Title: Stagner v. Wyoming State Tax Com'n

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Stagner v. Wyoming State Tax Com'n1984 WY 51682 P.2d 326Case Number: 83-186Decided: 05/22/1984CLYDE F. STAGNER, D/B/A WEST ROUTE TRADING COMPANY, APPELLANT (PETITIONER),

v.

WYOMING STATE TAX COMMISSION AND STATE BOARD OF EQUALIZATION, APPELLEES (RESPONDENTS).

Supreme Court of Wyoming

CLYDE F. STAGNER, D/B/A WEST ROUTE 
TRADING COMPANY, APPELLANT (PETITIONER),

v.

WYOMING STATE TAX COMMISSION AND STATE 
BOARD OF EQUALIZATION, APPELLEES (RESPONDENTS).

Appeal from the District 
Court, LaramieCounty, Joseph F. Maier, 
J.

Carol Herman, 
Wind River Legal Services, Inc., FortWashakie, for appellant.

A.G. McClintock, 
Atty. Gen., and Ron Arnold, Asst. Atty. Gen. (argued), for appellees.

Before ROONEY, C.J., and THOMAS, ROSE, BROWN and 
CARDINE, JJ. 

CARDINE, 
Justice.

[¶1.]     This appeal is from an 
order denying relief sought in a declaratory judgment action involving 
construction of the Wyoming cigarette tax statutes. The parties 
stipulated to the relevant facts. The court held against appellant on all 
issues.

[¶2.]     We will 
affirm.

[¶3.]     Appellant, Clyde 
Stagner is an enrolled member of the Shoshone tribe of Indians of the Wind River 
Indian Reservation. He owns and operates the West Route Trading Company located 
on the reservation. A substantial part of his business involves the sale of 
cigarettes to enrolled Indians, non-enrolled Indians, and non-Indians. He is not 
licensed, nor is he required to be licensed by the State of Wyoming to sell 
cigarettes since he is a member of the Shoshone tribe.

[¶4.]     On March 15, 1981, the 
Wyoming State Tax Commission and State Board of Equalization, seized and sold 
twelve cases of cigarettes enroute to Mr. Stagner. This seizure was an agency 
action subject to judicial review; however, the request for review was not 
timely and therefore was dismissed. On June 9, 1982, the Wyoming State Tax 
Commission and State Board of Equalization seized thirteen cases of cigarettes 
enroute to Mr. Stagner. Appellant filed a declaratory judgment suit seeking a 
ruling that the statutes under which this action was taken by the State of 
Wyoming were 
unconstitutional. Then, pursuant to stipulation of the parties, appellant paid 
the tax on the cigarettes seized on June 9, 1982, and the State Board released 
the cigarettes to him.

[¶5.]     Although appellant 
presents several issues on this appeal, there are just two issues which we must 
decide in resolving the case:

1. Does the statute 
impose the Wyoming cigarette tax upon the seller or upon 
the retail purchaser or consumer of the cigarettes?

2. Was the seizure of 
petitioners' cigarettes by the State legally justified under the facts of this 
case?

I

[¶6.]     The United States 
Supreme Court recently clarified the law concerning state taxation on cigarette 
sales made on Indian reservations in Moe 
v. Confederated Salish and Kootenai Tribes of Flathead Reservation, 425 U.S. 463, 96 S. Ct. 1634, 48 L. Ed. 2d 96 (1976). The Court again said that an Indian 
vendor cannot be required to obtain a state license and that a cigarette sales 
tax cannot be imposed upon on-reservations sales by Indians to Indians. It held, 
however, that the State can lawfully impose a cigarette tax on sales by Indians 
to non-Indians. The Montana statute in question provided that the 
cigarette tax was a direct tax on the retail consumer, precollected for purposes 
of convenience and facility only. The Court in a policy discussion 
stated:

"* * * Since nonpayment 
of the tax is a misdemeanor as to the retail purchaser, the competitive 
advantage which the Indian seller doing business on tribal land enjoys over all 
other cigarette retailers, within and without the reservation, is dependent on 
the extent to which the non-Indian purchaser is willing to flout his legal 
obligation to pay the tax. Without the simple expedient of having the retailer 
collect the sales tax from non-Indian purchasers, it is clear that wholesale 
violations of the law by the latter class will go virtually unchecked." 
(Footnote and emphasis omitted.) 96 S. Ct.  at 1645.

