Title: EASTERN LARAMIE COUNTY SOLID WASTE DISPOSAL DISTRICT v. STATE BOARD OF EQUALIZATION

State: wyoming

Issuer: Wyoming Supreme Court

Document:

EASTERN LARAMIE COUNTY SOLID WASTE DISPOSAL DISTRICT v. STATE BOARD OF EQUALIZATION2000 WY 1609 P.3d 268Case Number: 99-228Decided: 08/01/2000Supreme Court of Wyoming
 
EASTERN LARAMIE COUNTY 
SOLID WASTE DISPOSAL DISTRICT, Appellant (Petitioner),v. STATE BOARD OF EQUALIZATION and Department of Revenue, 
State of Wyoming, Appellees (Respondents).

Appeal from the Supreme 
Court, Golden, J.

Representing 
Appellant: Peter H. Froelicher, 
Laramie County Attorney, Cheyenne, Wyoming.Representing Appellee: Gay 
Woodhouse, Wyoming Attorney General; Rowena Heckert, Deputy Attorney General; 
Michael Dinnerstein, Assistant Attorney General. Argument by Mr. 
Dinnerstein.

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

* Retired June 2, 
2000.

GOLDEN, 
Justice.

[¶1] Appellant 
Eastern Laramie County Solid Waste Disposal District (District) seeks review of 
an order issued by Appellee State Board of Equalization (Board) upholding a 
decision of Appellee Department of Revenue (Department), which determined that 
the District was not exempt from taxes on sales of services and tangible 
personal property sold to the District because it was not a "political 
subdivision" as contemplated by the governing statute. We will reverse, holding 
that the governing statute unambiguously contemplates that the District is a 
part of "government" and is a "political subdivision" for purposes of that 
statute.

ISSUES

[¶2] The 
District poses these issues:

I. Are the State Board of 
Equalization's and the State Department of Revenue's decisions, concluding that 
Appellant is not exempt from sales tax pursuant to W.S. § 39-15-105 (a)(iv), 
arbitrary, capricious, or not in accordance with law?

II. Does the public 
policy against taxing governmental entities support Petitioner's [District's] 
position?

III. Does [sic] the State 
Board of Equalization's and the State Department of Revenue's interpretations of 
W.S. § 39-15-105 (a)(iv) violate the constitutional guarantees of equal 
protection?

[¶3] In 
response, the Board and the Department offer these issues:

1. Does the political 
subdivision exemption from the sales and use tax exempt subdivisions that are 
not political such as solid waste disposal districts?

2. Does the Wyoming 
Constitution prohibit taxing solid waste disposal districts given that the law 
permits such districts to charge fees [for] their 
services?

3. Does constitutional 
law require that solid waste disposal districts be accorded the same treatment 
under the tax statutes as weed and pest control districts given that solid waste 
disposal districts address different concerns than weed and pest control 
districts?

FACTS

[¶4] On June 10, 
1997, the District contacted the Department to confirm the tax exempt status it 
had enjoyed for at least the preceding seven years. By letter dated October 15, 
1997, the Department informed the District that it was not an exempt entity 
under Wyoming sales/use tax law, applying the following 
reasoning:

[¶5] According 
to Wyoming law, in order to be considered a political subdivision an entity must 
have the following characteristics:

(1) A geographic area 
smaller than the state of Wyoming;

(2) A governmental 
function with a local purpose;

(3) Officers elected by 
the district's inhabitants; and,

(4) Provisions for 
assessment of taxes to finance purposes.

[¶6] 
Witzenberger [Witzenburger] v. Wyoming Community Development Authority, 575 P.2d 1100, 1113 (Wyo. 1978).

[¶7] According 
to Wyoming law, the governing board of solid waste disposal district[s] consists 
of residents of the district appointed by the county commissioners. W.S. 
18-11-102. As such, it is the Department's opinion that your organization does 
not meet criterion number (3) described above. Consequently, Eastern Laramie 
County Solid Waste Disposal District is not a political subdivision for purposes 
of sales/use tax.

