Title: United Pacific Ins. Co. v. Wyoming Excise Tax Div., Dept. of Revenue and Taxation

State: wyoming

Issuer: Wyoming Supreme Court

Document:

United Pacific Ins. Co. v. Wyoming Excise Tax Div., Dept. of Revenue and Taxation1986 WY 19713 P.2d 217Case Number: 85-15Decided: 01/24/1986Supreme Court of Wyoming
UNITED PACIFIC INSURANCE 
CO., APPELLANT (DEFENDANT), 

 
 
v. 

 
 

WYOMING EXCISE TAX DIVISION, 
DEPARTMENT OF REVENUE AND TAXATION, APPELLEE (PLAINTIFF).

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

 
 
 
 
Representing 
Appellant:

James L. Applegate and 
Glenn Parker of Hirst & Applegate, Cheyenne.

 
 
Representing 
Appellee:

A.G. McClintock, Atty. 
Gen., Peter J. Mulvaney, Deputy Atty. Gen., Michael L. Hubbard, Sr. Asst. Atty. 
Gen., Robert J. Walters, Asst. Atty. Gen., Cheyenne.

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

* Justice Rose circulated 
the opinion of the Court October 31, 1985, and retired November 1, 
1985.

 
 
** Retired November 30, 
1985.

 
 

ROSE, 
Justice.

 
 

[¶1.]     The trial court entered 
judgment for unpaid Wyoming sales and use taxes 
against the surety of a nonresident prime contractor performing work in 
YellowstoneNational Park under a contract with the 
United 
States government. We will 
affirm.

 
 

[¶2.]     Bernal Construction 
Company (Bernal), a nonresident prime contractor, was awarded a contract to 
build a water system in YellowstoneNational 
Park. Appellant United Pacific Insurance Company 
(United Pacific) agreed to become Bernal's surety on Miller Act bonds (40 U.S.C. 
§ 270a).1 The Wyoming Excise Tax Division 
determined that Bernal was obligated to pay some $53,360.38 in state sales and 
use taxes (pursuant to §§ 39-6-6022 and 39-6-603, W.S. 1977, 1984 
Cum.Supp.3) and proceeded, in state district 
court, against United Pacific to recover the tax under § 39-6-604(a), W.S. 1977, 
1984 Cum.Supp.4 United Pacific moved to dismiss the 
complaint on grounds that the district court lacked subject-matter jurisdiction 
and that the complaint failed to state a claim upon which relief could be 
granted. The motion to dismiss was denied and the case proceeded to a bench 
trial, where the trial court entered judgment against United Pacific for 
$53,360.38.

 
 

[¶3.]     Appellant raises these 
issues for decision:

 
 
"A. The Trial Court 
lacked jurisdiction over the subject matter of the action.

 
 
"B. Plaintiff failed to 
plead and prove entitlement to relief.

 
 
"C. A surety on a bond, 
executed under the provisions of the Miller Act (40 U.S.C. § 270a-e) relating to 
the United States Government contract for improvements in Yellowstone National 
Park is not liable for Wyoming sales or use tax, unless the bond so 
provides.

 
 
"D. The Trial Court's 
imposition of statutory, non-contract liability on Defendant was contrary to 
W.S. 1977 § 39-6-405[(a)](x) Cum.Sup.;[5] and to the intention of Congress, 
as expressed in the Miller Act, an interference with the Federal Government 
welfare and activity, constituting a violation of Article VI Section 2 of the 
Constitution of the United States,[6] and therefore 
void."

 
 

Appellee State of Wyoming phrases the issues for decision in 
this way:

 
 
"I. DID THE DISTRICT 
COURT EXERCISE PROPER SUBJECT MATTER JURISDICTION OF THE 
ACTION?"

 
 
"II. DID APPELLEE 
SUFFICIENTLY PLEAD AND PROVE ENTITLEMENT TO RELIEF?"

 
 
"III. DID THE TRIAL COURT 
CORRECTLY HOLD THAT APPELLANT IS LIABLE FOR AN OBLIGATION IMPOSED BY STATE LAW 
AND NOT ON THE BOND EXECUTED PURSUANT TO THE MILLER ACT?"

 
 
"IV. IS THE IMPOSITION OF 
STATUTORY LIABILITY ON APPELLANT CONTRARY TO W.S. 39-6-405(a)(x) AND IF NOT, 
DOES IT VIOLATE THE SUPREMACY CLAUSE OF THE UNITED STATES 
CONSTITUTION?"

 
 
"V. CAN APPELLANT RAISE 
CONSTITUTIONAL OBJECTIONS TO W.S. 39-6-604(a) ON APPEAL IF IT DID NOT DO SO AT 
THE TRIAL COURT BELOW?"