And continuing 
also stated:

"The State's requirement 
that the Indian tribal seller collect a tax validly imposed on non-Indians is a 
minimal burden designed to avoid the likelihood that in its absence non-Indians 
purchasing from the tribal seller will avoid payment of a concededly lawful tax. 
Since this burden is not, strictly speaking, a tax at all, it is not governed by 
the language of Mescalero [Apache Tribe 
v. Jones, 411 U.S. 145, 93 S. Ct. 1267, 36 L. Ed. 2d 114 (1973)], dealing with the `special area of state taxation.' We see nothing 
in this burden which frustrates tribal self-government, see Williams v. Lee, 358 U.S. 217, 219-220, 
79 S. Ct. 269, 270, 3 L. Ed. 2d 251, 253 (1959), or runs afoul of any congressional 
enactment dealing with the affairs of reservation Indians, United States v. McGowan, 302 U.S. 535, 
539, 58 S. Ct. 286, 288, 82 L. Ed. 410, 413 (1938): `Enactments of the federal 
government passed to protect and guard its Indian wards only affect the 
operation, within the colony, of such state laws as conflict with the federal 
enactments.' See also Thomas v. Gay, 
169 U.S. 264, 273, 18 S. Ct. 340, 343, 42 L. Ed. 740, 744 (1898). We therefore agree with the District Court that to the 
extent that the `smoke shops' sell to those upon whom the State has validly 
imposed a sales or excise tax with respect to the article sold, the State may 
require the Indian proprietor simply to add the tax to the sales price and 
thereby aid the State's collection and enforcement thereof." 96 S. Ct.  at 
1646.

[¶7.]     In Washington v. Confederated Tribes of 
Colville Indian Reservation, 447 U.S. 134, 100 S. Ct. 2069, 65 L. Ed. 2d 10 
(1980), the United States Supreme Court in resolving other questions relating to 
state taxation of cigarette sales reaffirmed the holding of Moe v. Confederated Salish and Kootenai 
Tribes of Flathead Reservation, supra, stating:

"Moe establishes several 
principles relevant to the present cases. The State may sometimes impose a 
nondiscriminatory tax on non-Indian customers of Indian retailers doing business 
on the reservation. Such a tax may be valid even if it seriously disadvantages 
or eliminates the Indian retailer's business with non-Indians. And the State may 
impose at least `minimal' burdens on the Indian retailer to aid in enforcing and 
collecting the tax. * * *" (Footnote omitted.) 100 S. Ct.  at 
2080.

The Court held 
in Washington v. Confederated Tribes of 
Colville Indian Reservation, supra, that the exemption applicable to tribal 
members could not be extended to Indians who are non-members of the tribe. 
Washington's 
cigarette sales tax falls upon the first event which may constitutionally be 
subjected to it. The incident of the tax is on the seller in cases of sales by 
non-Indians to non-Indians. In a case where the retailer is exempt from the tax, 
the first taxable event is the use, consumption of or possession by a non-exempt 
purchaser.

[¶8.]     The decisions in both 
United States Supreme Court cases were based on the fact that the applicable 
statutes provided for the incident of the tax to fall on the consumer. Both 
parties in this case agree that the State of Wyoming may not impose the tax upon appellant 
nor require him to obtain a state license for the sale of cigarettes. They also 
agree that sales by appellant to enrolled Indians of the Shoshone and Arapahoe 
tribes are exempt. Appellant contends that Wyoming's cigarette sales tax statutes provide 
that the incident of the tax is upon the wholesaler; that, therefore, as an 
enrolled Indian, he is exempt from this tax and it should not be enforced 
against him. The State contends that the Wyoming legislature imposed the tax upon the 
sale thereby placing the incidence of the tax upon the purchaser. Section 
39-6-103, W.S. 1977, Cum.Supp. 1983, provides:

"(a) There is levied and 
shall be collected and paid to the board an excise tax of four-tenths of a cent 
($.004) upon the sale of each cigarette sold by 
wholesalers.

"(b) Sales of cigarettes 
to any agency of the United 
States government, sales in interstate commerce 
or the taxation of any transaction prohibited by the United States Constitution 
are exempted from the provisions of this article but shall be reported to the 
board in the manner prescribed by it.

