d Reg. Sess.) (enacting the current substantive

version of A.R.S. § 42-5002(A)(1)); 1980 Ariz. Sess. Laws, ch.

220, § 8 (2d Reg. Sess.) (enacting the current version of A.R.S.

§ 42-5028).        Therefore, reading the word “person” in § 42-5028

to    mean   only    “taxpayer”   would      duplicate    liability    already

1
     The legislative history for A.R.S. § 42-1336, the original
section number for A.R.S. § 42-5028, provides little guidance on
the meaning of the word “person.”
                              - 7 -
imposed on the taxpayer by §§ 42-5002(A)(1) and 42-5024.                         We

generally      construe      statutes    to     avoid   rendering      provisions

duplicative.      See City of Tucson v. Clear Channel Outdoor, Inc.,

209 Ariz. 544, 552, ¶ 31, 105 P.3d 1163, 1171 (2005).                    Because

taxpayers were already liable for TPT, interest, and penalties

before 1980, the legislature must have intended to impose some

different or additional obligation when it enacted § 42-5028.

¶15           The legislature’s enactment of A.R.S. § 43-435 (2006)

in the same bill in which it enacted § 42-5028 also suggests

that   the    legislature     intended      “person”    to   include   others    in

addition to the “taxpayer.”              1980 Ariz. Sess. Laws, ch. 220,

§ 18 (2d Reg. Sess.).         Section 43-435 imposes personal liability

on persons required to withhold income tax who fail to collect

or remit the taxes:

            Any   person  required  to   collect,  truthfully
       account for and pay over any [withholding] tax imposed
       by this title who fails to do so is, in addition to
       other penalties provided by law, personally liable for
       the total amount of the tax not collected or accounted
       for and paid over.

A.R.S. § 43-435.

¶16           Before § 43-435 was enacted in 1980, two sections of

the    1978   income   tax    code   made     the   employer   responsible      for

remitting to ADOR withholding taxes “required to be deducted and

withheld,” see A.R.S. §§ 43-414, -415 (2006), just as §§ 42-5008

and 42-5024 did for TPTs.            The enactment of § 43-435 extended

                                        - 8 -
liability beyond the employer; it made any “person required to

collect, . . . account for and pay over” income taxes to ADOR

personally liable.           The concurrent enactment of §§ 42-5028 and

43-435    indicates      that   the    legislature        similarly    intended    the

word    “person”    in   §    42-5028    to     extend     personal    liability     to

persons other than the taxpayer.2

¶17         Moreover, interpreting “person” to include corporate

officers or directors assuages concerns that such persons might

abuse     the   privilege        of     limited      liability        protection     by

collecting money from customers under the guise of a state-

imposed tax, using such monies for other purposes, forcing the

taxpayer into bankruptcy, and later claiming limited liability

protection.     Cf. Garrett, 79 Ariz. at 392-93, 291 P.2d at 210

(noting     legislature’s        intent       to    preclude         taxpayers     from

profiting by collecting money under the guise of a tax).                             It

also     encourages      those        charged      with     remitting     separately

collected TPT funds to remit them promptly to ADOR.

¶18         Finally, we note that of the states that have a sales,

transaction        privilege,     or      similar         tax,   a     supermajority

statutorily imposes personal liability on corporate officers.3


2
     ADOR has been pursuing withheld taxes from corporate
officers and directors under this interpretation of § 43-435.
3
     E.g., Ark. Code Ann. § 26-18-501 (1997); Cal. Rev. & Tax.
Code § 6829(a) (1998); Colo. Rev. Stat. § 39-21-116.5 (2007);
Conn. Gen. Stat. § 12-414a (2000); Del. Code Ann. tit. 30,
                             - 9 -
While    including      corporate   officers    within   the    definition     of

“person” in § 42-5001(8) would have unmistakably established our

legislature’s intent and forestalled this lawsuit,4 we conclude

that    by   enacting    §   42-5028,   the    legislature     meant   to   bring

Arizona within the national trend of imposing personal liability

on those individuals who fail to remit such taxes.

