Case Title: State v. Wyoming State Bd. of Equalization

Citation: 

Docket Number: 94-16

State: wyoming

Court: Wyoming Supreme Court

Date: 1995-03-03T00:00:00Z

Document:
State v. Wyoming State Bd. of Equalization1995 WY 25891 P.2d 68Case Number: 94-16Decided: 03/03/1995Supreme Court of Wyoming

STATE 
of Wyoming and the Wyoming Department of Revenue, Appellants (Petitioners),

v.

The WYOMING STATE BOARD OF EQUALIZATION; and Molin 
Concrete Products Company, a Minnesota corporation, Appellees 
(Respondents).

 

Appeal 
from District Court, Weston County, Dan R. Price II, 
J.

Joseph B. Meyer, Atty. Gen., 
Vicci M. Colgan, Sr. Asst. Atty. Gen., and Clinton D. Beaver, Sr. Asst. Atty. 
Gen., Cheyenne, representing 
appellants.

Thomas D. Roberts, Sp. Asst. 
Atty. Gen., Cheyenne, representing 
appellee Wyoming State Bd. of Equalization.

Don Mingo, Vice President, 
Molin Concrete Products Co., Lino Lakes, MN, representing appellee Molin Concrete 
Products Co.

Before GOLDEN, C.J., and THOMAS, MACY, TAYLOR and 
LEHMAN, JJ.

GOLDEN, 
Chief Justice.

[¶1]      The Wyoming 
Department of Revenue (Department) appeals the Wyoming State Board of 
Equalization's (Board) decision to vacate a use tax assessment against Molin 
Concrete Products Company (Molin). We hold our decision in Memorial Hospital of 
Laramie County v. Department of Revenue and Taxation, 805 P.2d 276 (Wyo. 1991) 
requires reversal of the Board's decision to vacate the Department's use tax 
assessment.

Appellant Department states the issue as: Under W.S. 
39-6-601 et seq., is a contractor liable for use tax on the cost of construction 
materials that the contractor both sold to a school district for use in the 
construction of a building and installed in the building under a contract with 
the general contractor for the school district?

Appellee Board states the issue 
as:

Under W.S. 39-6-601 et seq., is a subcontractor 
liable for use tax on materials supplied by the subcontractor to an exempt 
entity, which are subsequently installed by the same subcontractor pursuant to a 
separate agreement with one of the prime contractors who is not an agent of the 
exempt entity?

FACTS

[¶2]      Molin secured a 
materials-only contract with the Weston County School District to supply precast 
plank. Later, Molin subcontracted with a prime contractor hired by the school's 
architect to install the plank. On August 14, 1992, the Department assessed a 
use tax of $1,349.72 against Molin, which Molin paid under protest while it 
appealed the assessment to the Board.

[¶3]      In Sublette 
County School District No. 1 v. State Board of Equalization, 770 P.2d 218 (Wyo. 
1989), this Court held that contractors who both provide and install materials 
under construction contracts with political subdivisions of the State of Wyoming 
were liable for taxes under WYO. STAT. §§ 39-6-601 and 39-6-602 (May 1985 
Repl.). Sublette County School Dist. No. 1, 770 P.2d  at 223. In Memorial 
Hospital of Laramie County, 805 P.2d  at 277, this Court held that a contractor 
who sold materials to a tax-exempt institution and later installed those 
materials under a separate contract with the institution's agent was liable for 
the taxes imposed by the same statutes.

[¶4]      The Board 
determined that the Memorial Hospital of Laramie County decision applied, but 
only imposed use tax liability whenever a contractor supplied and installed 
material under separate contracts either with the exempt institution or with the 
institution's agent. The Board reasoned that because Molin had contracted with a 
prime contractor and not with the exempt institution or its agent, Molin was not 
liable for the use tax.

[¶5]      The Department 
appealed and the district court certified the appeal to this court through 
WYO.R.APP.PROC. 12.09.

STANDARD 
OF REVIEW

[¶6]      Whether use tax 
is properly imposed upon Molin is a question of law. See Memorial Hosp. of 
Laramie County, 805 P.2d  at 280 and Sublette County School Dist. No. 1, 770 P.2d  
at 220. The reviewing court shall decide all relevant questions of law, 
affirming an agency's conclusion if in accordance with the law and setting aside 
that conclusion if not in accordance with the law. WYO. STAT. § 
16-3-114(c)(ii)(A)(1990).

DISCUSSION

[¶7]      This case 
presents the issue of whether there is any possibility that a contractor may 
avoid tax liability under Wyoming's sale and use tax statutes when the 
contractor both provides and installs materials to a tax-exempt institution. The 
issue in this case is answered by our discussion in Memorial Hospital of Laramie 
County where first we observed:

There is nothing in either the statutes or the cases 
interpreting those statutes that provides for a distinction in an instance in 
which the installation contract is not entered into directly or exclusively with 
the purchaser of the materials.

and then 
concluded:

This case and Sublette both involve a situation in 
which a contractor sold materials to a tax-exempt institution and later 
installed the same materials. These are 
the factors that are decisive.

Memorial Hosp. of Laramie 
County, 805 P.2d  at 280 (emphasis added). The Board's limitation of Memorial 
Hospital of Laramie County to installation contracts with an agent is not 
supported by the statutes or the holding in that case. If a contractor as 
defined by WYO. STAT. § 39-6-601(a)(ii)1 or a subcontractor as defined by 
WYO. STAT. § 39-6-6032 sells to a tax-exempt institution 
and later installs those materials, then WYO. STAT. § 39-6-6023 imposes tax 
liability.

[¶8]      
Reversed.

FOOTNOTES

1 WYO. STAT. § 39-6-601(a)(ii)(1990) 
states:

(ii) "General 
or prime contractor" means:

A) Any person 
who agrees with the owner or lessee of real property in this state to perform 
services or furnish materials and services for the construction, alteration, 
improvement or repair of real property in this state; 
or

B) Any person 
who acts in behalf of the owner or lessee of real property in this state to 
arrange for the furnishing of services or the furnishing of materials and 
services for the construction, alteration, improvement or repair of real 
property in this state[.]

2 Any subcontractor who contracts with a 
general or prime contractor is liable for sales and use taxes as a general or 
prime contractor. WYO. STAT. § 39-6-603 (1992).

3 WYO. STAT. § 39-6-602(a) (1992) 
provides:

Any contractor 
who furnishes tangible personal property under contract or in the development of 
real property is the consumer or user of the tangible personal property within 
the meaning of the sales and use tax laws of 
Wyoming.