Case Title: Allied-Signal, Inc. v. Wyoming State Bd. of Equalization

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1991-06-12T00:00:00Z

Document:
Allied-Signal, Inc. v. Wyoming State Bd. of Equalization1991 WY 90813 P.2d 214Case Number: 90-97Decided: 06/12/1991Supreme Court of Wyoming
ALLIED-SIGNAL, INC., A 
DELAWARE CORPORATION, APPELLANT (PETITIONER),

v.

THE WYOMING STATE BOARD OF 
EQUALIZATION, APPELLEE (RESPONDENT).

Gregory C. Dyekman, Dray, 
Madison & Thomson, P.C., Cheyenne, for appellant.

Joseph B. Meyer, Atty. 
Gen., and Michael L. Hubbard, Sr. Asst. Atty. Gen., for 
appellee.

Before URBIGKIT, C.J., 
and THOMAS, CARDINE, MACY and GOLDEN, JJ.

THOMAS, Justice.

[¶1.]     The essential question 
to be resolved in this case is the value to be ascribed to stock in a new 
corporation that is exchanged for the assets of sister corporations for purposes 
of the state sales tax. In a time period spanning part of 1985 and part of 1986, 
a corporate reorganization was structured in which the assets held by wholly 
owned subsidiary corporations were exchanged for 100 percent of the stock in a 
newly formed subsidiary corporation with no assets. In addition, the acquiring 
corporation assumed certain liabilities. The Wyoming State Board of Equalization 
ruled that this transaction was a transfer for consideration and subject to the 
imposition of the sales tax under the laws of Wyoming in effect at that time. The district 
court upheld the ruling by the State Board of Equalization which assessed the 
sales tax at $2,838,767. We acquiesce in the determination that, under the law 
in effect at that time, this was a transfer for consideration resulting in a 
sales tax. We hold, however, that the only consideration paid for the assets was 
the stock of the acquiring corporation and that, while certainly that stock was 
worth at least the expenses of capitalization, the record is silent as to that 
amount. Therefore, there is no proof of the value of the consideration paid for 
the assets. The net effect is that the stock that was transferred has no value 
according to this record, and there is no basis upon which to impose a 
Wyoming sales 
tax on this transaction. The judgment of the district court is 
reversed.

[¶2.]     Allied-Signal, Inc. 
(Allied-Signal), presents the following issues for review:

"A. Whether the District 
court erred in sustaining the finding of the State Board of Equalization that 
the subject transaction constituted a `Sale' within the meaning of Wyo. Stat. § 
39-6-402(a)(iii).

"1. Whether the 
legislature did not intend to subject such transfers to tax.

"2. Whether the District 
Court erred in concluding that Appellant did not carry its burden of proving a 
long-standing policy of the department.

"3. Whether the District 
Court erred in concluding that the statute is not ambiguous.

"4. Whether the ambiguity 
in the meaning of the term `consideration' as it applies to an incorporation 
transfer should be resolved by this court finding that the stock received upon 
an incorporation transfer is not consideration for purposes of the 
Act.

"B. Whether the 
imposition of tax on Allied's transfer was in violation of the Wyoming 
Administration Procedure Act and the due process provisions of the Wyoming and Federal 
Constitutions.

"C. Whether, even if the 
subject transaction constituted a `sale,' the State Board of Equalization acted 
arbitrarily, capriciously and contrary to law in finding that the intrinsic 
value of the stock received by Allied, and therefore the amount subject to tax, 
was greater than zero and the District Court erred in sustaining that 
finding."

The Wyoming State Board 
of Equalization (Board), as appellee, sees the issues in this way:

"Has the appellant 
carried its burden of proving that the board's decision is contrary to the 
standards established for this review under W.S. 16-3-114(c)?

"(1) Is W.S. 
39-6-402(a)(iii)(1986) ambiguous?

"(2) Does the rule of 
construction cited by appellant apply? If so, does it change the result of this 
case?

"(3) Is the decision 
supported by substantial evidence?"

[¶3.]     In September of 1985, 
Allied-Signal acquired Allied Corporation (Allied), which was a public 
corporation involved in the chemical, automotive, and aerospace industries. 
Allied became a wholly-owned subsidiary of Allied-Signal. One of the major 
assets of Allied was a soda ash mining and manufacturing facility located near 
Green River. In December of 1985, Allied-Signal 
caused One Newco to be incorporated under the laws of the state of Delaware. The officers 
and directors of this new company were composed of either officers or employees 
of Allied or one of its affiliates.

[¶4.]     One Newco became an 
active entity on May 21, 1986 when Allied transferred its Wyoming soda ash 
business plus the assets of various other chemical companies to One Newco in 
exchange for the entire first issue of One Newco stock. In addition, One Newco 
assumed certain liabilities incurred earlier by Allied in connection with the 
assets that were transferred. Prior to that time, One Newco had acquired no 
assets whatsoever and, as a result of the transaction, it became a wholly-owned 
subsidiary of Allied. Through this arrangement, Allied continued to maintain 
control and ownership of the assets and businesses transferred to One Newco. 
Allied Signal was the corporate owner of Allied, and it possessed ultimate 
control and ownership over the entire business structure that included One 
Newco. Allied Signal's asset pool was not affected by the exchange of property 
for stock other than to the extent of some ostensible increase in net worth 
reflected by a return of the intrinsic value contained in the incorporation of 
One Newco. One Newco changed its name to General Chemical Corporation following 
the transaction.

[¶5.]     As a part of the 
transfer of assets for stock, Allied assumed liability for all taxes associated 
with the formation of One Newco. Allied reported the transfer on its May, 1986 
sales tax return and remitted sales tax in the amount of $2,858,593. The 
following January, it filed an amended return and requested a refund of 
$2,838,767 from the Wyoming Department of Revenue and Taxation (Department) on 
the ground that the exchange of assets of Allied for One Newco stock did not 
constitute a taxable event. The request for refund was denied and, on appeal, 
the Board ruled that the transfer did constitute a "sale" and that the stock 
received by Allied amounted to consideration, thus upholding the Department's 
denial. In order to establish the amount of taxes due, the stock was found to be 
worth the value of the assets received.

[¶6.]     Subsequently, Allied 
and Allied-Signal merged and Allied-Signal became the successor in interest to 
all claims previously initiated by Allied. In August of 1989, Allied-Signal 
petitioned the district court to review the order of the Board. The district 
court affirmed the agency's determination.

[¶7.]     At the time of the 
transaction upon which the tax was imposed, the controlling Wyoming law, found in § 
39-6-402(a)(iii), (iv), and (v), W.S. 1977, (May 1985 Repl.), reads as 
follows:

"(a) As used in this 
article:

* * * * * *

"(iii) `Sale' means any transfer 
of title or possession for a consideration and includes the fabrication of 
tangible personal property when the materials are furnished by the 
purchaser;

"(iv) `Sales price' means 
the consideration paid by the purchaser of tangible personal property excluding 
the actual trade-in value allowed on tangible personal property exchanged at the 
time of transaction, admissions or services which are subject to taxation as 
provided by this article and excluding any taxes imposed by the federal 
government or this article;

"(v) `Tangible personal 
property' means any property not real or intangible * * *."

[¶8.]     It is to be noted that 
the statute defines a sale as any transfer of title or possession for a 
consideration and then describes the sales price as a consideration paid by the 
purchaser. These provisions were promulgated initially with the Selective Sales 
Tax Act of 1937, Ch. 102, 1937 Wyo. Sess. Laws, but the provision was not 
enforced to impose a tax upon the contribution of assets to a wholly-owned 
subsidiary in exchange for the stock of the subsidiary until 1982. In that year, 
the Wyoming Telephone Company contested case culminated in an affirmation by the 
Board of an assessment made on exactly such an exchange. The case involved a 
factual situation quite similar to that involved in this case, but the disputed 
tax was $584.23. The Board's ruling was not appealed. See The Wyoming Lawyer, Vol. VI, 
No. 2, (June 1983) (reviews the Administrative decision).

[¶9.]     The testimony of the 
director of the Internal Operations Division of the Department of Revenue and 
Taxation in this case is to the effect that the Department, at least prior to 
the 1982 case, had believed that a transfer upon an incorporation such as that 
occurring in this instance would not be the subject of a sales tax assessment. 
In 1985, however, the Department, apparently upon its conclusion that its prior 
interpretation of the statutes had been either erroneous or lax, adopted Chapter 
III, Section 5 of the Rules and Regulations of the Wyoming State Tax Commission, 
in which a transfer of tangible personal property pursuant to the sale of a 
business was declared to be subject to the sales tax.

