Case Title: Wyoming Dept. of Revenue v. Calhoun

Citation: 

Docket Number: 98-21

State: wyoming

Court: Wyoming Supreme Court

Date: 1999-05-26T00:00:00Z

Document:
Wyoming Dept. of Revenue v. Calhoun1999 WY 72981 P.2d 480Case Number: 98-21, 98-22Decided: 05/26/1999Supreme Court of Wyoming
 
WYOMING DEPARTMENT OF REVENUE, Appellant (Petitioner),

v.

MELVIN C. CALHOUN, 
Appellee (Respondent).

WYOMING DEPARTMENT OF 
REVENUE, Appellant (Petitioner),

v.

MELVIN C. CALHOUN, 
Appellee (Respondent).

 

Certifications from the 
District Courts of Fremont County and Laramie County The Honorable D. Terry 
Rogers, Judge and Edward L. Grant, Judge.

William U. Hill, 
Attorney General; Vicci M. Colgan, Senior Assistant Attorney General; and Linda 
M. Kolpitcke, Assistant Attorney General, Cheyenne, Wyoming. Representing 
Appellant.

John C. 
Schumacher, Sara R. Robinson and Valerie Hafner Thomas of the Law Office of John 
Schumacher, Fort Washakie, Wyoming. Representing 
Appellee.

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

* Retired November 2, 
1998.

TAYLOR, Justice, 
Retired.

[¶1]      The Wyoming 
Department of Revenue appeals the order of the Wyoming State Board of 
Equalization (the Board) awarding Melvin C. Calhoun a refund of the use tax he 
paid when registering his new pickup truck in 1993. Finding that Calhoun was a 
Native American resident of the Wind River Indian Reservation, and that the use 
of the vehicle was primarily on the reservation, the Board concluded that 
federal law prohibited the Department of Revenue's assessment of the use tax. 
The Board's findings of basic fact are unsupported by substantial evidence, and, 
therefore, we reverse.

I. 
ISSUES

[¶2]      As appellant, the 
Wyoming Department of Revenue (the Department) presents the following issues for 
review:

I. Whether the 
Board's finding that Appellee Calhoun was entitled to a use tax refund is 
supported by substantial evidence.

II. Whether the 
Wyoming State Board of Equalization's holding that tribal members who reside on 
the Wind River Reservation are never subject to Wyoming sales or use tax is 
arbitrary, capricious, an abuse of discretion or otherwise not in accordance 
with law.

Appellee, Melvin 
C. Calhoun (Calhoun), phrases the issues as follows:

I. Whether the 
State of Wyoming has authority to tax an out-of-state purchase of a motor 
vehicle to an enrolled Tribal member who resides on the Wind River Reservation 
and uses the vehicle for on-reservation activities.

II. Whether 
refund of an illegal tax is barred by any statute of 
limitations.

II. 
FACTS

[¶3]      In April 1993, 
Calhoun bought a new pickup truck in Salt Lake City, Utah. In May, Calhoun 
registered the truck in Fremont County, Wyoming. Since Calhoun had no 
documentation that he had paid sales tax in Utah, he was assessed the $656.67 
use tax authorized by Wyo. Stat. Ann. § 39-6-504 (Michie Repl. 1994). On the 
registration form, Calhoun stated his address was a post office box in 
Crowheart, Wyoming.

[¶4]      In October 1995, 
Calhoun sent the Department a request for a refund of the tax. The Department 
refused, notifying Calhoun that a refund was precluded because more than 
eighteen months had passed since payment of the tax. Calhoun then wrote a letter 
to the Board contesting the Department's decision. The letter provided the same 
post office box listed on the registration form, and included a telephone number 
in the Crowheart exchange, as well as a tribal identification number. The full 
text of the letter is as follows:

I'm writing this 
letter of appeals for the folling [sic] reasons.

1. When the 
court rulled [sic] that tribal members don't have to pay county tax it should 
have included sales tax also.