¶19          Nonetheless,     the   Randalls     argue   and    the    court   of

appeals held that “person” does not include corporate officers

or directors because no statute imposes a duty on them to remit

TPTs.    See Action Marine, 215 Ariz. at 587, ¶ 16, 161 P.3d at

1251.    As support for this position, the court of appeals relied


§ 535(e) (1997); Fla. Stat. § 213.29 (2005); Ga. Code Ann. § 48-
2-52 (1999); Idaho Code Ann. § 63-3627 (2007); 35 Ill. Comp.
Stat. 735/3-7(a) (1996); Ind. Code § 6-2.5-9-3 (2003); Iowa Code
§ 421.26 (2006); Kan. Stat. Ann. § 79-3643 (1997); Ky. Rev.
Stat. Ann. § 139.185 (2006); Me. Rev. Stat. Ann. tit. 36, § 177
(1990); Md. Code Ann., Tax-Gen. § 11-601(d) (2004); 830 Mass.
Code Regs. 62C.31A.1 (2008); Mich. Comp. Laws § 205.27a(5)
(2001); Minn. Stat. § 270C.56 (2007); Miss. Code Ann. § 27-65-55
(2005); Mo. Rev. Stat. § 144.157 (2006); Mont. Code Ann. § 15-
68-811 (2007); Nev. Rev. Stat. § 360.297 (2007); N.J. Stat. Ann.
§§ 54:32B-2(w) & 54:32B-14(a) (2002); N.Y. Tax Law § 1133
(2004); N.D. Cent. Code § 57-39.2-15.2 (2005); Ohio Rev. Code
Ann. § 5739.33 (2007); Okla. Stat. tit. 68, § 1361(A) (2001); 72
Pa. Cons. Stat. §§ 7201(e) & 7237(b) (2000); R.I. Gen. Laws §
44-19-35 (2005); S.D. Codified Laws § 10-45-55 (2004); Vt. Stat.
Ann. tit. 32, § 9703(a) (2001); W. Va. Code § 11-15-17 (2005);
Wis. Stat. § 77.60(9) (2004).
4
     Some states impose liability on officers directly, e.g.,
Ga. Code Ann. § 48-2-52, while others impose liability on “any
officer, member, manager, partner, or other person,” Cal. Rev. &
Tax. Code § 6829(a). In addition, some states impose liability
on persons, but define “person” to expressly include officers.
E.g., Wis. Stat. § 77.60(9).
                             - 10 -
on State v. Angelo, 166 Ariz. 24, 800 P.2d 11 (App. 1990), and

In re Inselman, 334 B.R. 267 (Bankr. D. Ariz. 2005).

¶20         In    Angelo,    the     court      of   appeals       addressed          whether

corporate officers could be held criminally liable for failing

to file a corporation’s TPT returns.                     166 Ariz. at 25, 800 P.2d

at 12.     The court declined to impose criminal liability because

no statute imposed a duty on corporate officers to file such

returns.         Id.   at   27-28,        800   P.2d      at    14-15.          The     court

recognized,      however,    that     “disregarding            [the]    corporate       form

might conceivably be appropriate in the context of civil tax

liability.”        Id.      In     Inselman,       the    bankruptcy      court       denied

ADOR’s claim against a debtor who was the managing member of a

limited liability company that failed to pay its TPTs.                           334 B.R.

at 268, 271.       Relying on the reasoning in Angelo, the bankruptcy

judge    found    no   personal      liability       because      the     TPT    statutory

scheme does not impose a statutory duty on anyone other than the

taxpayer to pay the company’s TPT.                 Id. at 270-71.