[¶10.]  At the next general session of the 
legislature following promulgation of the new regulation by the Department, the 
legislature, apparently reacting to the Department's changed posture, expanded 
the language of the applicable statutes to establish express exceptions for 
certain types of transactions. Section 39-6-402(a)(iii), (iv), and (v), W.S. 
1977 (July 1990 Repl.), in pertinent part, now read as follows:

"(a) As used in this 
article; * * *

* * * * * *

"(iii) `Sale' means any 
transfer of title or possession for a consideration including the fabrication of 
tangible personal property when the materials are furnished by the purchaser but 
excluding an exchange or transfer of tangible personal property upon which the 
seller has directly or indirectly paid sales or use tax incidental 
to:

* * * * * *

"(B) The formation of a 
corporation by the owners of a business and the transfer of their business 
assets to the corporation in exchange for all the corporation's outstanding 
stock, except qualifying shares, in proportion to assets 
contributed;

* * * * * *

"(E) The transfer of 
assets from a parent corporation to a subsidiary corporation which is owned at 
least eighty percent (80%) by the parent corporation, which transfer is solely 
in exchange for stock or securities of the subsidiary corporation;

"(F) The transfer of 
assets from a subsidiary corporation which is owned at least eighty percent 
(80%) by the parent corporation to a parent corporation or to another subsidiary 
which is owned at least eighty percent (80%) by the parent corporation, which 
transfer is solely in exchange for stock or securities of the parent corporation 
or subsidiary which received the assets;

* * * * * *

"(K) The transfer of 
assets between parent and closely held subsidiary corporations, or between 
subsidiary corporations closely held by the same parent corporation, or between 
affiliated companies, partnerships and corporations which are owned in similar 
percentages by the same persons. `Closely held subsidiary corporation' means a 
corporation in which the parent corporation owns stock possessing at least 
eighty percent (80%) of the total combined voting power of all classes of stock 
entitled to vote and owns at least eighty percent (80%) of the total number of 
shares of all other classes of stock;

* * * * * *

"(M) The sale of a 
business when sold to a purchaser of all or substantially all of the assets of 
the business when the purchaser continues to use the tangible personal property 
in the operation of an ongoing business.

"(iv) `Sales price' means 
the consideration paid by the purchaser of tangible personal property excluding 
the actual trade-in value allowed on tangible personal property exchanged at the 
time of the transaction, admissions or services which are subject to taxation as 
provided by this article and excluding any taxes imposed by the federal 
government or this article;

"(v) `Tangible personal 
property' means any property not real or intangible; * * *."

Pursuant to these 
provisions, an exchange of assets like that involved in this case would not be 
taxable. The new language in the statutes precludes such a result.

[¶11.]  In support of its position that the 
transaction was not taxable, Allied-Signal argues that the district court erred 
in sustaining the ruling of the Board because the exchange of assets that 
occurred in the transaction sought to be taxed simply is not a "sale" within the 
contemplation of § 39-6-402(a)(iii) even under the language found in the statute 
at the time this transfer occurred. The construction that Allied-Signal wishes 
to have applied is that the statutory language can be harmonized if the word 
"consideration," as it appeared in the statute, is held not to include stock or 
other corporate assets when they are exchanged in a transfer that is part of a 
new incorporation. Allied-Signal, in support of this urged construction, points 
to the prompt amendment by the legislature to provide exemptions from the 
regulations promulgated by the Board that reached this transaction. 
Allied-Signal argues that this circumstance, when considered in the context of a 
long-standing silence that apparently manifested acquiescence in the 
Department's past refusal to tax such transfers, demonstrates ineluctably that 
transfers such as the one between Allied and One Newco were not intended to be 
taxed even before the protective amendments had been accomplished. See State 
Board of Equalization v. Tenneco Oil Company, 694 P.2d 97 (Wyo. 1985); Town of Pine 
Bluffs v. State Board of Control of State of Wyoming, 647 P.2d 1365 (Wyo. 1982).

[¶12.]  Allied-Signal's legal theories hinge on 
the premise that the intent that is manifested by the circumstances in regard to 
legislative action, or inaction as the case may be, mandates a conclusion that 
incorporation transfers like this one should not be taxed. Allied-Signal argues 
that statutes must be applied and enforced according to the intent of the 
legislature and discounts the fact that the statutory language in vogue at the 
time failed to inhibit taxation by the Department and, in fact, even apparently 
suggests it. As a further argument in support of its approach, Allied-Signal 
urges that the version of the statute in effect at the time this transaction 
occurred is ambiguous per se and thus, demands construction. This argument is 
derived primarily from Tenneco and hinges upon the long interpretation by the 
Board in a fashion contrary to that ultimately applied. See Tenneco. Cf. Basin 
Electrical Power Cooperative v. State Board of Control, 578 P.2d 557 (Wyo. 1978) (divergent 
contentions by parties can be evidence of ambiguity). Allied-Signal invokes this 
latter argument in an effort to refute plain language in the statute and avoid 
the interpretation that would justify the imposition of the disputed 
tax.

[¶13.]  These arguments were rejected in the 
district court because of the conclusion of that court that the pertinent 
statutory language was unambiguous and neither required nor permitted 
construction to reach a determination of legislative intent. The trial court 
also ruled that Allied-Signal, in spite of its allegations to the contrary, had 
failed to prove the existence of the long-standing departmental policies it 
claimed were indicative of the ambiguity that would justify a different ruling. 
See Tenneco. The district court also alluded to various administrative 
decisions, though they were not named, that, in the judge's view, cast doubt on 
Allied-Signal's stance, and the court then ruled that the language of the 
statute mandates that an incorporation transfer is a taxable event. This is the 
position that the Board espouses in its argument in support of the rationale of 
the district court.

[¶14.]  Allied-Signal has now chosen to rest its 
case on the position previously described. It also contends that the imposition 
of the tax on this transfer is contrary to the Wyoming Administrative Procedure 
Act and the due process provisions of both the federal and the state 
constitutions. Furthermore, it contends that the Board acted arbitrarily, 
capriciously, and contrary to law in determining that the value of stock 
received by Allied in exchange for its assets was greater than zero. This last 
argument, in a different context, becomes the persuasive position in this 
case.

[¶15.]  We must invoke the rule that this court 
looks only to the intent of the legislature when enforcing or construing 
statutes. Billis v. State, 800 P.2d 401 (Wyo. 
1990); Rocky Mountain Oil and Gas Association v. State Board of Equalization, 
749 P.2d 221 (Wyo. 1987); Tenneco; McGuire v. 
McGuire, 608 P.2d 1278 (Wyo. 1980); Woodward v. 
Haney, 564 P.2d 844 (Wyo. 1977). The rule is absolute and 
controlling. Strict adherence to our Wyoming constitution demands that the judicial 
branch of government recognize that it is without discretion, nor does it have 
any latitude, to apply statutes contrary to legislative intent once that intent 
has been ascertained.

[¶16.]  Legislative intent must be ascertained 
initially and primarily from the words used in the statute. Phillips v. 
Duro-Last Roofing, Inc., 806 P.2d 834 (Wyo. 1991); Wyoming Workers' Comp. v. 
Halstead, 795 P.2d 760 (Wyo. 1990); Halliburton Co. v. McAdams, Roux & 
Associates, Inc., 773 P.2d 153 (Wyo. 1989); Dept. of Revenue and Taxation of 
State of Wyo. v. Hamilton, 743 P.2d 877 (Wyo. 1987); Huber v. City of Casper, 
727 P.2d 1002 (Wyo. 1986); In re Adoption of MM, 652 P.2d 974 (Wyo. 1982); Oroz 
v. Hayes, 598 P.2d 432 (Wyo. 1979); Seyfang v. Board of Trustees of Washakie 
County School Dist. No. 1, 563 P.2d 1376 (Wyo. 1977). When the words used are 
clear and unambiguous, a court risks an impermissible substitution of its own 
views, or those of others, for the intent of the legislature if any effort is 
made to interpret or construe statutes on any basis other than the language 
invoked by the legislature. Our precedent demonstrates that this rule also is an 
absolute. If the language selected by the legislature is sufficiently 
definitive, that language establishes the rule of law. Any additional 
construction can be resorted to only if the wording is ambiguous or unclear to 
the point of demonstrating obscurity with respect to the legislative purpose or 
mandate. Blue Cross Ass'n v. Harris, 664 F.2d 806 (10th Cir. 1981); Johnson v. 
Statewide Collections, Inc., 778 P.2d 93 (Wyo. 
1989); Wyoming Insurance Dept. v. Avemco Ins. 
Co., 726 P.2d 507 (Wyo. 1986); Campbell v. State, 709 P.2d 425 (Wyo. 1985); Tenneco. This 
inhibition upon statutory construction offers assurance that the legislative 
efforts and determinations of elected representatives will be made effective 
without judicial adjustment or gloss.

[¶17.]  We previously have articulated the 
proposition that a statute is ambiguous only if it is found to be vague or 
uncertain and subject to varying interpretations. Story v. State, 755 P.2d 228 
(Wyo. 1988) cert. denied ___ 
U.S. ___, 111 S. Ct. 106, 112 L. Ed. 2d 76 (1990); Caton v. State, 709 P.2d 1260 (Wyo. 1985); McArtor v. State, 699 P.2d 288 (Wyo. 1985); Attletweedt v. State, 684 P.2d 812 (Wyo. 1984); Matter of Reed's Estate, 672 P.2d 829 
(Wyo. 1983). 
The converse of this proposition is that the statute is unambiguous if its 
wording is such that reasonable persons are able to agree as to its meaning with 
consistency and predictability. The question of whether an ambiguity exists in a 
statute is a matter of law to be determined by the court.