"(d) There is levied and 
shall be paid to the board an excise tax of forty one hundredths of a cent 
($.0040) upon the use or storage by consumers of cigarettes in Wyoming but only 
if the tax imposed by subsections (a) and (b) of this section has not been 
paid." (There is no subsection (c) in this section as it appears in the printed 
acts.)

 

[¶9.]     In 1977 the legislature 
revised the cigarette tax sales statutes. Prior to that time § 39-163, W.S. 
1957, Cum.Supp. 1975, provided that:

"(a) There is hereby 
levied and shall be collected and paid to the state board of equalization an 
excise tax upon the sale of cigarettes by wholesalers of four mills on each 
cigarette; provided, however, that 
the burden of paying such tax shall be passed, through subsequent sales of the 
cigarettes taxed, to the ultimate purchasers and consumers of such cigarettes 
and such tax so passed shall be deemed a direct tax paid by the said ultimate 
purchasers and consumers." (Emphasis added.)

[¶10.]  Appellant argues that the deletion of the 
proviso evidences legislative intent to shift the incidence of the tax from the 
consumer to the seller. We cannot agree with this proposition. The deletion 
could equally indicate a legislative determination that the proviso was 
unnecessary.

"* * * [I]t is a 
well-established principle that in construing a legislative enactment we must, 
if possible, ascertain the intent of the legislature from the wording of the 
statute. * * *" Wyoming State Department 
of Education v. Barber, Wyo., 649 P.2d 681, 684 
(1982).

"All portions of the act 
must be read in pari materia, and every word, clause and sentence of it must be 
given effect * *." Haddenham v. 
City of Laramie, Wyo., 
648 P.2d 551, 553 (1982).

"A basic tenet of our 
judicial system is that a statute must be read in light of its purpose. If a 
statute is clear on its face and the results produced by a literal reading help 
bring about the stated objective, we will not entertain strained constructions 
which impede the legislative policy. * * *" (Citation omitted.) People v. Platte Pipe Line Company, 
Wyo., 649 P.2d 208, 212 (1982).

The words must 
be given their plain and ordinary meaning. Herring v. Welltech, Inc., Wyo., 660 P.2d 361 
(1983). That meaning becomes obvious when applied to the facts in this 
case.

[¶11.]  Section 39-6-101, W.S. 1977, definitions, 
provides:

"(a) As used in this 
article:

"(i) `Sale' * * * means any * * 
* transfer of * * * possession within the state * * *;

* * * * * 
*

"(iii) Wholesaler means 
any person who:

"(A) Imports cigarettes 
into this state for sale * * *."

Appellant 
imported cigarettes into this state for sale and he was a wholesaler. He transferred possession of 
the cigarettes to non-Indians and that was a sale. Section 39-6-103, W.S. 1977, 
supra, provides that "there * * * shall be collected * * * four-tenths of a cent 
($.004) upon the sale of each 
cigarette sold by wholesalers." 
(Emphasis added.) It would be a strained construction of the statute for us to 
conclude that the legislature intended that the wholesaler collect the tax from himself upon the 
sale to a purchaser. We decline to adopt that construction. "Collect" is said to 
mean "to receive, gather, or exact from a number of persons or other sources," 
Webster's Third International Dictionary (1961). The plain meaning of the term 
"collect" is to obtain something from another. Here the legislative intent is 
clear. The appellant was to "collect" the tax from the purchaser. The words 
"shall be collected * * * upon the sale" places the incident of the tax upon the 
purchaser.

[¶12.]  Subsection (b) of § 39-6-103, supra, 
provides that taxes are not to be collected on sales to a tax exempt agency. 
Appellant, though a wholesaler by definition, was tax exempt under this 
subsection. The tax by statute could not be imposed upon him, and this provision 
is further evidence of the legislative intent that the tax was upon the 
consumer. Every word, clause and sentence must be given meaning. A statute must 
be construed so that no part is inoperative or superfluous. Thomson v. Wyoming In-Stream Flow Committee, Wyo., 651 P.2d 778 
(1982).