¶21         Angelo       decided    whether      criminal        liability       could    be

imposed for failure to file returns, an issue not before us, and

we    decline    to    follow      Inselman.         For       purposes    of     imposing

personal civil liability, the issue is not whether corporate

officers    or     directors       have    a    statutory        duty     to    file     the

corporation’s tax returns or pay the taxpayer’s TPT, but whether

those persons who have assumed a duty to remit monies collected
                                          - 11 -
to cover the taxpayer’s TPT may be civilly liable for failing to

remit them.         The statutes permit corporate officers or directors

to make the business decision to either pay the tax directly

from the taxpayer’s funds or collect it from customers under the

guise of a “tax.”           See Garrett, 79 Ariz. at 392-93, 291 P.2d at

210.        In the latter case, an officer or director who holds,

maintains      control      over,   or    has   responsibility       for    the   money

collected separately as TPT assumes a duty to remit that is not

otherwise statutorily imposed.                  Such persons must accept both

the benefits and burdens of the decision to charge separately

for TPTs.      The benefit of collecting the money from customers as

“tax” (money in hand) must be taken with the burden (exposure to

statutorily imposed personal liability for failing to remit the

money so collected).           A.R.S. §§ 42-5002(A)(1), -5028.                Section

42-5028 applies only after corporate officers or directors elect

to collect a separate TPT charge and then fail to remit the

money collected.         The court of appeals erred in concluding that

the    duty    to   remit    must   be     statutorily     imposed       before   civil

liability can be enforced.

       2.     Meaning of “Additional Charge” in A.R.S. § 42-5028

¶22           Having    concluded        that   “person”   under     §    42-5028   may

include corporate officers or directors, we must determine the

meaning of the phrase “additional charge.”                   The Randalls argue

that “additional charge” in § 42-5028 means only the amount
                                          - 12 -
collected       from     customers      that      exceeds      the    taxpayer’s       TPT

liability for a particular transaction.                  We disagree.

¶23            Section 42-5028 provides that a “person who fails to

remit any additional charge made to cover the [TPT] . . . [is]

personally liable for the total amount of the additional charge

so     made”    and     not     remitted       (emphases      added).           The   term

“additional      charge”        is   defined      by   the    text    of    the   statute

itself.        The statute provides that the “additional charge” is

that charge “made to cover the tax.”                         If “additional charge”

referred only to any amount that exceeds the TPT owed, as the

Randalls maintain, the charge would not be “made to cover the

[TPT]” because the TPT would have already been “covered.”                              See

State Tax Comm’n v. Quebedeaux Chevrolet, 71 Ariz. 280, 288, 226

P.2d 549, 554 (1951) (quoting with approval case recognizing

that “additional charge” refers to the entire amount collected

from customers).

¶24            The     Randalls      counter      that   Arizona       Department       of

Revenue v. Canyoneers, Inc., 200 Ariz. 139, 143, ¶¶ 14-15, 23

P.3d    684,    688     (App.     2001),    has     determined       that   “additional

charge” means only amounts in excess of the effective TPT for a

given    transaction.           Canyoneers,       however,     decided      a   different

issue.     The court in Canyoneers decided whether under A.R.S. §

42-1118(A) (2006) a taxpayer was entitled to a refund of TPT

mistakenly paid to ADOR when the underlying business activity
                                           - 13 -
was not subject to the TPT.       Id. at 140-41, ¶¶ 1-4, 23 P.3d at

685-86.    The court decided only that a taxpayer entitled to a

refund of TPT that was never owed to ADOR was not also entitled

to a refund of any amount that exceeded the effective TPT for

any transaction.      Id. at 143, ¶¶ 14-15, 23 P.3d at 688.          The

court sought to prevent companies from adding an extra profit to

its sales under the guise of a compulsory tax.          Id. ¶ 15 n.3.

Because Canyoneers is not on point, its passing “see” reference

to § 42-5028 provides no guidance.          We conclude that the term

“additional charge” in § 42-5028 means the entire amount charged

to customers to cover the taxpayer’s TPT liability.5

      3.   Response to the Dissent

¶25        Our    dissenting   colleagues   propose   that   §   42-5028

imposes an additional penalty on the taxpayer over and above the

liability for the TPT, interest, and penalties imposed under

§ 42-5024.6      This interpretation assumes that only the taxpayer

“who ‘imposes’ the additional charge” under § 42-5002(A) may be


5
      We also reject the Randalls’ argument that “added charge,”
as that term is used in A.R.S. § 42-5002(A)(1), means something
different from “additional charge,” the term used in § 42-5028.
Both derive from the base verb “add” and both refer to charges
to customers to cover taxes — up to and exceeding the statutory
rate.
6
     No party has advanced this interpretation in this court.
It presents a third potential meaning of A.R.S. § 42-5028.  If
the legislature intended a construction that differs from that
set forth in this opinion, it is of course free to amend the
statute.
                            - 14 -
held responsible to the state.                    Dissent at ¶ 37.             Although this

is a plausible interpretation, we simply disagree that it is the

intended one.