[¶18.]  We are unable to discern pertinent 
language in this instance that is susceptible to more than one interpretation. 
The words set forth in the statute are apt and are adequately definitive of the 
rule intended by the legislature. Thus, as a matter of law, we are foreclosed 
from any resort to rules of construction that rely on extrinsic events. See 
Longfellow v. State, 803 P.2d 1383 (Wyo. 1991); 
Tenneco; Jahn v. Burns, 593 P.2d 828 (Wyo. 
1979); Zanetti Riverton Bus Lines, Inc. v. State Board of Equalization, 485 P.2d 387 (Wyo. 
1971). Even though the legislature did not act before the Board's rules were 
published, and did act promptly thereafter, that circumstance cannot be relied 
upon in this instance in construing the relevant provisions of the applicable 
statutes, § 39-6-402(a)(iii), (iv), (v), W.S. 1977 (May 1985 Repl.). The 
language of the statute leads to no different result than the conclusion that 
the legislature's intent at the time the statutes were enacted was that 
corporate exchanges like the one that occurred in this case were taxable 
events.

[¶19.]  We agree with the district court that the 
transfer in this case must be considered a transfer for consideration and a 
taxable event. The application of the rules included in this analysis is 
dispositive of Allied-Signal's claim that the district court erred in sustaining 
the finding of the Board that the exchange of assets for stock constituted a 
"sale" within the meaning of § 39-6-402(a)(iii), W.S. 1977 (May 1985 
Repl.).

[¶20.]  The only matter requiring further 
resolution is the one involved in the issue posed by Allied-Signal in which it 
contends that the intrinsic value of the consideration recognized by the 
district court should not be greater than zero. We must address the actual value 
of the consideration furnished for the assets for purposes of computing the 
taxes that are due. In analyzing the methods to be used for determining the 
actual value of the consideration in exchange so as to verify the amount of 
taxes due, we first note the appropriate statutes. Section 39-6-404, W.S. 1977 
(May 1985 Repl.), provided in pertinent part:

"(a) Except as provided 
by W.S. 39-6-405, there is levied and shall be paid by the purchaser on all 
sales of twenty-five cents ($.25) or more an excise tax of three percent (3%) 
upon:

"(i) The sales price of 
every retail sale of tangible personal property within the state; * * 
*."

"Sales price," pursuant 
to § 39-6-402(a)(iv), W.S. 1977 (May 1985 Repl.), is defined as:

"(iv) `Sales price' means 
the consideration paid by the purchaser of tangible personal property excluding 
the actual trade-in value allowed on tangible personal property exchanged at the 
time of transaction, admissions or services which are subject to taxation as 
provided by this article and excluding any taxes imposed by the federal 
government or this article; * * *." (Emphasis added.)

[¶21.]  The first step in making the tax 
assessment based upon a sale of tangible personal property is to define which 
party to an exchange is the purchaser and which party is the seller. Only the 
value of consideration provided by the purchaser is used in the computations. 
Section 39-6-402(a)(iv), W.S. 1977 (May 1985 Repl.). The value of the assets 
that are purchased is not specified as the relevant factor. In this instance, 
Allied had valuable commodities to transfer, and One Newco paid nothing in 
exchange but previously unissued stock in a business that had no substantial 
assets. We identify One Newco as the purchaser in the context of the statutory 
scheme and Allied as the seller. One Newco, which we perceived as having been 
created only for the purpose of acquiring Allied's Wyoming soda ash 
facilities, purchased those assets plus assets of certain other chemical 
companies and paid for them with its first issue of stock. The price paid in the 
exchange, for purposes of the sales tax, had to be the fair market value of One 
Newco stock prior to the transfer. Allied-Signal has contended that the stock of 
One Newco had no inherent value since the new corporation had not acquired any 
assets or conducted any business, and it argues that the value of the 
consideration paid for the assets must be zero. The flaw in this analysis by 
Allied-Signal is that the stock of the new corporation possesses some value, at 
least the value of the expenses of incorporation, whatever that might 
be.

[¶22.]  It follows that the value of the One 
Newco stock was not zero. The Board, to resolve this dilemma, computed the value 
of the stock that was exchanged as being the same as the value of the assets 
contributed by Allied for tax assessment purposes. It now argues that the taxes 
are to be computed only on the price paid by the purchaser, § 39-6-402(a)(iv), 
W.S. 1977 (May 1985 Repl.), and, in the absence of evidence to the contrary, 
that price must be equivalent to the value received. That argument is equally 
flawed because there is no rule that contracting partners must be presumed to 
have traded property of equal value. Since One Newco had no physical assets at 
the time of the transfer and its stock had only the value intrinsic to its 
incorporation expenses, we recognize that the value of its stock at the time of 
the exchange was equivalent only to those expenses.

[¶23.]  In this instance, the difficulty with the 
assessment is that the record is silent as to what the incorporation expenses 
actually were. We cannot speculate with respect to that amount and, on the 
record, we determine that the fair market value of One Newco stock for purposes 
of computing the applicable sales tax in this instance was either zero or 
nominal, even though we understand that the stock had some inherent value. 
Reiman Const. Co. v. Jerry Hiller Co., 709 P.2d 1271 (Wyo. 1985); Krist v. Aetna Cas. & Sur., 667 P.2d 665 (Wyo. 1983); Chrysler Corp. v. Todorovich, 580 P.2d 1123 
(Wyo. 1978). 
Because, on the record in this case, the value of the consideration paid by One 
Newco is essentially zero, we find no statutory justification for assessing 
taxes in the amount determined by the Department, which is the assessment then 
affirmed by the Board and the district court. The approach we take is somewhat 
different from the one argued by Allied-Signal, but the result is the same. No 
tax is due.

[¶24.]  While the foregoing holding resolves this 
case, we deem it important to consider Allied-Signal's contention that the 
statute under which the tax was assessed is ambiguous when incorporation 
transfers are involved and stock is the consideration for the purchase because 
the Department failed to enforce it in that way for the first forty-five years 
of its existence and then chose to so enforce it only for approximately the last 
five years. Allied-Signal relies upon Tenneco and argues that such a diametrical 
interpretation by the Board demonstrates that the statute is ambiguous and must 
be construed by the courts as a matter of law. As we have noted, this argument 
is presented in an effort to refute the clear and unambiguous language that we 
perceived in the statute.

[¶25.]  In Tenneco, the court had before it a 
statute that provided:

"The following property 
is exempt from ad valorem taxation pursuant to the provisions of this act and 
includes facilities, installations, machinery or equipment attached or 
unattached to real property and designed, installed and utilized 
primarily for the elimination, control or prevention of air, water or land 
pollution, * * *." Section 35-11-1103, W.S. 1977. (Emphasis added.)

Tenneco Oil Co. was 
engaged in the construction and operation of a trona mine and soda ash plant 
during 1980 through 1982. Various pollution control devices, that were required 
by law, had been installed as the plant proceeded toward completion. Most of 
these items had been acquired sometime prior to the time they were to be put in 
operation as a part of the functioning plant.

[¶26.]  For some fifteen years, the Board had 
interpreted the tax statutes as exempting such devices from ad valorem taxes 
but, in 1982, the Department advised Tenneco Oil Co. that its newly installed 
pollution control devices could not be exempt that year because of a change in 
the interpretation of the applicable statute. The Department took the position 
that the word "utilize," as it was employed in the statute, must be interpreted 
according to its ordinary meaning, which is "to make use of: turn to practical 
use or account," Webster's New Collegiate Dictionary 1289 (1979), and that 
pollution control devices were subject to taxation until the plant became 
operational. The Department's logic was that the devices could not actually have 
been utilized prior to that time. On review, the Board accepted that argument 
and upheld the assessment by the Department, but the district court reversed 
that ruling. This court affirmed the district court on the ground that a change 
in administrative interpretation of the statute manifests an ambiguity 
justifying statutory construction, and that the correct construction, based 
entirely on extrinsic evidence of legislative intent, demonstrated that the 
pollution control devices were not subject to the disputed taxes.

[¶27.]  It perhaps is important to recognize that 
the statutory language before the court in Tenneco could be subject to different 
interpretations. This court deferred to legislative intent and acknowledged the 
preeminence of plain language over any rules of statutory construction. In 
effect, the rationale that differing interpretations made by the same agency 
demonstrate an ambiguity was made in the context of words that were susceptible 
to more than one meaning. Tenneco was not a case, as argued by Allied-Signal, in 
which clear and unambiguous language not susceptible to varying meanings was 
found to be ambiguous because of inconsistent applications by the administrative 
agency. See Tenneco, 694 P.2d 97. See also McArtor, 699 P.2d 288, and Basin, 578 P.2d 557. The theory urged by Allied-Signal was afforded significant credibility 
in Tenneco because the court acknowledged that administrative statutory 
interpretations, particularly when combined with legislative silence as to those 
interpretations, should be afforded deferential treatment. Tenneco. See Stratman 
v. Admiral Beverage Corp., 760 P.2d 974 (Wyo. 1988). The logic was appropriate under 
the unique circumstances found in Tenneco, but we would not encourage its use 
generally. Tenneco, whatever its perceived similarities may be, does not control 
to the point of establishing a mechanism to override clear statutory language. 
Its teachings go no further than identifying and describing a tool that a court 
may use to resolve an ambiguity once one has been found to be present. That 
evidentiary tool, in and of itself, should not establish the ambiguity, and we 
do not understand that the holding in Tenneco is any different.

