Title: Meridian Aggregates Co. v. Wyoming State Bd. of Equalization

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Meridian Aggregates Co. v. Wyoming State Bd. of Equalization1992 WY 27827 P.2d 375Case Number: 91-158Decided: 03/04/1992Supreme Court of Wyoming
MERIDIAN AGGREGATES 
COMPANY, 

Appellant 
(Petitioner),

v.

WYOMING STATE BOARD OF 
EQUALIZATION, 

Appellee 
(Respondent).

Appeal from District 
Court, Laramie County.

Lawrence J. 
Wolfe and Matthew H. Thomas, Holland & Hart, Cheyenne, for 
appellant.

Joseph B. Meyer, 
Atty. Gen., Sylvia L. Hackl, Deputy Atty. Gen., Michael L. Hubbard, Sr. Asst. 
Atty. Gen., Mary L. Scheible, Asst. Atty. Gen., for 
appellee.

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

THOMAS, 
Justice.

[¶1]      The only question 
in this case is whether an amendment to the statute that provides for the filing 
of claims for refunds of sales taxes, which reduced the time for filing such 
claims from three years to one year, would bar a claim that had been accrued for 
less than three years, but more than one year, at the effective date of the 
amendment. The Wyoming Department of Revenue denied the claim for refund on the 
ground that it was not filed within one year after the claim accrued. Meridian 
Aggregates Company (Meridian) appealed that ruling to the Wyoming State Board of 
Equalization (Board), which issued a ruling affirming the Department of Revenue. 
After appeal to the District Court, the case was certified to this court in 
accordance with W.R.A.P. 12.09. We hold that Meridian had one year after the 
effective date of the amendment to the claims filing statute to file its claim 
for refund so long as it was filed within the three-year period. The decision of 
the Board is reversed and, since the claim was not barred, the case is remanded 
for further proceedings in the Department of Revenue.

[¶2]      According to the 
brief of Meridian, the issue is:

Whether the 1989 
Amendment to Wyo. Stat. § 39-6-410(c), which reduced the period for filing sales 
tax refund claims from three years to one year, should be applied retroactively 
to bar claims which arose before the amendment.

The Board in its 
brief said that the issue is:

Whether the establishment 
of a statutory remedy allowing the refund of taxes creates a vested right in 
taxpayer.

[¶3]      Meridian is 
contesting the determination by the Board that a 1989 amendment to Wyo. Stat. § 
39-6-410(c) (1988), reducing the period for filing a sales tax refund claim from 
three years to one year, should be applied so as to bar its refund claim which 
had accrued before the effective date of the amendment. The claim had accrued 
more than a year before the effective date of the amendment. The position of the 
Board is that a taxpayer has no vested right to claim a refund because any 
refund of taxes is solely an act of legislative grace, which may be extinguished 
at any time. By a letter dated December 29, 1989, Meridian sought a refund of 
$63,137.33 in sales taxes that it had paid on sales of its product to the Union 
Pacific Railroad Company. As it turned out, Union Pacific already had paid the 
required sales tax for those purchases directly to the Department of Revenue. 
The result was a duplication of payment of the tax. The payments by Meridian 
which duplicated the payments of the Union Pacific Railroad Company were made to 
the Department of Revenue in mid-1988. Under the statute then in effect, 
Meridian could have made a claim for refund later than it was actually 
submitted. The Department of Revenue denied the refund application of Meridian 
on the ground that it had not been submitted within one year of the overpayment. 
The statute in effect at the time Meridian made the overpayment provided, in 
pertinent part:

(c) Any license fee, tax 
assessment, penalty or interest which has been erroneously paid, collected or 
computed shall be credited against any subsequent tax liability of the vendor or 
may be refunded. No credit or refund shall be allowed after three (3) years from 
the date of overpayment. Any refund or credit erroneously made or allowed may be 
recovered in an action brought by the attorney general in any court of competent 
jurisdiction.

Wyo. Stat. § 
39-6-410(c) (1988).

Subsequently, in 
1989, the statute was amended with an effective date of February 22, 1989. As 
amended, the statute reads:

(c) Any license fee, tax 
assessment, penalty or interest which has been erroneously paid, collected or 
computed shall be credited against any subsequent tax liability of the vendor or 
may be refunded. No credit or refund shall be allowed after one (1) year from 
the date of overpayment. The receipt of a claim for a refund by the department 
shall toll the statute of limitations. All refund requests received by the 
department shall be approved or denied within ninety (90) days of receipt. Any 
refund or credit erroneously made or allowed may be recovered in an action 
brought by the attorney general in any court of competent 
jurisdiction.

Wyo. Stat. § 
39-6-410(c) (1989).

The three-year 
limitation on claims for refund had been in effect since 1937 at the time the 
foregoing amendment was adopted. It appears obvious that the legislature 
intended to provide for a more expeditious handling of claims for refund of 
sales taxes.

[¶4]      At the inception 
of our discussion, we recognize that the Board relies heavily upon the 
acknowledgment by this court of the rule that tax credit or refund statutes are 
a matter of legislative grace. Matter of Black, 775 P.2d 484 (Wyo. 1989); 
Atlantic Richfield Co. v. Board of County Commissioners, Sweetwater County, 569 P.2d 1267 (Wyo. 1977). We have not had occasion to invoke this rule with respect 
to an actual controversy, although we do not seriously doubt that it is sound. 
The natural progression of the rule is: If tax refund statutes are a matter of 
grace, then they may be repealed by the legislature without concerns for 
apparently vested rights. See Southern Service Company Limited v. Los Angeles 
County, 15 Cal. 2d 1, 97 P.2d 963 (1940); People ex rel. Eitel v. Lindheimer, 371 Ill. 367, 21 N.E.2d 318, 124 A.L.R. 1472 (1939). The dates of these decisions 
make it evident that they were decided during the Great Depression, and it is 
not difficult to understand the social, political, and legal milieu which 
surrounded them.