¶26          Section 42-5002(A) requires the “person who imposes an

added charge to cover the tax” to remit the money collected to

ADOR.   That person is likely to be the taxpayer.                           But § 42-5028,

the section at issue, imposes liability on “a person who fails

to remit any additional charge made to cover the tax.”                                   While

such a person may be the taxpayer, it need not always be.                                   It

could an accountant, corporate officer, or other person charged

with remitting the added charge to the taxing authority.                                   See

DiGiuseppe,       supra    ¶    8,     at    10    (defining        responsible      parties

generally    to     be    those      who    exercise      a   degree      of    control    and

influence over the finances and disbursements of a corporation).

¶27          As     our        dissenting         colleagues          acknowledge,         the

majority’s        interpretation            has     the       “practical         virtue     of

encouraging corporate officers and directors to be vigilant in

assuring that additional charges are remitted [to ADOR] and not

spent to discharge other corporate debt.”                       Dissent at ¶ 40; see

also Kirsner et al., supra ¶ 8, at 7 (noting that to protect

officers     and     directors         from       such    personal         liability       for

unremitted        charges,      they       should    “have      the       debtor   pay     the

taxes”); cf. Kelly v. Lethert, 362 F.2d 629, 635 (8th Cir. 1966)

(concluding       that    the     amount     collected        may    be    recovered      only
                                            - 15 -
once, either from the taxpayer as tax or from the responsible

person    as     a    penalty).        We   conclude     that   this   is    what   the

legislature intended.

B.      Remand

¶28            We conclude that “person” under § 42-5028 may include

corporate officers or directors who fail to remit an “additional

charge.”         In    this    case,      the   tax    court    held   the   Randalls

personally liable for Action Marine’s unpaid TPTs, penalties,

interest, and costs, purportedly under the authority of A.R.S.

§ 42-5028.           Because § 42-5028 does not provide for interest,

costs, or penalties (other than the additional charge itself),

it appears that the court erred by conflating the taxpayer’s

liability for TPT (and accompanying penalties and interest that

may be assessed against the taxpayer) and the non-derivative

personal       liability      for   the     “additional    charge”     imposable    on

“persons” under § 42-5028.7                 Because the record does not show

whether     Action      Marine      separately        charged   its    customers    an

additional charge, we remand to determine whether it did, and if

so, which of the Randalls, if any, may be liable under § 42-

5028.


7
     ADOR’s inclusion of Action Marine in its original complaint
and its claim for penalties and interest indicates its intent to
impose derivative liability on the Randalls.         Indeed, the
complaint sought the exact sum from the Randalls that it sought
from Action Marine. The parties also referred to the Randalls’
liability as derivative during arguments before the tax court.
                              - 16 -
¶29           For the remand, we note that a “person” liable under §

42-5028 must have a duty to remit the taxes.                      E.g., Inselman,

334 B.R. at 271 (expressing concern about imposing liability for

taxes too broadly).          Other jurisdictions require the officer,

director,      or   responsible    person       to   have   had    control   over,

responsibility for, or supervision of the money collected to pay

the tax.       E.g., Cal. Rev. & Tax. Code § 6829(a); 35 Ill. Comp.

Stat. 735/3-7(a); Minn. Stat. § 297A.61(2)(c); Mo. Rev. Stat. §

144.157(3); Ohio Rev. Code Ann. § 5739.33; see also N.J. Stat.