[¶13.]  Appellant claims that his analysis of the 
cigarette sales tax statutes is supported by the fact that the statutes are 
couched in terms of "wholesalers" not consumers. However, the 1977 revision is 
not significantly different from the 1957 act and amendments. The 1967 amendment 
specifically provided that the consumer would pay the tax. That article was also 
primarily couched in terms of wholesalers. The wholesaler receives a six percent 
discount because of the burden imposed upon him in affixing the stamps. It would 
be senseless for the legislature to give a discount to a person owing taxes for 
paying taxes that he owes. This discount evidences the fact that the tax was not 
upon the wholesaler but upon the purchasers and consumers. We note also that no 
distribution of the revenues are made pursuant to § 39-6-108, W.S. 1977, until a 
monthly return is filed which shows sales. This indicates also a legislative 
intent to impose the tax upon the consumer.

[¶14.]  Appellant contends that subsection (d) 
supports his position that the wholesaler is obligated to pay the tax. We 
construe this section as obligating the consumer personally to pay the tax if he 
has not complied with subsection (a) which requires payment of the tax to the 
wholesaler.

[¶15.]  Therefore, we hold that the cigarette 
sales tax statutes require appellant to collect tax on cigarettes sold to 
non-Indians and to Indians who are not enrolled members of the Shoshone or 
Arapahoe tribes.

II

[¶16.]  The State Board on two occasions seized 
cigarettes purchased by and enroute to appellant. Section 39-6-106(a), W.S. 
1977, provides for seizure of cigarettes under certain circumstances.1 Appellant contends that this 
statute is unconstitutional in that it improperly distinguishes between licensed 
and unlicensed wholesalers; it violates the due process clauses of the federal 
and state constitutions; and it did not authorize the seizure of appellant's 
cigarettes.

[¶17.]  Appellant contends that the statute is 
unconstitutional because it does not provide for a notice or hearing. The record 
in this case confirms that appellant was notified of the seizure and that the 
cigarettes were returned to him the day after the seizure pending the outcome of 
this suit. A court is without jurisdiction to determine that a statute is 
irreconcilable with the constitution except

"* * * `as it is called 
upon to adjudge the legal rights of litigants in actual controversies. In the 
exercise of that jurisdiction, it is bound by two rules, to which it has rigidly 
adhered: one, never to anticipate a question of constitutional law in advance of 
the necessity of deciding it; the other, never to formulate a rule of 
constitutional law broader than is required by the precise facts to which it is 
to be applied.' [Citation.] Kindred to these rules is the rule that one to whom 
application of a statute is constitutional will not be heard to attack the 
statute on the ground that impliedly it might also be taken as applying to other 
persons or other situations in which its application might be unconstitutional. 
* * *" United States v. Raines, 362 U.S. 17, 80 S. Ct. 519, 522, 4 L. Ed. 2d 524 (1960).

[¶18.]  The United States Supreme Court held, in 
Warth v. Seldin, 422 U.S. 490, 95 S. Ct. 2197, 2205, 45 L. Ed. 2d 343 (1975), that

"* * * [a]s an aspect of 
justiciability, the standing question is whether the plaintiff has `alleged such 
a personal stake in the outcome of the controversy' as to warrant his invocation 
of federal-court jurisdiction and to justify exercise of the court's remedial 
powers on his behalf. The Art. III judicial power exists only to redress or 
otherwise to protect against injury to the complaining party, even though the 
court's judgment may benefit others collaterally. A federal court's jurisdiction 
therefore can be invoked only when the plaintiff himself has suffered `some 
threatened or actual injury resulting from the putatively illegal action * * 
*.'" (Citations omitted.)

In Alberts v. State, Wyo., 642 P.2d 447 
(1982), appellant claimed that a statute was unconstitutional on its face 
because it did not set forth proper procedures and guidelines. We held that 
appellant did not have standing to raise those issues 
because

"* * * [t]he 
constitutionality of a statute may not be attacked by one whose rights are not 
adversely affected by the operation thereof. * * *" Id. at 
452.

In that case, 
the procedures appellant was protesting were not applied against him. The 
constitutionality of a statute can only be challenged if it is applied to or is 
about to be applied to the party contesting its validity. Walgreen Co. v. State Board of 
Equalization, 70 Wyo. 193, 246 P.2d 767 (1952). We have stated 
that the rule with regard to standing is one that

"* * * with the 
limited exception of challenges to statutes that broadly prohibit speech 
protected by the First Amendment, a party must demonstrate the matter in which 
his own rights are adversely affected in light of the circumstances before the 
court in order to present his constitutional challenge." Armijo v. State, Wyo., 678 P.2d 864, 868 
(1984).