[¶5]      However sound the 
rule may be that credit or refund statutes may be repealed by the legislature 
without concern for apparently vested rights, this case does not involve 
a repeal of the right. Instead, this case involves an amendment to the statute 
that reduces the period within which claims for refund may be presented, and 
that is a significant difference. We have held, as a general rule, that tax 
statutes will be construed to operate prospectively only if there is a doubt as 
to whether the statute was intended to have retrospective application. Belco 
Petroleum Corporation v. State Board of Equalization, 587 P.2d 204 (Wyo. 1978). 
It is doubtful this statutory amendment was intended to apply retrospectively, 
although Section 2 of the amendment states: "This act does not apply to any 
claim for a refund received by the department before the effective date of this 
act." 1989 Wyo. Sess. Laws ch. 96. The amendment was effective on February 22, 
1989. 1989 Wyo. Sess. Laws ch. 96, Section 3. The amendment was accomplished by 
passage of House Bill 201, which was introduced in the legislature on January 
11, 1989 and passed the house on January 27, 1989. 1989 Digest of Senate and 
House Journal, p. 310.

[¶6]      If we were to 
accept the construction imposed in this case by the decision of the Board, we 
would be agreeing with the enactment of painfully obvious inequities. Prior to 
the introduction of House Bill 201, Wyoming taxpayers properly could rely upon 
the three-year limitation period in the existing statute for filing claims for 
tax refund. Had the legislature repealed the right to claim a refund, all 
taxpayers would have been treated alike. In this instance, however, the 
application of the statute, as it is construed by the Board, would have the 
effect of requiring taxpayers who had pending claims for refund that were more 
than a year old to proceed on what the law might become, rather than on the 
existing state of the law. To assume that taxpayers were required to file refund 
claims in that very short span of time between the introduction of the bill and 
its effective date on the assumption that it would pass, be signed into law, and 
become effective on that date, is to impose a requirement on citizens that they 
must follow the legislature's most esoteric operations and then act in the 
manner that they perceive will be required. We are satisfied that the law only 
requires citizens to know the status of the law, not what it might become in the 
future. See Gaudina v. Haberman, 644 P.2d 159 (Wyo. 1982). One of the earliest 
opinions of this court addressed a related subject in this way: 

The effect of 
retrospective remedies is inevitably to disturb the interests of involuntary and 
innocent parties, and to create general distrust of legislation. Hence, it is 
the violent presumption of the court, that whatever language a legislature may 
use in a remedial statute, it intends for the statute only a future operation, 
and the presumption will yield only when it is impossible to avoid a 
retrospective operation. The courts uniformly agree in this principle, and 
whatever differences they may exhibit in its application, must be attributed to 
the purpose of adhering to, not of the departing from, the principle. When the 
new statute was passed there were doubtless numerous judgments of the district 
courts of the territory as to which the first year from their rendition expired 
on December 15, 1877, or was so nearly expired on that day as to leave no 
opportunity for an appeal, provided the right of appeal was limited to a year 
from the rendition of the judgment. This construction bars the right of appeal 
upon these judgments, and turns the statute into simply capricious and 
oppressive legislation. Such mischief sufficiently illustrates the necessity and 
virtue of the principle above stated, and the duty of the courts rigidly to 
adhere to it. We see no reason for withholding the application of the principle 
from the present case.

Lee v. Cook, 1 
Wyo. 413, 418-419 (1878).

This court then 
held that the new statute, allowing one year for an appeal, would apply only to 
cases that arose after the effective date of the amendment, and the old statute, 
allowing three years for an appeal, would apply to causes that preceded it. Lee. 
It is indeed possible that this should be the rule in this 
case.

[¶7]      In National 
Tailoring Co. v. Scott, 65 Wyo. 64, 196 P.2d 387 (1948), we held that a statute, 
which amended a limitation period, may be treated as retrospective so long as 
the law allows a reasonable time to enforce a remedy that was available under 
the preceding law. In that case, we held that the ninety-day period between 
passage of the amendment and its effective date was not a reasonable time. We 
also iterated the principle that this court will not construe a statute in a 
manner so as to make it unconstitutional if that construction can be avoided. 
National. If we were to adopt the Board's construction of the statute in this 
case, we would be required to hold that the amendment is unconstitutional for, 
at a minimum, it would violate Wyo. Const. Art. 1, § 6; Art. 1, § 8; and Art. 1, 
§ 34, as well as Wyo. Stat. § 8-1-107 (1989).

[¶8]      Instead, we hold 
that the amendment to subsection (c) of § 39-6-410 must be construed to have a 
retrospective effect only to the extent that any claim for credit or refund must 
be filed within one year of the effective date of the amendment so long as it is 
not barred by the provisions of the prior statute. This construction provides a 
reasonable time for any taxpayer to exercise the pre-existing remedy, and it 
avoids imposition of a construction that would render the statute 
unconstitutional. National; 2 Norman J. Singer, Sutherland, Statutes and 
Statutory Construction § 41.09 nn. 13, 14 (Sands 4th ed. 1986 rev.). Under this 
holding, Meridian's claim for refund was filed within the time prescribed by 
law.

[¶9]      The decision of 
the Board is reversed, and this case is remanded to the Board for additional 
proceedings consistent with the opinion of the court.