Ann. § 54:32B-2(w) (2007) (including any officer who is under a

duty to act); Purcell v. United States, 1 F.3d 932, 937 (9th

Cir. 1993) (finding that a person responsible under 26 U.S.C. §

6672 for collecting and remitting income tax withholding was one

who “‘had the final word as to what bills should or should not

be    paid’    if   such   individual     had    the   authority     required   to

exercise significant control over the corporation’s financial

affairs,      regardless   of   whether    he    exercised    such    control   in

fact”).       Such tests assist in determining whether the person was

responsible for remitting or had assumed a duty to remit monies

collected to pay TPTs.

                            III.   ATTORNEYS’ FEES

¶30           The Randalls requested their attorneys’ fees pursuant

to A.R.S. § 12-348.          Because they have not prevailed, we deny

the request.
                                    - 17 -
                         IV.   CONCLUSION

¶31        For the foregoing reasons, we vacate the opinion of

the court of appeals and the judgment of the tax court.       We

remand this case for further proceedings consistent with this

opinion.



                         _______________________________________
                         Rebecca White Berch, Vice Chief Justice


CONCURRING:


_______________________________________
Ruth V. McGregor, Chief Justice


_______________________________________
Michael D. Ryan, Justice




H U R W I T Z, Justice, dissenting

¶32        The Court today holds that A.R.S. § 42-5028 imposes

personal liability on officers and directors of a corporation

that fails to remit additional charges collected from customers

to cover corporate liability for the transaction privilege tax

(“TPT”).   This is a plausible reading of the statutory scheme

and has much to commend it as a matter of public policy.

                               - 18 -
¶33            This     interpretation,                however,          is    not        inexorably

compelled by the text of the relevant statutes.                                     Indeed, three

judges    of    the     court           of    appeals       and    an    experienced         Arizona

bankruptcy          judge        have        arrived        at    precisely         the     opposite

conclusion.         See Ariz. Dep’t of Revenue v. Action Marine, Inc.,

215 Ariz. 584, 161 P.3d 1248 (App. 2007); In re Inselman, 334

B.R. 267 (Bankr. D. Ariz. 2005).                            The problem, as is so often

the case, arises from a statutory scheme whose language is less

than    pellucid       and        whose       history       is    at    best       unilluminating.

Recognizing that this is a close case, I believe that the court

of appeals has the better reading of the statute.

¶34            The majority correctly describes the basic legislative

scheme, and I need not belabor its details here.                                         There is no

question that the taxpayer, not its customers, is responsible

for paying the TPT under A.R.S. § 42-5014.                               Under § 42-5024, the

tax “and all increases, interest and penalties thereon” become a

“personal       debt        of     the       taxpayer”       and       may    be     collected     by

appropriate legal action under § 42-1114.                                    By enacting § 42-

5024,    the    legislature             seemed    to        recognize        that    a    taxpayer’s

failure to perform his statutory duty of remitting the TPT under

§ 42-5014 did not itself create an actionable liability to the

state.    Otherwise, § 42-5024 would be surplusage.

¶35            In     the        real    world,        of    course,         taxes       imposed   on

businesses are passed on to their customers.                                       Recognizing as
                                                - 19 -
much,   the    legislature   provided    in   § 42-5002(A)(1)   that   “[a]

person who imposes an added charge to cover the tax levied by

this article or which is identified as being imposed to cover

transaction privilege tax shall not remit less than the amount

so collected to [ADOR].”           Section 42-5002(A)(1), to be sure,

refers to a “person who imposes an added charge,” not simply to

a taxpayer.      But when the relevant transaction is one between a

business and its customer, it can only be the business that

imposes the charge, so the word “person” in § 42-5002(A)(1) can

refer only to the putative taxpayer – whether a corporation,

individual, or other entity.8

¶36           Section   42-5028,   the   centerpiece   of   controversy   in

this case, provides that

      A person who fails to remit any additional charge made
      to cover the tax or truthfully account for and pay
      over any such amount is, in addition to other
      penalties provided by law, personally liable for the