2. The court 
ruled that tribal members do not have to pay sales tax so it should be 
retroactive to coinside [sic] with not paying county tax.

3. I never 
erroneously paid the sales tax. I paid under protest.

4. I feel that I 
should get back the $656.67 sales tax since it should never [have been] 
collected.

(Emphasis in 
original.)

[¶5]      Although Calhoun 
was directed to file a brief with the Board by December 9, 1996, no brief was 
forthcoming. Instead, on December 16, 1996, Calhoun sent a letter to the 
Department which stated that he was "an enrolled Indian living on the Wind River 
Reservation" and should, therefore, be entitled to have the tax refunded. The 
Department forwarded the letter to the Board, and filed a timely response 
brief.

[¶6]      On October 15, 
1997, the Board issued its order, which found as fact that "Petitioner is an 
enrolled member of the Eastern Shoshone Indian Tribe * * * residing on the Wind 
River Indian Reservation in the Crowheart, Wyoming area." The Board also 
included material factual findings in its legal 
conclusions:

Based on the 
many United States Supreme Court decisions we conclude neither the State of 
Wyoming, nor any [of] its political subdivisions, have the authority to levy a 
motor vehicle tax on a vehicle owned by an enrolled tribal member residing on 
the Wind River Reservation where the vehicle is primarily housed on reservation 
lands.

(Emphasis 
added.) The Board concluded:

Petitioner has, 
by the facts presented in his letter of appeal dated November 20, 1995, 
presented a preponderance of evidence to show this sales/use tax was illegally 
assessed and should not have been collected. The evidence overwhelmingly 
indicates it was an illegal tax collection. Petitioner has thus met the burden 
of persuasion required by Board rules.

The Board's 
order directed the Department to refund the tax payment. The Department then 
filed a petition for review with two district courts, both of which certified 
the matter pursuant to W. R. A. P. 12.09(b).

III. STANDARD OF 
REVIEW

[¶7]      General appellate 
standards used by a reviewing court of the first instance are applicable to 
cases certified to us pursuant to W. R. A. P. 12.09. U S West Communications, 
Inc. v. Wyoming Public Service Com'n, 958 P.2d 376, 380 (Wyo. 1998). The scope 
of review is defined in Wyo. Stat. Ann. § 16-3-114(c) (Michie 
1997):

(c) To the 
extent necessary to make a decision and when presented, the reviewing court 
shall decide all relevant questions of law, interpret constitutional and 
statutory provisions, and determine the meaning or applicability of the terms of 
an agency action. In making the following determinations, the court shall review 
the whole record or those parts of it cited by a party and due account shall be 
taken of the rule of prejudicial error. The reviewing court 
shall:

(i) Compel 
agency action unlawfully withheld or unreasonably delayed; 
and

(ii) Hold 
unlawful and set aside agency action, findings and conclusions found to 
be:

* * 
*

(E) Unsupported 
by substantial evidence in a case reviewed on the record of an agency hearing 
provided by statute.

[¶8]      The party 
challenging the sufficiency of the evidence has the burden of demonstrating that 
the agency's decision is not supported by substantial evidence. Laramie County 
Bd. of Equalization v. Wyoming State Bd. of Equalization, 915 P.2d 1184, 1188 
(Wyo. 1996) (quoting Butts v. Wyoming State Board of Architects, 911 P.2d 1062, 
1065 (Wyo. 1996)). We examine the entire record to determine if there is 
substantial evidence to support an agency's findings. If the agency's decision 
is supported by substantial evidence, we cannot properly substitute our judgment 
for that of the agency, and must uphold the findings on appeal. Substantial 
evidence is relevant evidence which a reasonable mind might accept in support of 
the conclusions of the agency. It is more than a scintilla of evidence. Laramie 
County Bd. of Equalization, 915 P.2d  at 1189 (quoting State ex rel. Wyoming 
Workers' Compensation Div. v. White, 837 P.2d 1095, 1098 (Wyo. 1992) and Trout 
v. Wyoming Oil & Gas Conservation Com'n, 721 P.2d 1047, 1050 (Wyo. 
1986)).

