Title: Rock Springs Ford Nissan v. State Bd. of Equalization, Wyoming Dept. of Revenue

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Rock Springs Ford Nissan v. State Bd. of Equalization, Wyoming Dept. of Revenue1995 WY 22890 P.2d 1100Case Number: 94-87Decided: 02/27/1995Supreme Court of Wyoming

ROCK 
SPRINGS FORD NISSAN, Appellant (Petitioner),

v.

STATE BOARD OF EQUALIZATION, WYOMING DEPARTMENT OF 
REVENUE; Albert Vesco, in his official capacity as Sweetwater County Clerk; and 
Robb Slaughter in his official capacity as Sweetwater County Treasurer, 
Appellees (Defendants).

 

Appeal 
from District Court, Sweetwater County, Jere Ryckman, 
J.

James R. Belcher and 
Lawrence J. Wolfe of Holland & Hart, Cheyenne, representing 
appellant.

Joseph B. Meyer, Atty. Gen., 
Michael L. Hubbard, and Vicci M. Colgan, Sr. Asst. Attys. Gen., for State Bd. of Equalization and 
Gayle R. Stewart, Civil Deputy, Sweetwater County and Pros. Atty., for Sweetwater County Clerk and 
Treasurer.

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

LEHMAN, 
Justice.

[¶1]      Rock Springs Ford 
Nissan (Ford Nissan) appeals from a ruling by the Wyoming State Board of 
Equalization (Board) finding Ford Nissan liable for sales tax due on a vehicle 
which is unpaid by a defaulting buyer when the dealership subsequently 
repossesses the vehicle and seeks to obtain the title from the county 
clerk.

[¶2]      We 
affirm.

[¶3]      Ford Nissan 
raises two issues:

1. Did the Board of Equalization err in ruling that 
Rock Springs Ford Nissan, a duly licensed automobile dealer, is liable for sales 
tax the purchaser failed to pay?

2. Did the Board of Equalization err in ruling that 
the acquisition of a title to a repossessed vehicle by Rock Springs Ford Nissan, 
a duly licensed automobile dealer, constitutes a taxable event giving rise to 
imposition of sales tax, and in imposing sales tax for which there is no 
evidence of sales price?

The Board states the issues 
as:

1. Whether Rock Springs Ford Nissan is liable for 
sales tax under W.S. 39-6-410(a) as a party to the 
transaction.

2. Whether Rock Springs Ford Nissan is liable for 
sales tax under W.S. 39-6-402(a)(iii)(J) and W.S. 
39-6-407(a).

BACKGROUND

[¶4]      In Wyoming, sales 
taxes are usually collected by the vendor at the time of the transaction and 
later remitted by the vendor to the state. W.S. 39-6-407(a) (1994). An exception 
to this procedure, however, has been created for vendors of motor vehicles. W.S. 
39-6-406(a) (1994). In that situation, the sales tax is collected by the county 
treasurer prior to the first registration of the vehicle in Wyoming. Id. The 
dispute in this case centers around who is liable for the sales tax when the 
purchaser of a vehicle fails to pay the tax.

[¶5]      Ford Nissan 
sought to obtain from the county clerk title to a vehicle which had been 
repossessed. The purchaser had never registered the vehicle, thus the sales tax 
had never been paid. The county clerk refused to release the title until the tax 
was paid. Ford Nissan paid the tax and appealed to the Department of Revenue for 
a refund. The Department denied the appeal, and Ford Nissan appealed to the 
Board.

[¶6]      The Board ruled 
that Ford Nissan was liable for the tax. The Board found liability on two 
alternative grounds: 

10. * * * Although W.S. 39-6-406(a) prohibits a 
vendor from collecting sales tax upon sale of a motor vehicle, specifically 
providing the taxes are to be collected by the county treasurer prior to first 
registration in Wyoming, such prohibition applies only to the "collectibility" 
of sales tax, not the liability therefor. Under W.S. 39-6-410(a), it is clear 
any tax due is a debt from the "persons who are the parties to the transaction," 
which in this situation, is Petitioner [Ford Nissan] and [the purchaser]. It is 
of particular interest to note this statutory provision discusses "persons" and 
"parties," not vendor/purchaser, the language used when the "collectibility" of 
sales tax is discussed. We believe this distinction is intentional, and while 
recognizing W.S. 39-1-406(a) exempts an automobile dealer from the requirement 
of sales tax collection upon sale, the same does not exempt the dealer from the 
liability established by W.S. 39-6-410(a).