8
      Before 1992, the statute now codified at § 42-5002(A)(1)
read:    “In no event shall the person upon whom the tax is
imposed,    when  an  added  charge   is  made   to   cover  the
[TPT] . . . remit less than the amount so collected to [ADOR].”
A.R.S. § 42-1302(A)(1) (1991) (emphasis added).         The 1992
amendment required any “person who imposes an added charge” to
remit the amounts collected.    1992 Ariz. Sess. Laws, ch. 173,
§ 1 (2d Reg. Sess.) The current version of the statute thus has
the salutary effect of requiring remission of the added charge
even if it later turns out there was no TPT liability.       The
putative taxpayer unsure of liability for the tax thus protects
itself against a penalty by remitting the added charge and can
then seek refund of the amounts remitted to ADOR.      See Ariz.
Dep’t of Revenue v. Canyoneers, Inc., 200 Ariz. 139, 23 P.3d 684
(App. 2001).
                             - 20 -
       total amount of the additional charge so made and not
       accounted for or paid over.
The majority concludes that the use of the word “person” in this

statute     means   that     personal       liability         is    imposed    on    any

corporate officer or director who, as a matter of fact, fails to

engage in remission, payment over, or truthful accounting of the

additional charge.         But the Court fails to identify whence the

obligation of such a “person” to pay the additional charge to

ADOR    arises.       Indeed,      the     only    statute         dealing    with   the

obligation to remit the additional charge is § 42-5002(A)(1).

And, as I have noted above, § 42-5002(A)(1) cannot be reasonably

read as imposing the duty to remit additional charges on anyone

other than the person or entity that imposes the charges.

¶37         Section 42-5028 also states that the relevant personal

liability is “in addition to other penalties provided by law.”

(Emphasis    added.)         The   use     of     the    term      “other    penalties”

strongly     suggests      that    § 42-5028        is    a     penalty      provision,

authorizing personal liability on someone who imposes an added

charge but fails to turn it all over.                    This penalty is entirely

separate from the tax liability for the TPT imposed by §§ 42-

5014 and -5024.         Thus, § 42-5028 is not simply surplusage if

read   as   limited     to    imposing      an    additional         penalty    on   the

taxpayer to the extent he has collected additional charges but

not paid them over.          Indeed, if § 42-5024 was needed to impose


                                         - 21 -
personal liability on a taxpayer who failed to perform his duty

under § 42-5014 to remit the TPT, it logically follows that a

statute other than § 42-5002(A)(1) also was needed to impose

personal      liability    on    a   taxpayer    who   failed   to    perform   his

statutory duty to remit added charges.                   That statute is § 42-

5028.    The Court rejects this reading of § 42-5028 because the

term “person” is broadly defined in Title 42 to include all

manner   of    individuals       and   entities,   see    A.R.S.     § 42-5001(8),

while “taxpayer” is limited to a person “who is liable for any

tax,” see id. § 42-5001(18).                But the critical point is that

only a “person” who “imposes” the additional charge is required

to remit it under § 42-5002(A)(1).               Thus, the only “person” who

can fail to remit (or pay over, or truthfully account for) the

additional charge is one who collected it.                  In this case, that

person can only be Action Marine.9

¶38           Indeed,     if    we   read   § 42-5002(A)(1)     differently,     we

create a statutory anomaly.             As the Court notes, the statutory

duty to remit TPT falls solely on the corporate taxpayer, not

its officers and directors.                 Op. ¶ 21.      It is difficult to

understand how, simply by use of the generic word “person,”


9
     It is of course possible for a “person” to impose the
additional charge, yet not be a taxpayer – i.e., one liable for
the tax.   See Canyoneers, 200 Ariz. 139, 23 P.3d 684. Section
42-5028 thus would impose a penalty on such a person, even if
not a taxpayer.