IV. 
DISCUSSION

[¶9]      The Department 
argues that the Board relied on irrelevant facts and on facts not in the record 
to conclude that Calhoun was entitled to a tax refund. We must agree. Wyo. Stat. 
Ann. § 39-6-504 states, in relevant part:

(a) Except as 
otherwise provided, there is levied and shall be paid by the purchaser an excise 
tax of three percent (3%) upon sales in Wyoming. * * *

(b) Persons 
storing, using or consuming tangible personal property are liable for the tax 
imposed by this article. * * *

(c) Tangible 
personal property sold by any person for delivery in this state is deemed sold 
for storage, use or consumption herein and is subject to the tax imposed by this 
article * * *.

The legislature 
intended that the use tax be complimentary to the sales tax. Exxon Corp. v. 
Wyoming State Bd. of Equalization, 783 P.2d 685, 688 (Wyo. 1989), cert. denied 
495 U.S. 910 (1990). The purpose of the statute is to put property bought 
outside the state, for which no sales tax has been paid, on an equal footing 
with property purchased within the state that is subject to tax. 
Id.

[¶10]   Whether tangible personal property 
is intended for "delivery in this state" is encompassed by the term "first use." 
"For purposes of the use tax, a first use by the new purchaser occurring in 
Wyoming creates the taxable event." Barcon, Inc. v. Wyoming State Bd. of 
Equalization, 845 P.2d 373, 382 (Wyo. 1992). Thus, the pivotal question is where 
the first use occurs. Burlington Northern R. Co. v. Wyoming State Bd. of 
Equalization, 820 P.2d 993, 995 (Wyo. 1991).1 The Department asserts that no 
evidence was presented which would establish that Calhoun's first use of the 
truck was not in Wyoming so as to make it not subject to the 
tax.

[¶11]   The Board, on the other hand, 
relied on Wyo. Stat. Ann. § 39-6-505 (Michie Cum. Supp. 1995), which provides in 
relevant part:

(a) The 
following purchases or leases are exempt from the excise tax imposed by this 
article:

(i) For the 
purpose of exempting sales of services and tangible personal property which are 
protected by the United States constitution and the Wyoming constitution, the 
following are exempt:

(A) Purchases 
which the state of Wyoming is prohibited from taxing under the laws or 
constitutions of the United States or Wyoming.

The Board 
determined that federal law precluded the assessment of the use tax upon Calhoun 
because he was an enrolled member of the Eastern Shoshone Indian Tribe living on 
the Wind River Indian Reservation, and that the pickup truck in question was 
used primarily on the reservation. The primary use of the truck in 1995, 
however, does not address the "first use" of the property in 1993. 

[¶12]   The use tax is a one-time event. 
The fact that Calhoun stated he was an enrolled tribal member residing on the 
Wind River Indian Reservation in 1995 is not probative of his residence in 1993, 
or the location of the first use of the pickup truck. "Absent express federal 
law to the contrary, Indians going beyond reservation boundaries have generally 
been held subject to nondiscriminatory state law otherwise applicable to all 
citizens of the State." Mescalero Apache Tribe v. Jones, 411 U.S. 145, 148-49, 
93 S. Ct. 1267, 1270-71, 36 L. Ed. 2d 114 (1973). Therefore, a state may have 
authority to tax or regulate activities occurring within the state, but outside 
Indian country. Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc., 523 U.S. 751, 118 S. Ct. 1700, 1703, 140 L. Ed. 2d 981 (1998). Thus, if the vehicle was 
"delivered to," or "first used" outside Indian country within the State of 
Wyoming, there is no federal barrier to the imposition of the 
tax.