[¶28.]  Our rationale for this observation is 
found essentially in the realization that inconsistent statutory interpretations 
often are the product of circumstances that do not really involve an ambiguity. 
An inconsistent interpretation could be the product of simple error, a change in 
circumstances, a change in philosophy by the decision makers, or even a change 
in their identity. Because of the varying possibilities that may lead to 
inconsistent statutory applications, we do not choose to establish a precedent 
in which those differing interpretations establish an ambiguity that will 
justify invoking rules of construction based on extrinsic considerations. 
Furthermore, we recognize a subtle invasion of the separation of powers doctrine 
if Tenneco is applied as Allied-Signal proposes because it is clear that it is 
the role of the courts to determine ambiguity in a statute. If ambiguity must be 
recognized because of inconsistent interpretations by the executive branch, then 
the executive branch, and not the judicial branch, is establishing the 
ambiguity. That would not comport with Article 2, Section 1 of the Constitution 
of the State of Wyoming. 

[¶29.]  In addition, unnecessary construction 
premised upon extrinsic evidence refuting clear statutory language would 
constitute an invasion of the legislative powers also described in our 
constitution. The legislature is entitled to the presumption that its words will 
be understood and obeyed, and the language incorporated in the statute is the 
method employed to convey its mandates. A rule that would infringe upon that 
concept, such as the rule of acquiescence invoked here, is inappropriate, and 
the method of construction is to be resorted to only when the words of the 
statute are sufficiently unclear or ambiguous as to obscure the legislative 
intent.

[¶30.]  In summary, we agree with the district 
court that the relevant statute should be applied exactly as it is written. 
There was a taxable sale. In so holding, we also agree that sales taxes were 
appropriately assessed on transactions such as that occurring in this case as of 
the time of the transaction. This rule fits with our general presumption 
favoring tax statutes and strictly limiting exemptions. State Board of 
Equalization v. Wyoming Automobile Dealers 
Association, 395 P.2d 741 (Wyo. 1964). The assessment of the tax, 
however, is tied to the consideration that is paid, and it is inappropriate to 
value that consideration by reference to the value of the property sold. In this 
instance, the record does not afford any basis for establishing any value for 
the stock used to purchase the assets other than a nominal one, and the record 
does not establish what that nominal value was. Consequently, while there was a 
taxable sale, no tax is due because the record fails to establish the amount 
paid for the assets acquired.

[¶31.]  The analysis and resolution of the issues 
set forth above make it inappropriate and unnecessary to consider 
Allied-Signal's concerns with respect to alleged violations of the Wyoming 
Administrative Procedure Act and the state and federal 
constitutions.

[¶32.]  The judgment of the district court and 
the decision of the State Board of Equalization are reversed.

URBIGKIT, 
C.J., 
files a specially concurring opinion.

URBIGKIT, Chief Justice, 
specially concurring.

[¶33.]  I specially concur. Although well aware 
of the current national dialogue on the subject of statutory construction, 
including specifically one approach characterized to be a literalistic 
implementation, I do not agree with a closed-end and cramped adaptation just 
like I do not agree that because jurists may differ in the interpretation of a 
contract, such disagreement necessarily makes the contract ambiguous. We may be 
the ambiguity.

[¶34.]  I have no problem with the application of 
"legislative intent," whatever it may be, but the difficulty is introduced by 
attempted segmentation of an amorphous intent which had been created as the 
composite result of a multiplexed, many faceted process. Intent is normally a 
question of fact. First Nat. Bank v. Swan, 3 Wyo. 356, 23 P. 743 (1890). This court in 
Spriggs v. Cheyenne Newspapers, 63 Wyo. 416, 449, 182 P.2d 801, 814 (1947) 
(quoting Edie v. Coleman, 235 Mo. App. 1289, 141 S.W.2d 238 (1940)) 
said:

"`The intent of a person 
cannot be proven by direct and positive evidence. It is a question of fact, to 
be proven, like any other fact, by acts, conduct, and circumstances'. People v. 
Johnson, 131 Cal. 511, 514, 63 P. 842, 843."

See Williams v. State, 
807 P.2d 271 (Okla. Cr. 1991). Justice White in McCormick v. 
United States, ___ U.S. ___, ___, 111 S. Ct. 1807, 1815, 114 L. Ed. 2d 307 (1991) 
(citing Cheek v. United States, ___ U.S. ___, 111 S. Ct. 604, 112 L. Ed. 2d 617 
(1991)) stated the rule with simplicity: "It goes without saying that matters of 
intent are for the jury to consider." Construction of statutes is, however, a 
determination to be made by the court as a question of law, McGuire v. McGuire, 
608 P.2d 1278 (Wyo. 1980), since the construction or 
interpretation defines what the law actually is. Shepperd v. Boettcher & 
Co., Inc., 756 P.2d 182 (Wyo. 1988); Dowdell v. 
Bell; 477 P.2d 170 (Wyo. 1970); 73 Am.Jur.2d 
Statutes §§ 143 and 145 (1974). 

[¶35.]  I specially concur because of an 
unwillingness to join in the preclusive and overstated language that addresses 
rules of statutory construction following analysis that this court's approach 
becomes both overreaching and insufficient. For example, Wyo. Const. art. 1, § 
10 guarantees that the accused shall have the right "to be confronted with the 
witnesses against him * * *." Yet in Jandro v. State, 781 P.2d 512, 523 (Wyo. 
1989), we fashioned an exception to the literal meaning of that amendment when 
we adopted the construction furnished by Bourjaily v. United States, 483 U.S. 171, 107 S. Ct. 2775, 2782, 97 L. Ed. 2d 144 (1987). In Bourjaily, it was said that 
"[w]hile a literal interpretation of the Confrontation Clause could bar the use 
of any out-of-court statements when the declarant is unavailable * * *," id., 
the literal meaning would be rejected as too extreme. See likewise Dowdell, 477 P.2d 170, where this court added an unstated "intentionally" as a statutory 
criterion. I cannot find that our constitutional and statutory construction 
concepts apprehend a system as absolute as is now suggested by the majority in 
this rather clear decision without need for conceptualization of this 
literalistic language overlay.

[¶36.]  Certainly, the literal meaning of 
constitutional provisions or statutory language should be given effect when we 
search for intent when in fact probably no one intent ever existed at the time 
of of enactment. Texas Co. v. Siefried, 60 Wyo. 
142, 147 P.2d 837, reh'g denied 60 Wyo. 142, 150 P.2d 99 (1944). Additionally, 
there are times in which the literal meaning of a text is rejected or superseded 
because the result is undesirable and a clear violation of the probable purpose 
would otherwise be achieved. Deherrera v. Herrera, 565 P.2d 479 (Wyo. 1977); Hecht v. Carey, 13 Wyo. 154, 78 P. 705 
(1904). Any concept that indicates our rules of construction do not afford 
flexibility is, in my conclusion, highly inaccurate. State ex rel. Benham v. 
Cheever, 71 Wyo. 303, 257 P.2d 337 (1953). Cf. McArtor v. 
State, 699 P.2d 288 (Wyo. 1985), where this court used the very 
widest brush to paint the defendant into a valid criminal charge by abject 
statutory construction.

[¶37.]  Among the multitude of texts, there are 
variant explanations and alternative approaches. Perhaps from a programmatic 
analysis, several are easily defined.

     1. Legislators do not 
know how to define their desired intent with complete certainty with the 
language furnished to them by the drafting service.

     2. Statutes do not 
exist like electrons and neutrons motionless at absolute zero in a glass bottle. 
There are other statutes, historical events and accidents of enactment that 
relate to the linguistically created and individually cultivated "legislative 
intent."

     3. Separate jurists do 
not derive exactly the same "communication" from the identical statutory 
provision. Any listener or reader in the communicative process "understands" 
only within the concept of the combination of understanding and beliefs into 
which the communication is embedded.1

[¶38.]  Competing with the literalistic, common 
sense, and observed purpose is the legislative history interpretive reliance. 
The wide divergence is definitively illustrated by the almost opposite views of 
Retired Justice William J. Brennan, Jr., who is a staunch supporter, compared to 
Justice Antonin Scalia, who is a caustic opponent of the application and 
utilization of legislative history. A case of note is Public Citizen v. United 
States Dept. of Justice, 491 U.S. 440, 109 S. Ct. 2558, 105 L. Ed. 2d 377 (1989). 
See Comment, The Role of Legislative History in Statutory Interpretation: A New 
Era After the Resignation of Justice William Brennan?, 56 Mo.L.Rev. 121 (1991). 
See also Comment, The Value of Nonlegislators' Contributions to Legislative 
History, 79 Geo.L.J. 359 (1990).