[¶8] By notice 
filed on November 13, 1997, the District appealed the Department's decision to 
the Board. For purposes of brevity, although the Board's order is lengthy, we 
will merely note that the Board affirmed the Department's determination that the 
District was not exempt on the same basis as that quoted above from the 
Department's letter to the District. The District then filed a petition for 
review pursuant to W.R.A.P. 12.09 in the district court, and the district court 
certified the matter here for review.1

DISCUSSION

Standard of 
Review

[¶9] The right 
of judicial review of an administrative decision is statutory. Basin Elec. Power 
Co-op., Inc. v. Dep't of Revenue, 970 P.2d 841, 847 (Wyo. 1998). When a case is 
certified to this Court pursuant to W.R.A.P. 12.09, we examine the decision of 
the administrative agency as if we were the reviewing court of the first 
instance. The authority vested in a reviewing court is set forth in Wyo. Stat. 
Ann. § 16-3-114 (c)(ii) as follows:

(ii) [The reviewing court 
may] [h]old unlawful and set aside agency action, findings and conclusions found 
to be:

(A) Arbitrary, 
capricious, an abuse of discretion or otherwise not in accordance with 
law;

(B) Contrary to 
constitutional right, power, privilege or immunity;

(C) In excess of 
statutory jurisdiction, authority or limitations or lacking statutory 
right;

(D) Without observance of 
procedure required by law; or

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

[¶10] Montana 
Dakota Utilities Co. v. Public Service Comm'n of Wyoming, 847 P.2d 978, 983 
(Wyo. 1993); Ahlenius v. Wyoming Bd. of Professional Geologists, 2 P.3d 1058, 
1060 (Wyo. 2000).

[¶11] As its 
first issue, the District contends that Wyo. Stat. Ann. § 39-15-105 (a)(iv)(A) 
(LEXIS 1999) 2 creates an exemption for 
it:

(iv) For the purpose of 
exempting sales of services and tangible personal property sold to government, 
charitable and nonprofit organizations, irrigation districts and weed and pest 
control districts, the following are exempt:

(A) Sales to the state of 
Wyoming or its political subdivisions;

[¶12] The issues 
raised by the District require us to interpret the language of that statute. As 
we stated in Olheiser v. State ex ret. Wyoming Workers' Compensation Div., 866 P.2d 768, 770 (Wyo. 1994):

[¶13] We have 
interpreted statutes on innumerable occasions, so our standard is well 
established. First, we determine if the statute is ambiguous by looking at the 
plain and ordinary meaning of the words contained therein. Parker Land and 
Cattle Co. v. Wyo. Game & Fish Comm'n 845 P.2d 1040, 1042-43 (Wyo. 
1993).

A "statute is unambiguous 
if its wording is such that reasonable persons are able to agree as to its 
meaning with consistence and predictability. * * * [A] statute is ambiguous only 
if it is found to be vague or uncertain and subject to varying interpretations. 
* * * [W]hether an ambiguity exists in a statute is a matter of law to be 
determined by the court." Parker Land and Cattle Co. at 1043 (quoting Allied 
Signal, Inc. v. Wyo. State Rd. of Equalization 813 P.2d 214, 219-20 (Wyo. 
1991)).

Island Richards 
v. Board of County Commissioners, 6 P.3d 1251 at 1252 (Wyo. 
2000).

[¶14] The 
essence of the District's argument is that both the Department and the Board 
have incorrectly construed the statute by relying solely and very strictly upon 
the definition of "political subdivision" as set out in Witzenburger v. State ex 
rel. Wyo. Community Dev. Authority, 575 P.2d 1100 (Wyo. 1978). We do not read 
Witzenburger to require an entity to have all four of the "distinctive badges of 
a political subdivision," id. at 1113, in order to qualify as a political 
subdivision. A computer-aided search of the Wyoming Constitution and statutes 
reveals that the phrase "political subdivision" is used hundreds of times in 
dozens of contexts. Although it is somewhat contrary to the arguments presented 
by the parties, our conclusion will be founded in simplicity and directness. In 
construing a taxing or revenue statute, courts should attempt to ascertain and 
give effect to the intention of the legislature, and that intention is to be 
gathered from a consideration of every word in the statute so as to make it 
harmonious and reasonable in its operation. State v. Union Pacific Railroad Co., 
823 P.2d 539, 541 (Wyo. 1992). As a general rule, tax exemptions are given a 
strict interpretation against an assertion of a taxpayer and in favor of the 
taxing power. 3A Sutherland Stat. Const. § 66.09, at 42 (5th ed. 1992). However, 
the reasons for that rule do not apply in the instance of tax exemptions running 
to the benefit of the government itself or its agencies. Id. at 43. In such a 
case, the practical effect of an exemption is merely to reduce the amount of 
money that has to be handled by government in the course of its operations. Id. 
For these reasons, provisions granting exemptions to government agencies may be 
construed liberally in favor of such agencies. Id.