[¶13]   The Board's determination appears 
to be based on the dual inferences that Calhoun's Crowheart post office box 
number proved Calhoun resided on the Wind River Indian Reservation, and that his 
residence on the reservation established the place of first use.2 We need not reach the second tier 
of the Board's assumptions, because Calhoun failed to establish his 1993 place 
of residence.

[¶14]   A number of courts have held that a 
post office box number alone does not provide evidence of a person's residence. 
As the California Court of Appeals recently noted when considering the 
sufficiency of a post office box on a petition for ballot:

A post office 
box, unlike a residence address, provides no indication as to the actual 
physical location of a person's residence. A person may move to a new residence 
(and no longer be eligible to vote) but keep the same post office box. With only 
a post office box on the petition, the petition signer has made no statement 
regarding the physical location of his or her residence. The petition does not 
show (and the Registrar has no way of knowing) whether the signer was a 
qualified registered voter at the time of signing.

Mapstead v. 
Anchundo, 63 Cal. App. 4th 246, 73 Cal. Rptr. 2d 602, 610-11 (1998) (emphasis in 
original and footnote omitted); see also Coale v. Grady Bros. Siding and 
Remodeling, Inc., 865 S.W.2d 887, 888 (Mo. App. 1993) (fact that place where 
siding was to be installed was listed as post office box in another county did 
not compel finding that work was done on structure in another county); and 
McCauley v. Com., Pennsylvania Bd. of Probation and Parole, 98 Pa. Cmwlth. 28, 
510 A.2d 877, 880 (1986) (post office box is simply a mailing address, not a 
residence). While there may be an exception to this rule when it is shown that 
the post office box is the only address assigned to a residence, Calhoun made no 
such showing here. McClellan v. Meyer, 900 P.2d 24, 33 (Colo. 
1995).

[¶15]   Persuaded by the reasoning of these 
courts, we hold that a post office box, without more, does not show residence 
for the purpose of establishing the propriety of a tax exemption. Further, there 
is nothing in the record which addresses Calhoun's use of the vehicle in any 
manner. Thus, the facts used by the Board to support its legal assumptions have 
no bearing on the exemption claimed by Calhoun. The Board could not have known 
where Calhoun resided or where this vehicle was first used in 1993. We know only 
that Calhoun wished to register this truck in Fremont County after its purchase, 
and that no sales tax was paid in Utah.

[¶16]   Since we find insufficient evidence 
to uphold the Board's determinations, we decline to address the legal 
conclusions inherently and expressly contained in the Board's decision. Calhoun 
had his chance to show his entitlement to an exception from the use tax assessed 
in 1993, and he failed to do so.

V. 
CONCLUSION

[¶17]   The Board's determination that 
federal law precluded the assessment of a use tax on Calhoun's pickup truck 
purchased in Utah in 1993 is unsupported by the record. The Board's order is 
reversed, and the case is remanded for disposition in accord with this 
opinion.

Footnotes

1 The Department rules, in 
effect at the time Calhoun first registered the pickup, 
stated:

Section 3. 
Transactions Subject to Tax. The purchase or lease of all tangible personal 
property outside this state for first use, storage or consumption within this 
state, is subject to use tax, providing the same transaction would be subject to 
sales tax if the transaction had occurred wholly within the State of 
Wyoming.

* * 
*

Section 8. Place 
of First Use. When tangible personal property is purchased in another state and 
is brought into Wyoming for use, the burden is upon the purchaser to show that 
there was a bona fide first use of the property outside the State of 
Wyoming.

Wyoming 
Department of Revenue Rules, ch. IV (1991).

2 Although the Board 
stated that the letter of appeal provided Calhoun's residence, we note that 
Calhoun never stated that his 1995 residence was the same as his 1993 residence. 
However, because the post office box number on the application for registration 
was the same as the post office box number on the letter of appeal, we will 
address the sufficiency of the post office box number 
here.