11. Having concluded an automobile dealer is liable 
for unpaid sales tax under W.S. 39-6-410(a), the final issue concerns whether 
unpaid sales tax can be collected when a dealer makes application for a 
repossession title pursuant to W.S. 31-2-104(c). Although 104(c) is silent as to 
sales tax, assistance can be found in Title 39, particularly 39-6-402, wherein 
"sale" is defined for purposes of sales tax liability. Pursuant to W.S. 
39-6-402(a)(iii)(J), a sale is any transfer of title or possession for 
consideration, excluding an exchange or transfer of tangible personal property 
upon which the seller has directly, or indirectly, paid sales tax incidental to 
repossession. The statute thus by definition exempts an exchange or transfer of 
personal property in repossession if "the seller has directly, or indirectly 
paid sales or use tax." In the particular factual situation herein, the sales 
tax due on the underlying transfer has not "directly, or indirectly" been paid 
by the seller, or any other party. Thus by definition, the sales tax on the 
underlying transaction not having been paid, and the seller thus neither 
directly nor indirectly having paid sales tax incident to repossession, the 
acquisition of a repossession title as a transfer of title is considered "a 
sale," and sales tax is due and owing.

Ford Nissan disagreed with 
the Board's decision, and this appeal is now before us.

STANDARD OF 
REVIEW

[¶7]      We review rulings 
of the Board under the standards established by W.S. 16-3-114 (1990). Enron Oil 
& Gas Co. v. Fruedenthal, 861 P.2d 1090, 1092 (Wyo. 1993). We will affirm 
the agency's decision if it is supported by substantial evidence, is not 
arbitrary and capricious, and is in accordance with law. W.S. 16-3-114(c)(ii)(A) 
& (E); State Bd. of Equalization v. City of Lander, 882 P.2d 844, 847 (Wyo. 
1994).

DISCUSSION

[¶8]      The resolution of 
this case hinges upon the interplay of two statutes: W.S. 39-6-406(a) (1994) and 
W.S. 39-6-410(a) (1994). The first statute, W.S. 39-6-406(a), prohibits vendors 
of motor vehicles from collecting the sales tax:

[N]o vendor shall collect taxes imposed by this 
article upon the sale of motor vehicles, house trailers, trailer coaches, 
trailers or semitrailers. The taxes imposed shall be collected by the county 
treasurer prior to the first registration in Wyoming and not upon subsequent 
registration by the same applicant[,]

while W.S. 39-6-410(a) 
concerns liability for the tax:

Any tax due under this article constitutes a debt to 
the state from the persons who are parties to the transaction and is a lien from 
the date the tax is due on all the real and personal property of those 
persons.

[¶9]      Ford Nissan 
argues that it is sheltered from liability for the tax because it is barred from 
collecting the tax. Ford Nissan supports its argument by asserting that the 
Department, by imposing liability on the motor vehicle vendor, has departed from 
a long-standing interpretation of the pertinent statutes and that the 
legislative history of the Sales Tax Code supports its position. Ford Nissan 
claims that the general statute, § 410(a) which creates liability for sales tax, 
cannot override the more specific statute, § 406(a) prohibiting them from 
collecting the tax, especially since the latter predates the enactment of § 
410(a).

[¶10]   When confronted with the 
interpretation of a statute, we focus on the intent of the legislature as 
expressed in the statute, using the ordinary and obvious meaning of the words 
contained therein. In Interest of MFB, 860 P.2d 1140, 1145 (Wyo. 1993). We will 
go outside the plain language of a statute and resort to general principles of 
statutory construction to ascertain legislative intent only if the statute is 
subject to different meanings. Amrein v. State, 836 P.2d 862, 864 (Wyo. 1992). 
Statutes are interpreted so that each word, clause and sentence is given meaning 
and no part is rendered inoperative or superfluous. Hamlin v. Transcon Lines, 
701 P.2d 1139, 1142 (Wyo. 1985).