[¶39.]  It is recognized that intent must be 
presumed or otherwise the legislature has no purpose. "If there is no 
ascertainable legislative intent, what then is the part played by the 
legislature in our system of government?" E. Crawford, Statutory Construction: 
Interpretation of Laws § 163 at 255 (1940). That author further 
recognized:

     After all, in most 
instances, the real difficulty lies in determining what is the legislative 
intent rather than in determining whether one exists. Generally, such an intent 
may be presumed to exist, for it is not a common occurrence to find legislation 
which is wholly meaningless. More often the statute may appear to have more than 
one meaning. Such a condition may be due to the inability of the interpreter to 
grasp the legislative meaning rather than to the lack of a definite meaning on 
the part of the law-makers. It is likely that the legislators at the time the 
statute was passed had a pretty exact idea of what the statute meant. At least, 
they were in a position to have a clear knowledge of the statute's meaning, 
which is generally more than can be said with reference to those called upon to 
interpret the law months or years later, especially where resort to the debates 
and committee reports is not allowed. Words which later seem ambiguous, at the 
time the law was enacted most likely were understood to be used in a certain 
sense. Legislatures are composed of men with various views. One may properly 
assume that each member sought to promote and to protect his belief, and 
consequently watched the language employed carefully. Surely, the resulting 
legislation represents the composite views of all the members of the legislature 
- or at least, the views of those voting in favor of the statute - particularly 
where the statute involves a question of great public interest. The language of 
the statute is, of course, the reservoir of the legislative intent. But the 
difficulty in ascertaining this intent in many cases with any convincing 
assurance of its existence, has undoubtedly led to the assertion or belief that 
it does not exist. But whether a collective legislative intent exists or not, we 
must recognize or assume its existence as a matter of fact. Such an assumption 
or existence is necessary in order for a statute to express the legislative 
will. After all, a statute is more than a group of words, phrases and sentences. 
It has a meaning. And the meaning must be one intended by the law-makers or the 
law-makers do not legislate.

Id. at 255-56 (footnotes 
omitted).

[¶40.]  We sometimes fail to recognize, in the 
science of adaptation and application, that it is necessary to distinguish 
between ascertaining the legislative intent, Matter of Voss' Adoption, 550 P.2d 481 (Wyo. 1976), and in applying the statute, Reliance Ins. Co. v. Chevron 
U.S.A., Inc., 713 P.2d 766 (Wyo. 1986). "The former consists in ascertaining the 
legislative meaning, while the latter is the determination of whether the facts 
of a given case are within and without the legislative meaning previously 
ascertained." E. Crawford, supra, § 173 at 274.

[¶41.]  E. Crawford, supra, § 173 at 274 n. 134, 
quotes the early case of Breashears v. Norman, 176 Ark. 26, 2 S.W.2d 53, 54 
(1928), which states most appropriately the rationale or composite approach: 
"`The intention of the legislature in framing a statute is to be collected from 
the words used, the subject-matter, the effect and consequences, and the spirit 
and reason for the law.'"

Since the ascertainment 
of the legislative intent or meaning and the application of the statute to the 
facts are closely connected and often seem inseparable, the separation into two 
distinct processes may seem artificial. The division into two processes, 
however, may be justified by the fact that a statute cannot be applied until the 
legislative intent has been ascertained. That the separation is not purely 
artificial is also further indicated when we realize that even an unambiguous 
statute must also be applied.

E. Crawford, supra, § 173 
at 275.

[¶42.]  Wyoming cases, a number of which are 
cited in the majority, can be found advancing almost any concept when then 
immediately directed to the purpose of the court to either achieve the result 
desired, McArtor, 699 P.2d 288, or more nearly fit the assumed purpose into the 
assumptions of result and intent attributed to the legislature. Halliburton Co. 
v. McAdams, Roux and Associates, Inc., 773 P.2d 153 (Wyo. 1989). Clearly, 
textual inconsistencies and substance ambiguity are not synonymous terms.2 Cf. Halliburton Co. and Attletweedt 
v. State, 684 P.2d 812 (Wyo. 1984), involving 
inconsistency, with Sanches v. Sanches, 626 P.2d 61 (Wyo. 1981), involving 
ambiguity.

[¶43.]  One of the most decisive and thoughtful 
analyses was provided by District Judge Parker in Kelsey v. Taft, 72 Wyo. 210, 263 P.2d 135, 
137-38 (1953) (emphasis in original):

We agree that the literal 
meaning of any wording of law - be it statute or otherwise - is unjustified, and 
interpretations should be made in accordance with the drafters' intention, 
particularly in the case of legislation. However, there is a limitation upon 
this rule, i.e., before a statute may be interpreted according to the spirit or 
intention of the legislature, the portion of the statute so interpreted must be 
free and clear from ambiguity.

District Judge Tidball, 
writing for the Wyoming Supreme Court in the early case of Houghton Bros. v. 
Yocum, 40 Wyo. 57, 61, 274 P. 10, 11 (1929), recognized the non-literal 
practical adaptation concept:

     In construing the 
above sections of the statute, some general rules of construction should be 
borne in mind. Statutes should, of course, be construed with a view to effecting 
the legislative intent, and such intent must be ascertained from the statute or 
statutes. However, a literal construction of the words used will not be 
sanctioned, when such construction would defeat the evident purpose of the 
Legislature. * * * And a construction producing unjust or absurd results will 
not be adopted, unless the terms of the statute preclude any other 
construction.

For an identical concept 
of construction to recognize the "obvious purpose for which [the statute is] 
enacted," see Mapes v. Foster, 38 Wyo. 244, 266 P. 109, 116 (1928).

[¶44.]  A literalistic or absolutist adaptation 
of statutory construction simply ignores the multi-faceted, quite different 
participants in the legislative process including sponsors, staff, leadership 
and concurrent outside influences.3 For example, a major intent in much 
legislation is to get it passed with something akin to the initial direction 
envisioned at introduction. That challenge is to cross the goal line by 
litigative enactment. The composite effort of all active participants is what 
determines passage and that result should be applied in accord with the language 
used with reason, recognition of historical purpose and anticipation of intended 
emplacement as a part of the composite societal rules the jurisdiction's 
statutory laws. Sometimes the statute simply cannot be enforced because it lacks 
sense and is beyond the power of the judiciary to correctly remedy by any 
interpretation. State ex rel. Fawcett v. Board of CountyCom'rs 
of AlbanyCounty, 73 Wyo. 69, 273 P.2d 188 (1954). 

[¶45.]  It is recognized that there is no 
legislative intent since the composite group cannot speak from one person's 
undisclosed or indeterminate "purpose." MacCallum, Legislative Intent, 75 Yale 
L.J. 754 (1966).4 What we really do to apply statutes 
in case resolution by analysis of the composite purpose with assumption of first 
search in the words provided is to add the context existent for a conglomeration 
into the broad standards of society created by required application. In 
pragmatic distillation, finding "pure intent" from "plain provisions" is 
antithetical if not oxymoronic. More nearly reaching reason is determination of 
purpose to establish effect by application of a reasonable result to the 
provisions which have been enacted in accord with history and causalities. 
Stauffer Chemical Co. v. Curry, 778 P.2d 1083 (Wyo. 1989).

[¶46.]  In this effort to define a "purpose" rule 
for statutory construction, it is quickly apparent that there are a multitude of 
rules each correct to a degree and frequently competing. Professor Karl N. 
Llewellyn provides a point-counterpoint observation: "If language is plain and 
unambiguous it must be given effect" (citing among other authorities Newhall v. 
Sanger, 92 U.S. 761, 23 L. Ed. 769 (1875)) and counterpoint, "[n]ot when literal 
interpretation would lead to absurd or mischievous consequences or thwart 
manifest purpose" (also citing among other authorities Clark v. Murray, 141 Kan. 
533, 41 P.2d 1042 (1935)). K. Llewellyn, Remarks on the Theory of Appellate 
Decision and the Rules or Canons About How Statutes Are To Be Constructed, 3A 
Sutherland Stat. Const. 203, 208 (4th ed. 1986) (quoting Llewellyn, Remarks on 
the Theory of Appellate Decision and the Rules or Canons About How Statutes Are 
to be Construed, 3 Vand.L.Rev. 395 (1950)). The quoted items are only number 
twelve of a total of twenty-eight statutory rules of construction with each then 
compared to the adverse well-recognized countervailing principle.