In this case, 
appellant was notified of the seizure and was given an opportunity for a 
hearing. Therefore, he does not have standing to contend that the statute is 
unconstitutional for lack of procedural due process because the alleged 
inadequacies of the statute were not applied to him; we will not decide the 
constitutionality of the statute as it might be applied to third parties or to 
hypothetical situations.

[¶19.]  Appellant also contended that the seizure 
was wrongful and not authorized under § 39-6-106, W.S. 1977, supra. The statute 
provides that cigarettes found in this state without stamps required by law may 
be seized. Two exemptions from this provision are granted. First, the section 
does not apply to cigarettes in the original unopened shipping package in 
possession of or in transit to a licensed wholesaler. Appellant is not a 
licensed wholesaler and not exempt under this language of the statute. He claims 
the statute discriminates against him because he is an enrolled Indian who is 
not required to be licensed and, therefore, it is unconstitutional. However, 
appellant's cigarettes were not seized because he was unlicensed, but because he 
was evading the cigarette tax. Seizure is not a necessary sanction for licensed 
wholesalers. Other remedies are available, such as license revocation, fines, 
and imprisonment.2 By virtue of appellant's status as 
an Indian, he is exempt from licensing and its attendant burdens. However, he is 
not exempt from a lawful compliance with the state taxing statutes. The statute 
is not discriminatory because it provides different sanctions in different 
circumstances for failure to comply. There is no discrimination against 
appellant by the seizure to enforce the lawful exercise of tax collection. This 
was a lesser sanction than would have been imposed upon a licensed wholesaler 
who was willfully and intentionally evading the tax.

[¶20.]  A second exemption is granted to owners 
of cigarettes not willfully or intentionally evading the tax. This exemption was 
not available to appellant who had known for several years that the State of 
Wyoming 
contended that he was obligated to collect the tax when he sold cigarettes to 
non-Indian consumers. The State's interest in resolving this question 
necessitated the seizure. The United States Supreme Court held in Washington v. Confederated Tribes of 
Colville Indian Reservation, supra, 100 S. Ct.  at 2085, 
that

"* * * [a]lthough the 
cigarettes in transit are as yet exempt from state taxation, they are not immune 
from seizure when the Tribes, as here, have refused to fulfill collection and 
remittance obligations which the State has validly imposed. * * 
*"

Having found the 
tax is upon the purchaser or consumer, that the statutes providing for the tax 
are constitutional, and that the seizure was lawful, the order of the district 
court is

[¶21.]  Affirmed.

FOOTNOTES

1 Section 39-6-106, W.S. 
1977, provides in part:

"(a) Any package of 
cigarettes found in this state without stamps, imprints or impressions affixed 
thereto as provided by this article are contraband goods and may be seized 
without a warrant by the board or any peace officer of this state when so 
directed by the board. This section does not apply to cigarettes in the original 
unopened shipping package in the possession of or in transit to a licensed 
wholesaler or to owners of cigarettes not willfully or intentionally evading the 
tax imposed by this article."

2 Section 39-6-102(c), 
W.S. 1977, provides:

"(c) The board may revoke 
the license of any wholesaler violating any provision of this article after a 
hearing. No license shall be issued to a wholesaler for two (2) years following 
revocation of his license."

Section 
39-6-110, W.S. 1977, provides:

"(a) The following acts 
are misdemeanors punishable by a fine of not more than one hundred dollars 
($100.00) or imprisonment in the county jail for not more than six (6) months or 
both:

"(i) Selling or 
distributing cigarettes as a wholesaler without a license;

"(ii) Selling, offering 
to sell, displaying for sale or possessing with intent to sell cigarettes 
without proper stamps, imprints or impressions;

"(iii) Evading or aiding 
or abetting any person to evade the payment of the taxes imposed by this 
article;

"(iv) Making any false or 
fraudulent return.

"(b) Each act in 
violation of subsection (a) of this section is a separate 
offense.

"(c) The penalties 
specified in this section are in addition to the provisions of W.S. 
39-6-106."