Washington State Dairy Products Commission v. United States

INTRODUCTION

The Internal Revenue Service (“IRS”) assessed the Washington State Dairy Products Commission (“the Dairy Commission”) roughly $700 in telephone excise tax for 1972-74. The Dairy Commission contended that it was exempt from the tax and refused to pay. The IRS collected the tax, interest, and penalties from the Dairy Commission’s bank. After the IRS denied its refund claim, the Dairy Commission sued. The district court held that the Dairy Commission was not exempt from the tax and entered summary judgment for the IRS. The Dairy Commission appeals. We affirm.

FACTS

The Dairy Commission was created to “stabilize the dairy industry by increasing consumption of dairy products within the state and nation.” Wash.Rev.Code § 15.-44.900(1). The state’s licensed dairy producers elect seven of the Dairy Commission’s ten members. The State Director of Agriculture is a non-voting member who appoints two voting members. Wash.Rev. Code §§ 15.44.020. Six members constitute a quorum. Wash.Rev.Code § 15.44.038. The Dairy Commission is financed by assessments on dairy producers, which it may raise, subject to approval by a producer referendum. Wash.Rev.Code § 15.44.080. The producer…