[¶47.]  A typical statement of a plain meaning 
rule is "`where the language is plain and admits of no more than one meaning, 
the duty of interpretation does not arise and the rules which are to aid 
doubtful meanings need no discussion.'" J. Kernochan, Statutory Interpretation: 
An Outline of Method, 3A Sutherland Stat.Const. 165, 170 (4th ed. 1986) (quoting 
Caminetti v. United States, 
242 U.S. 470, 485, 37 S. Ct. 192, 194, 61 L. Ed. 442 (1917)). "The uncertain possibility of an exception to the plain 
meaning rule in the event its application leads to `absurd or wholly impractical 
results' is also referred to in the American cases." J. Kernochan, supra, 3A 
Sutherland Stat.Const. at 170 (quoting Caminetti, 242 U.S.  at 490, 37 
S.Ct. at 196). See likewise Stauffer Chemical Co., 778 P.2d 1083.5

[¶48.]  It is further amplified: 

A major change of 
attitude has, however, overtaken the plain meaning rule in the 
United 
States. After a long period in which the plain 
meaning rule coexisted with rules based on legislative intent and the use of 
legislative history, the United States Supreme Court in 1940 in United States v. 
American Trucking Associations [310 U.S. 534, 60 S. Ct. 1059, 84 L. Ed. 1345 
(1940)] used forceful language to repudiate the plain meaning rule as a rule 
excluding resort to sources of interpretive aid beyond the words of the statute. 
The Court stated: "When aid to construction of the meaning of words, as used in 
the statute, is available, there certainly can be no `rule of law' which forbids 
its use, however clear the words may appear on `superficial examination'." 
[Id. at 544, 
60 S. Ct.  at 1064.] Since that time, the Supreme Court has seemed to mean what it 
said so forcefully. Although references to plain meaning or literal meaning 
appear from time to time in the cases, they are not used by the court to support 
exclusion from judicial consideration of relevant statutory or non-statutory 
materials bearing on the intent or purpose of the measure in question. And in 
1974 in Cass v. United States, [417 U.S. 72, 94 S. Ct. 2167, 40 L. Ed. 2d 668 
(1974)] the Supreme Court, when urged anew by a litigant to apply the old 
exclusionary plain meaning rule, reaffirmed in express terms the language of the 
American Trucking case quoted earlier. But notwithstanding all this, the rule 
dies hard, if it dies at all. * * *

     There are many reasons 
why the literal or plain meaning approach should be abandoned, along with the 
golden rule that builds on it. Not least is the fact that the literal rule runs 
counter to the findings of students of the symbolic aspects of language. Pitched 
as it is in terms of the plain meaning of statutory words, it assumes 
that words may have a single necessary meaning independent of their full 
context, without regard to how those words were used. This is dangerous and 
unwise. At root, the literal approach puts the wrong question. The question in 
human interchanges is not what the words mean but what the user of the words 
meant by them. Given the inexactness and imperfection of words as symbols in a 
world of endlessly varied and shifting facts, to put the right question is 
crucial. Words are means not ends. They are vehicles for the transfer of thought 
from one human agency to another. A statute, made up of these words, these 
vehicles, these means, is in significant part a communication from the 
legislature to the courts and other addresses. If the communication is to work 
well, the task must be in the first instance to ascertain not what the words as 
words mean abstractly or to the court or as a matter of common usage but what 
the legislature sought to convey when it employed them. * * *

     The need for asking 
the right question in interpretation is underlined when one reflects on the 
difficulties a statutory draftsman faces when he must generalize with imperfect 
words in framing a statutory rule to deal with an uncertain future. * * 
*

     If the literal rule 
ignores the limits of language and the teachings of semantics and assumes 
unattainable perfection in drafting, it also conflicts with the fundamental 
principle of legislative supremacy. Curiously, it is argued by some scholars 
that deference to the legislature and the avoidance of judicial lawmaking are 
reasons for adopting the literal rule. It is assumed in some of these cases that 
the only alternative is the exercise of an unwarranted discretion. But the risk 
is that the meaning which seems plain or ordinary to the deciding judge is not 
the one attached to the statute by its enactors.

J. Kernochan, supra, 3A 
Sutherland Stat. Const. at 170-73 (footnotes omitted). 

[¶49.]  Any individual statute is a single strand 
within the woven law. SeeState v. Sodergren, 715 P.2d 170 
(Wyo. 1986) and State v. Sodergren, 686 P.2d 521 (Wyo. 
1984). The use to which it is actually put is dependent upon the surrounding 
statutes and the societal environment within which it is used. Like all things 
where change is inevitable, the environment into which the statutory provision 
in its specific language is applied will, from time to time, change. The 
responsibility of the judiciary is to assure reasonable workability of the 
entire law and faithfully distribute the legislators' intended burden upon that 
strand. Like man, no statute can totally exist in separate 
isolation.

[¶50.]  Additionally, the equipment the judiciary 
is provided for decision is confined to that communicative power of language, an 
inexpert science or system as it is,6 and even more so when it is the 
product of the push-pull and countervailing factors which are implicit in 
legislative action ultimately resulting in enactment. Judge Learned Hand, in the 
well-considered case of Cabell v. Markham, 148 F.2d 737, 739 (2d Cir.), cert. 
granted 325 U.S. 847, 65 S. Ct. 1415, 89 L. Ed. 1969, aff'd 326 U.S. 404, 66 S. Ct. 193, 90 L. Ed. 165 
(1945), addressed a literalistic view:

The defendants have no 
answer except to say that we are not free to depart from the literal meaning of 
the words, however transparent may be the resulting stultification of the scheme 
or plan as a whole.

     Courts have not stood helpless in 
such situations; the decisions are legion in which they have refused to be bound 
by the letter, when it frustrates the patent purpose of the whole statute. * * * 
Of course it is true that the words used, even in their literal sense, are the 
primary, and ordinarily the most reliable, source of interpreting the meaning of 
any writing: be it a statute, a contract, or anything else. But it is one of the 
surest indexes of a mature and developed jurisprudence not to make a fortress 
out of the dictionary; but to remember that statutes always have some purpose or 
object to accomplish, whose sympathetic and imaginative discovery is the surest 
guide to their meaning.

[¶51.]  In K. Llewellyn, supra, 3A Sutherland 
Stat.Const. at 205-06 (emphasis in original), it is noted:

     If a statute is to 
make sense, it must be read in the light of some assumed purpose. A statute 
merely declaring a rule, with no purpose or objective, is nonsense.

     If a statute is to be 
merged into a going system of law, moreover, the court must do the merging, and 
must in so doing take account of the policy of the statute - or else substitute 
its own version of such policy. Creative reshaping of the net result is thus 
inevitable.

     But the policy of a 
statute is of two wholly different kinds - each kind somewhat limited in effect 
by the statute's choice of measures, and by the statute's choice of fixed 
language. On the one hand there are the ideas consciously before the draftsmen, 
the committee, the legislature: a known evil to be cured, a known goal to be 
attained, a deliberate choice of one line of approach rather than another. Here 
talk of "intent" is reasonably realistic; committee reports, legislative debate, 
historical knowledge of contemporary thinking or campaigning which points up the 
evil or the goal can have significance. 

     But on the other hand 
- and increasingly as a statute gains in age - its language is called upon to 
deal with circumstances utterly uncontemplated at the time of its passage. Here 
the quest is not properly for the sense originally intended by the statute, for 
the sense sought originally to be put into it, but rather for the sense 
which can be quarried out of it in the light of the new situation. Broad 
purposes can indeed reach far beyond details known or knowable at the time of 
drafting. A "dangerous weapon" statute of 1840 can include tommy guns, tear gas 
or atomic bombs. "Vehicle," in a statute of 1840, can properly be read, when 
sense so suggests, to include an automobile, or a hydroplane that lacks wheels. 
But for all that, the sound quest does not run primarily in terms of historical 
intent. It runs in terms of what the words can be made to bear, in making sense 
in the light of the unforeseen.

[¶52.]  Professor Reed Dickerson initiates the 
inquiry about there being a problem by quoting H. Hart, Jr. and A. Sacks, The 
Legal Process 1201 (tentative edition 1958): "`The hard truth of the matter 
is that American Courts have no intelligible, generally accepted, and 
consistently applied theory of statutory interpretation.'" R. Dickerson, The 
Interpretation and Application of Statutes 1, 1 (1975) (emphasis in 
original).

[¶53.]  He then recognized:

     The inadequacies of 
terminology also plague such other basic terms as "meaning," "plain meaning," 
"intent," "purpose," "express," "implied," "strict interpretation," "liberal 
interpretation," "equitable interpretation," "ambiguity," "vagueness," 
"generality," "remedial," "penal," "retroactive," and "context." There are 
others.

* * * * * *

     If one of the two 
basic steps in reading and applying statutes is to solve the relevant problems 
of meaning, surely a court should pay appropriate deference to the established 
principles of communication. * * *

     The inadequate 
attention paid to matters of communication is reflected in many ways, most 
basically in the typical lawyer's imperfect understanding of the respective 
roles played by express language, on the one hand, and by context, on the other. 
Although context is now universally recognized as a vital conditioning element 
in all forms of communication, little has been done to make clear what it 
consists of and how it operates.