[¶11]   The problem with Ford Nissan's 
approach is that it ignores the intent of the legislature as unambiguously 
stated in the two statutes. Reading the statutes as suggested by Ford Nissan 
would effectively nullify the language of § 410(a); we would be reading an 
exception into the language "constitutes a debt to the state from the persons 
who are parties to the transaction and is a lien" when none exists in the 
statute. Section 406(a) simply sets out an alternative procedure for collection 
of the sales tax on the sale of certain types of vehicles. It does not mention, 
let alone eliminate, the liability of all parties to a transaction for the sales 
tax as set out in § 410(a). Whether the agency has now changed a long-standing 
practice is irrelevant. The agency is legally required to enforce the sales tax 
statutes as they have been drafted by the legislature. Cook v. Wyoming Oil & 
Gas Conservation Comm'n, 880 P.2d 583, 585 (Wyo. 1994).

[¶12]   Nor are we persuaded by Ford 
Nissan's argument that a specific statute controls over a more general one. 
While in certain situations that may be so, it is not here for the simple reason 
that the two statutes speak to different subjects. See L.U. Sheep Co. v. Bd. of 
County Comm'rs, 790 P.2d 663, 674 (Wyo. 1990). One, § 406(a), concerns who is 
responsible for collecting sales tax on the sale of certain types of vehicles, 
while the other, § 410(a), concerns who is indebted to the state for the tax 
when a sale is made. Certainly both statutes relate to sales tax, but they are 
interested in different aspects - collectibility and liability. They are not the 
same thing, notwithstanding Ford Nissan's valiant efforts to the 
contrary.

[¶13]   The rule that a specific statute 
controls over a general statute on the same subject is only a rule of statutory 
interpretation used to discern legislative intent. L.U. Sheep Co., 790 P.2d  at 
674. We find nothing in the statutes which suggests that the legislature 
intended to exempt motor vehicle vendors from the sales tax liability found in 
W.S. 39-6-410(a). Ford Nissan's argument that the legislature must have so 
intended since § 410(a) was enacted after § 406(a) is unpersuasive. The 
legislative history can easily be read to stand for the opposite of Ford 
Nissan's position. The fact that there is not an explicit exemption from sales 
tax liability in § 410(a) or any other statute while, conversely, there is an 
explicit exemption for the requirement to collect taxes in § 406(a) implies that 
the legislature did not intend to excuse motor vehicle vendors from the 
liability provisions of § 410(a). In any event, we have found the statute 
unambiguous; and the language of § 410(a) creates a debt to the state from a 
motor vehicle vendor when the purchaser fails to pay the required sales 
tax.

[¶14]   We also agree with the Board on its 
finding of liability for the unpaid tax based on W.S. 39-6-402(a)(iii)(J), which 
provides:

(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:

*           
*           
*           
*           
*           
*

(J) 
The repossession of personal property by a chattel mortgage holder or 
foreclosure by             
a lienholder.

It is undisputed that the 
sales tax on the truck sold by Ford Nissan had never been paid when repossession 
occurred here. There can be no doubt that a repossession is considered by the 
legislature as a sale, otherwise there would not have been a need to create § 
402(a)(iii)(J) and to state that when the seller has paid the sales tax, 
directly or indirectly, then the repossession is not a sale. If a repossession 
were not a sale, then § 402(a)(iii)(J) would be superfluous. The Board correctly 
found that Ford Nissan was also liable for the sales tax under this 
statute.

CONCLUSION

[¶15]   Ford Nissan is liable for the 
unpaid sales tax under the authority of W.S. 39-6-410(a) and 
39-6-402(a)(iii)(J). Therefore, the Board did not act arbitrarily, capriciously 
or not in accordance with law, and its decision is 
affirmed.