                                        - 22 -
§ 42-5002(A)(1)    creates   a   general   duty   on   the   part   of   such

officers and directors to remit additional charges imposed to

cover the TPT.10

¶39       Nor do I find A.R.S. § 43-435 helpful to ADOR.                 That

statute imposes liability only on those “required to collect,

truthfully account for and pay over” withholding tax.11             Thus, if


10
     As the majority notes, other states impose personal
liability on corporate officers for the corporation’s unpaid
taxes.   Op. ¶ 18 n.3.    As the majority also notes, however,
these states do so on the basis of statutes which, unlike A.R.S.
§ 42-5028, expressly provide for such personal liability.    Op.
¶ 18 n.4.   Any “national trend” is therefore of little utility
in interpreting the relevant Arizona statutes.
11
     Employers who withhold income tax from their employees must
hold the funds in trust for the state.    A.R.S. § 43-415.   The
employee is the taxpayer, and the employer collects the tax on
behalf of the state. See A.R.S. §§ 43-401, 43-431. Section 43-
435 thus deals with the liability of those who improperly handle
trust funds.

     As the majority notes, the TPT is not a trust fund tax
because the customer bears no tax liability but is instead an
excise tax on the entity engaged in business activity.      Op.
¶¶ 6-7.   See Joseph DiGiuseppe, What Every Tax Practitioner
Needs to Know About Trust Fund Taxes & Responsible Person
Liability in Bankruptcy, 17 Prac. Tax Law. 7, 14-15 (2002)
(noting that the critical distinction between a trust fund tax
and an excise tax turns on whether the ultimate tax liability
belongs to the collecting entity or the person from whom the
funds have been taken).   Our previous decisions have attempted
to maintain this distinction. See, e.g., Ariz. State Tax Comm’n
v. Garrett Corp., 79 Ariz. 389, 392-93, 291 P.2d 208, 210
(1955).   Today’s opinion unnecessarily blurs this previously
bright line by characterizing § 42-5028 as involving a trust-
like tax. Op. ¶ 8.

     Another article cited by the majority operates from the
mistaken assumption that the TPT is a trust fund tax. Marvin A.
Kirsner, Richard S. Miller, & David Neier, Officers’ &
                             - 23 -
we were to read § 43-435 in pari materia with § 42-5028, we

would impose personal liability only on those otherwise required

by law to remit, account for or pay over – the “person” who

“imposed” the added charge, in this case, Action Marine.12

¶40          The Court’s reading of § 42-5028 has the practical

virtue of encouraging corporate officers and directors to be

vigilant in assuring that additional charges are remitted and

not spent to discharge other corporate debt.                   Indeed, it is

difficult to excuse the Randalls’ failure to safeguard funds

which   were      taken   from     Action     Marine’s     customers    on    the

representation (either express or implied) that they were needed

to pay the TPT.       But before we in effect pierce the corporate

veil and impose substantial liability on these individuals in

the   name   of   good    public   policy,     I   would   require     that   the

legislature more clearly enunciate its direction that we do so.


Directors’ Nightmare:   Being Held Personally Liable for Debtor
Company’s Unpaid Taxes, N.Y.L.J., Aug. 27, 2001, at 7, 7 & n.7.
The article’s conclusion that directors of the taxpayer are
personally liable for unpaid TPT is therefore flawed.
12
     It is conceivable that the Randalls had a duty to Action
Marine to remit the additional charges. But I am loath to read
a tax penalty statute as enforcing a duty owed to a private
corporation, as opposed to the state. If the legislature meant
to reach such a sweeping result, it could have said so
expressly.    Cf. 26 U.S.C. § 6671(b) (defining “person” to
include corporate officers and employees “under a duty” to
perform a relevant act); 26 U.S.C. § 6672(a) (imposing personal
liability on persons “required to collect, truthfully account
for, and pay over” federal withholding tax).

                                     - 24 -
The   current   statutory   scheme   does   not   so   specify.   I   would

affirm the opinion below, and therefore respectfully dissent.13



                                 __________________________________
                                 Andrew D. Hurwitz, Justice


CONCURRING:


_______________________________________
W. Scott Bales, Justice




13
      I agree with the Court’s conclusion that the “additional
charge” referred to in A.R.S. § 42-5028 is the entire amount
charged to the customer to cover putative TPT liability.   Op.
¶ 24.
                             - 25 -