R. Dickerson, supra, at 
2-3.

[¶54.]  The diverse natures to which even a term 
such as "strict interpretation" is actually applied in totally different 
contexts is illustrated by the list of five rules provided by Dickerson, each of 
which has come to denote a character of strict construction. Dickerson includes 
in an appendix a catalogue of forty popular misconceptions, as he said, "all of 
which have been causing trouble, [and] are nominated for quick oblivion." 
Id. at 288. He 
includes as examples:

The problems of applying 
statutes in the context of specific controversies are exclusively those of 
ascertaining legislative meaning.

* * * * * *

The express meaning of a 
statute is all important.

* * * * * *

The interpretation of a 
statute and its application are the same thing. Consequently, the interpretation 
of a statute is a one-stage, monolithic process.

* * * * * *

Legislative intent is 
useful in resolving uncertainties of meaning.

and finally,

The legislature's actual 
intent, however ascertained, should never be frustrated by the 
court.

Id. at 288-89.

[¶55.]  The California Supreme Court, in the 
recent case of Woods v. Young, 53 Cal. 3d 315, 279 Cal. Rptr. 613, 807 P.2d 455, 
459 (1991), provided simple rules which are similar to what this majority now 
does, but certainly without the adamancy and empirical certainty: 

     In construing 
statutes, we must determine and effectuate legislative intent. * * * To 
ascertain intent, we look first to the words of the statutes. * * * "Words must 
be construed in context, and statutes must be harmonized, both internally and 
with each other, to the extent possible." (California Mfrs. Assn. v. Public 
Utilities Com. (1979) 24 Cal. 3d 836, 844, 157 Cal. Rptr. 676, 598 P.2d 836.) 
Interpretations that lead to absurd results or render words surplusage are to be 
avoided. (Ibid.)

[¶56.]  To what do I then object to in the 
literalistic application now presented for the first time by this court? First, 
since legislative intent is a first stage action and an ephemeral concept not 
defined in certainties, I find no justified premise that it is absolute and 
controlling. The syllogism follows as a question: What does the court do if it 
cannot, with a defined certainty, determine what the legislative intent may be? 
Further: How do you determine legislative intent with this certainty without a 
comprehensive analysis of the history, purpose, personalities and maneuvering 
involved in the creation of the product? The next problem presented is the 
supposition that what the particular jurist considers to be clear and 
unambiguous language may not have any necessary relation to the intent of the 
sponsor, co-sponsor or predominate group involved in enactment. To say that any 
rule is absolute completely destroys the validity of saying that intent is 
absolute, since intent may be ill-expressed or ill-determined. As a syllogism, 
the conclusion simply does not follow that these inhibitions upon statutory 
construction assure that the legislative efforts as a determination that the 
intent of elected representatives will be made effective without judicial 
adjustment or gloss. What we have in the absolutist application of statutory 
interpretation and application is a considerably greater result-oriented, 
judicially-defined legislative process than would ever be the case if a 
reasonable standard using all factors had been equally applied. I believe that 
literalists or originalists are essentially result-oriented adjudicators by 
characterizations to be provided excuse for predetermination.

[¶57.]  I suggest we step back and seek 
satisfaction in the generalists' principles of reason and realism addressed by 
this court in Kelsey, 263 P.2d 135 and Houghton Bros., 274 P. 10. The act I from 
language context and history is as it may be the apparent intent to be developed 
as the effectuation of the purpose for which the enactment occurred. With 
purpose in mind, construction for any particular case as act II should be 
pursued with recognition that a rule of reason should be applied since intent in 
the explicit attribution to the multi-participants in result can never be 
actually determined with certainty in regard to all events of humanity where 
post-enactment utilization may be challenged in enforcement.

[¶58.]  This case illustrates statutory 
construction by characterization. The basic business transaction presented here 
was a tax-free exchange or corporate reorganization normally tailored by the 
careful business planner to minimize or exclude tax obligations under the 
purview of the Internal Revenue Code by operation of 26 U.S.C.S. § 351 (1990). 
The history provided by this record is that in the earlier stages of the 
Wyoming law application, the § 351 type 
transaction was also considered to be tax free by administrative interpretation 
of the original Wyoming statute.

[¶59.]  In 1985, regulations of the Wyoming State 
Tax Commission were changed in order that personal property transfers included 
within these kinds of § 351 exchanges could be taxed as a sale under Wyoming 
law. No statutory change is presented to authenticate the "modernized" tax 
department approach, since the 1985 department construction addressed what was 
considered to be an "ambiguous" statute. The broad sweep of the problem in 
business organization and reorganization, not including the $2,838,767 tax bite 
created here, prompted early legislative attention. Wyo. Sess. Laws. ch. 166 
(1987) was enacted which, by imposition into W.S. 39-6-402, clearly adopted the 
federal tax free status for state sales tax liability. See W.S. 
39-6-402(a)(iii)(B), (E), (F), (K) and (M) and the comparable provisions of the 
state use tax, W.S. 39-6-502.7 This tax claim probably caused that 
legislative change.

[¶60.]  Any anatomical assessment of the pre-1987 
statute suggests potential ambiguity existed about taxability of the § 351 
exchange and advanced further question about W.S. 39-6-402(a)(iv), which 
remained unchanged for defining sale price:

"Sales price" means the 
consideration paid by the purchaser of tangible personal property excluding the 
actual trade-in value allowed on tangible personal property exchanged at the 
time of transaction, admissions or services which are subject to taxation as 
provided by this article and excluding any taxes imposed by the federal 
government or this article[.]

[¶61.]  The State, in presentation of this case 
upon facing the refund claim of the reorganized corporate entity after the tax 
had been initially paid upon billing, first argued that the law was clear and 
unambiguous and must be applied to create the tax by interpretation 
of the legislative intent. The trial court accepted that characterization, 
applied W.S. 39-6-402(a)(iii) and confirmed the tax obligation. The trial 
court held that for the purpose of the unambiguous statute, the 
transaction was a transfer for consideration of tangible personal property. The 
trial court further found that the exchange stock had value as measured by what 
it bought - a very significant trona mining and manufacturing company with all 
of its equipment and general assets.

[¶62.]  As we now search for a characterization 
of either ambiguous or unambiguous rather than reasonably determined legislative 
intent and purpose, further contentions of the litigants before this 
court becomes interesting. Appellant taxpayer looked at the refund and 
argued that the law was ambiguous and a further search for legislative 
intent should be pursued. The company also argued that the stock value was 
minimal since it was a corporate reorganization transaction where in effect no 
real money in a buy/sell transaction actually passed hands. The State continues 
in response by brief and argument that the statute was not ambiguous and 
that W.S. 39-6-402(a)(iii) covers the transaction for imposition of the tax 
liability. It is further contended that consideration existed and substantial 
evidence sustained the agency decision. The taxpayer then summarized the 
parties' contrasting views in reply brief:

     The principal issue 
presented by this appeal is whether a 1986 contribution of assets from a parent 
corporation to its newly-formed, wholly-owned subsidiary, in exchange for the 
first issue of stock of the subsidiary, constituted a "sale" within the meaning 
of W.S. 39-6-402(a)(iii). At the time of the subject transaction, W.S. 
39-6-402(a)(iii) defined a "sale" simply as a transfer of tangible personal 
property for a consideration. In its brief, Appellee maintains that this terse 
definition so clearly and unambiguously encompassed such incorporation transfers 
that construction of the statute is inappropriate. However, a careful review of 
this portion of Appellee's brief * * * reveals that the only basis for 
Appellee's position is its own unsupported, conclusory statements that the 
statute is unambiguous.

     The question of 
whether an ambiguity exists is to be determined, in this case, with the 
application of the principles established by this Court in State Board of 
Equalization v. Tenneco Oil Co., 694 P.2d 97 (Wyo. 1985). Appellee asserts that 
Tenneco Oil has no bearing in this appeal because the ambiguity of the statute 
has not been established * * *. In other words, Appellee states that Tenneco Oil 
becomes applicable only after it is determined that an ambiguity exists. This 
statement overlooks a very significant portion of the Tenneco Oil decision, for 
Tenneco Oil not only guides us in the proper construction of statutes, it also 
addresses the threshold question of when an ambiguity exists. As 
discussed in Appellant's initial brief * * *, Tenneco Oil clearly establishes, 
on the basis of Appellee's long-standing, contrary interpretation of W.S. 
39-6-402(a)(iii), and the divergent views of the parties, that the statute is 
ambiguous and that the question of its meaning must be addressed.

(Emphasis in 
original.)

[¶63.]  The majority, by characterization in 
agreement with the State, now determines that the statute was not 
ambiguous even before corrective amendment by the legislature, but then 
concludes that no consideration was paid by the newly organized One Newco, Inc. 
in its acquisition of the business in exchange for its newly issued treasury 
corporate stock.

[¶64.]  I agree in special concurrence that the 
tax should not be assessed. This conclusion comes by application of reasonable 
rules of interpretation to an ambiguous statute as the goal for 
applying legislative purpose and implied intent. Nothing suggests that the 
legislature ever expected that the sales tax under the Wyoming statute should be 
applied to the no-cash-consideration type of business organization and 
reorganization included within the Internal Revenue Code tax for exchange 
provisions of § 351.