[¶15] The 
statute, in question announces a comprehensive purpose to exempt "government" 
from payment of sales taxes, including the state itself and its political 
subdivisions. There is no more fundamental political subdivision than that of 
the county. Solid waste disposal districts are created by elected boards of 
county commissioners, though the boards do assign the day-to-day management 
tasks to appointed governing boards for those districts. Wyo. Stat. Ann. §§ 
18-11-101, 102 (LEXIS 1999). We conclude that the exemption contemplated by § 
39-15-105(a)(iv)(A) clearly includes solid waste disposal 
districts.

[¶16] The 
Department contends that such a construction is flawed because § 39-15- 105 
(a)(iv) specifically makes reference to irrigation districts and weed and pest 
control districts, but does not include solid waste disposal districts. With 
respect to irrigation districts, which were added to the exemption statute in 
1997, it is clear that such districts are not a creature of the county and, 
hence, likely not a part of "government" or a "political subdivision," even 
under a liberal construction of the exemption statute. Irrigation districts are 
statutorily authorized associations of private landowners designed to facilitate 
improvement of the existing water supply for the lands covered by such a 
district. Wyo. Stat. Ann. §§ 41-7-201-210 (LEXIS 1999); 1997 Wyo. Sess. Laws Ch. 
54, § 1. Weed and pest control districts were added to the statute in 1998. 1998 
Wyo. Sess. Laws Ch. 43, § 1. Weed and pest districts are also creatures of 
counties and their addition to the exemption statute is a redundancy in that 
they are also political subdivisions in light of the construction we have 
adopted. See Wyo. Stat. Ann. § 11-5-104 (LEXIS 1999). Our research does indicate 
that a 1976 Opinion of the Attorney General determined that sales transactions 
of weed and pest districts were not exempt on the basis that they were political 
subdivisions because political subdivisions fell within the meaning of the word 
person subject to tax under the statutes relevant at that time. Op. Wyo. Att'y. 
Gen. 76-01 (1976). This is likely the source of that amendment to the exemption 
statute, but in any event it is our conclusion that weed and pest districts 
would also qualify for an exemption as a political subdivision of 
government.

[¶17] The 
Department also maintains that a determination that a solid waste disposal 
district is a political subdivision under the exemption statute is foreclosed 
because a bill to add solid waste disposal districts to the exemption statute, 
offered in the 1999 Legislature, failed passage. The amendment introduced in 
1999 would have provided enhanced clarity, but its failure of passage does not 
cause the existing language in the statute to be 
ambiguous.

[¶18] Having 
determined that the District is a political subdivision of government under the 
exemption statute, we need not address the other issues raised in the briefs. 
The order of the Board is reversed, and this matter is remanded to the district 
court with directions that it be returned to the Board with further directions 
that the order appealed herein be vacated, and an order be entered by the Board 
determining that the District is tax exempt under § 39-15-105 
(a)(iv)(A).

FOOTNOTES

1 On October 
4, 1999, this Court dismissed this appeal for want of prosecution. Upon a 
petition for reinstatement filed by Appellant, this Court reinstated the appeal 
pursuant to a grant of a writ of review on October 26, 
1999.

2 At the time 
of the proceedings before the Board this statute was codified at Wyo. Stat Ann. 
§ 39- 6-405 (a)(iv)(A) (Michie 1997). For purposes of our discussion, the 1999 
version of the statute is essentially the same and includes a 1998 amendment 
that figures in the Department's argument.