[¶65.]  I could conversely say that corporate 
stock creates its own "value" by capacity to acquire property of significant 
value. However, for the purposes of addressing legislative purpose and intent in 
statutory construction, by application of the language that can provide variant 
ambiguities in plain word text, I superimpose purpose and reasonable 
construction.

     One of the fundamental 
principles of statutory construction is to attempt to ascertain the legislative 
intent and to give its effect. * * * Also, in construing a statute, this court 
must look at the statutory objective to be accomplished, the problem to be 
remedied, or the purpose to be served, and then place on the statute a 
reasonable construction which best achieves the purpose of the statute, rather 
than a construction defeating the statutory purpose. * * * To further ascertain 
the intent of the Legislature, the Supreme Court may examine the legislative 
history and the record of floor explanations or debate of the act in 
question.

State v. Burnett, 227 
Neb. 351, 417 N.W.2d 355, 357 (1988).

[¶66.]  In analysis of the intrinsic character of 
the corporate reorganization transaction where no actual money is paid and no 
real change in finite ownership is created, I specially concur in concluding 
that the legislature, both before and after 1987, did not statutorily propose a 
tax on this transactional activity. Plainly, I could have, as did the trial 
court, find to the contrary. Saffels v. Bennett, 630 P.2d 505 (Wyo. 1981) (see, however, Wetering v. Eisele, 682 P.2d 1055 (Wyo. 1984) which "disapproved" the 
Saffels interpretation and Butler v. Halstead By 
and Through Colley, 770 P.2d 698 (Wyo. 1989) which superseded both in statutory 
construction); Sanches, 626 P.2d 61. The clarity of the subject or absence 
thereof is illustrated by an introductory segment in Weisberg, The Calabresian 
Judicial Artist: Statutes and the New Legal Process, 35 Stan.L.Rev. 213, 213-15 
(1983) (footnotes omitted) which, although somewhat overblown in rhetoric, 
combines much of what is logically obvious and currently recited by many 
commentators on the law:

Nineteenth-century judges 
often purported to follow very specific and binding rules for reading statutes, 
but in this century those rules have weakened into quaint and naive homilies, 
few of which have survived Karl Llewellyn's fiendishly deconstructive 
achievement of placing them in mutually cancelling pairs. Although modern judges 
probably spend more time heeding the commands of legislators than the commands 
of either earlier courts or the constitutional framers, they do not seriously 
believe themselves bound or even guided by general principles of interpretation 
beyond the vaguest adages about respect for legislative intent. 

     Undisturbed by the 
very sophisticated (and mainly academic) debate over the distinction between the 
meaning of enacted words and the intent of the enacting legislature, most judges 
readily claim to be bound by "plain" statutory language. Where there is neither 
statutory language that is plain nor legislative history that is unambiguous, 
courts often infer a provision's meaning or intent from the larger purpose of 
the statute, discovering this purpose by examining the context of the statute as 
a whole, its legislative history, the scheme of earlier or parallel statutes, or 
some loose mixture of social and political history.

     Although courts rarely 
express concern that there is nothing very systematic or even coherent about 
these principles of statutory analysis, hard cases demonstrate how quickly the 
principles collapse. Even if modern analytic philosophy permits us to speak 
coherently of the formal meaning of words, it takes only the slightest semantic 
dexterity to find particular words ambiguous or vague in context. Even if logic 
permits us to speak sensibly of the intent of a large and diffuse group of 
legislators, as a practical matter the search for legislative intent is often 
hopeless.

Professor Weisberg 
additionally writes:

     Even judges who 
recognize the theoretical possibility of plain meaning concede that it must 
yield where it produces an absurd result. The uncertain boundaries of absurdity 
counsel against ever finding language "plain," and the impossibility of a formal 
definition of absurdity casts doubt on even the logical possibility of any 
formal plain meaning.

Id. at 214 n. 8.

[¶67.]  In purposeful conclusion, defining a 
reasonable construction, Attletweedt, 684 P.2d 812, and constituting a "logical 
inference of the legislative intent," State v. Stovall, 648 P.2d 543, 545 
(Wyo. 1982), I 
specially concur.

FOOTNOTES

1 There are three generic 
dispositive principles, somewhat sarcastically phrased (and slightly restated), 
for a legislator's understanding of debate which may promote equal relevance (or 
irreverence) within the specialty of determining intent from the resulting 
product:

a. To understand what you 
communicate, I do not care what you say - I want to know why. When I know why, 
then I learn what. (Your benefit rule.)

b. I want to know what 
you intend to do to my constituents. (Detriment rule.)

c. Disregarding this 
flood of words, what is in it for my constituents. (Greed rule.)

2 Webster's Ninth New 
Collegiate Dictionary 77 (1986) defines "ambiguous" as "doubtful or uncertain 
esp. from obscurity or indistinctness * * * inexplicable * * * capable of being 
understood in two or more possible senses or ways." "Inconsistent" is quite 
differently defined as "not compatible with another fact or claim * * * 
containing incompatible elements * * * incoherent or illogical in thought or 
actions * * * not satisfiable by the same set of values for the unknowns." 
Id. at 
610.

3 This court in State v. 
Sodergren, 686 P.2d 521, 525 n. 6 (Wyo. 1984) 
in quotation from a case note on the earlier case of Thomas v. State, 562 P.2d 1287 (Wyo. 
1977) related:

"* * * Determining the 
specific legislative intent behind a particular law is somewhat akin to 
searching for the Loch Ness monster; submerged, lurking beneath the surface of 
the statute, the intent might be there - but then again, probably not. * * *" 
Case Notes, 13 Land & Water L.Rev. 595, 601 (1978).

4 The history of 
difficulty with the notion of legislative intent is not of current vintage. See 
Radin, Statutory Interpretation, 43 Harv.L.Rev. 863 (1930). See also Bruncken, 
Interpretation of the Written Law, 25 Yale L.J. 129 (1915); Kocourek, An 
Introduction to the Science of Law 201 (1930); and T. Sedgwick, The 
Interpretation and Construction of Statutory and Constitutional Law 327-28 (2d 
ed. 1874), as cited by MacCallum, supra, 75 Yale L.J. at 754 n. 1. The 
countervailing argument is presented likewise in Landis, A Note on "Statutory 
Interpretation", 43 Harv.L.Rev. 886 (1930). The 1930 writings are the source of 
what is called the Radin/Landis dispute. Innumerable authors followed, taking 
variant views, most of which attributed the intent as intended purpose. See 
MacCallum, supra, 75 Yale L.J. at 754.

5 The full rule stated in 
Stauffer Chemical Co., 778 P.2d  at 1093 is:

     We agree with Stauffer 
that this statute does not specifically mention a requirement that the 
limitation of liability be conspicuous. * * * We conclude that the appropriate 
rule is that a limitation of liability statement, like a disclaimer of an 
implied warranty, must be conspicuous in order to become a basis for the 
bargain. * * *

     Our rules for 
statutory construction lead us to this result. One of those rules is that an 
absurd result, whenever apparent, is to be avoided. * * * We also followed the 
rule that the legislature is presumed to intend to adopt legislation that is 
reasonable and logical and does not intend to adopt statutes that are futile. * 
* * The presumption in statutory construction is that the legislature does not 
intend to adopt statutes that are futile. * * * We also invoke the concept, as 
we reiterated it in Gerstell [v. State of Wyoming, ex rel. Department of Revenue 
and Taxation], 769 P.2d [389] at 394 [(Wyo. 1989)], that "statutes that relate 
to the same subject matter should be harmonized wherever that is possible." * * 
* The application of these rules makes it evident that the legislature, in this 
instance, intended an implicit requirement that a limitation of liability be 
conspicuous, similar to that expressed in § 34-21-233(b), be engrafted upon the 
provisions of § 34-21-298.

6 Chief Justice John 
Marshall said in McCulloch v. State of Maryland, 17 U.S. (4 Wheat) 316, 414-15, 4 L. Ed. 579 (1819):

Such is the character of 
human language, that no word conveys to the mind, in all situations, one single 
definite idea; and nothing is more common than to use words in a figurative 
sense. Almost all compositions contain words, which, taken in * * * their 
rigorous sense, would convey a meaning different from that which is obviously 
intended. It is essential to just construction, that many words which import 
something excessive, should be understood in a more mitigated sense - in that 
sense which common usage justifies. * * * This word, then, like others, is used 
in various senses; and, in its construction, the subject, the context, the 
intention of the person using them, are all to be taken into view.

7 The bill title 
states:

AN ACT to amend W.S. 
39-6-402(a)(iii) and 39-6-502(a)(ii) relating to the sales and use tax; 
modifying the definition of "sale" to exclude an exchange or transfer made 
between certain business entities or in the course of formation or dissolution 
of certain business entities; and providing for an effective date.

Wyo. Sess. Laws. ch. 166 
(1987).