 
 
Following briefing and 
oral argument in this case, the court asked the parties to submit supplemental 
briefs addressing the question:

 
 
"Whether beyond 
permitting the imposition and collection of sales and use taxes the provisions 
of Title 4, United States Code, §§ 105, 108 and 110,[7] or any other authority justify the 
extension of the provisions of § 39-6-604(a), W.S. 1977 (1984 Cum.Supp.) to a 
factual situation involving the furnishing of a bond pursuant to the Miller Act, 
40 U.S.C. § 270(a)(b) [sic], in connection with performance of a construction 
contract in Yellowstone National Park in view of the exclusive legislative 
jurisdiction of the United States of America over Yellowstone National 
Park?"

 
 
There are, then, two 
basic questions to be resolved in this appeal: (1) whether the Wyoming courts can 
entertain this suit; and (2) whether appellee was entitled to the relief 
granted.

 
 
JURISDICTION

 
 

[¶4.]     For clarity, we outline 
the well-established principles we need not decide in this case, but which set 
the stage for the question here raised. The State can recover sales and use tax 
from a nonresident prime contractor (§ 39-6-504(b), W.S. 1977 (May 1985 
Replacement);8 and § 39-6-510, W.S. 1977 (May 1985 
Replacement)9) even though he has a federal 
contract. C.R. Frederick, Inc. v. State 
Board of Equalization, 38 Cal. App. 3d 385, 120 Cal. Rptr. 434, 440 cert. 
denied 419 U.S. 1120, 95 S. Ct. 802, 42 L. Ed. 2d 819 (1974); G.M. Shupe, Inc. v. Bureau of Revenue, 
89 N.M. 265, 550 P.2d 277, 279 (1976); Robert E. McKee, General Contractor, Inc. v. 
Bureau of Revenue, 80 N.M. 453, 457 P.2d 701, 705 (1969); Hot Springs Concrete Co. v. Rosamond, 
178 Ark. 194, 10 S.W.2d 12, 13 (1928). Wyoming can recover the tax from any surety 
who has posted state statutory tax bonds for a nonresident prime contractor. 
Section 39-6-602(b), W.S. 1977 (May 1985 Replacement).10 Any such suit would properly be 
entertained by Wyoming courts. The State cannot, however, 
recover such taxes from the federal government in any court. Section 
39-6-505(a)(iv), W.S. 1977 (May 1985 Replacement);11 4 U.S.C. § 107(a); Washington v. United 
States, 460 U.S. 536, 103 S. Ct. 1344, 1346, 75 L. Ed. 2d 264 
(1983); United 
States v. New 
Mexico, 455 U.S. 720, 102 S. Ct. 1373, 1383, 71 L. Ed. 2d 580 
(1982); United States v. Tax Commission of Mississippi, 421 U.S. 599, 95 S. Ct. 1872, 1876, 44 L. Ed. 2d 404 (1975).

 
 

[¶5.]     In addition, if a 
nonresident prime contractor not working on a federal project has filed a 
performance bond, his surety can be held liable for the sales and use taxes. 
Section 39-6-604(a), supra note 4. This is so because the statute becomes a part 
of the contract. The existing law is part of a contract, just as if it had been 
written into the contract. Meuse-Rhine-Ijssel Cattle Breeders of Canada, Ltd. v. Y-Tex 
Corporation, Wyo., 590 P.2d 1306, 1309 (1979); Tri County Electrical Association, Inc. v. 
City of Gillette, Wyo., 584 P.2d 995, 1007 (1978). See also In re Hagood, Wyo., 356 P.2d 135 
(1960); Board of Commissioners of Platte 
County v. Mason, 38 Wyo. 1, 264 P. 93 (1928); Black and Yates v. Negros-Philippine Lumber 
Company, 32 Wyo. 248, 231 P. 398, 37 A.L.R. 1487 (1924). The United States 
Supreme Court has long so held. Ogden v. 
Saunders, 25 U.S. (12 Wheat.) 213, 257-262, 6 L. Ed. 606 (1827).

 
 

[¶6.]     Wyoming courts, however, 
have no jurisdiction to entertain suits on a Miller bond. 40 U.S.C. § 270b(b);12 United States ex rel. Harvey Gulf 
International Marine, Inc. v. Maryland Casualty Company, 573 F.2d 245, 247 
(5th Cir. 1978); Aetna Casualty & 
Surety Company v. United States ex rel. R.J. Studer & Sons, 365 F.2d 997, 1000 (8th Cir. 1966); American 
Insurance Company v. Kinder, Mo. App., 640 S.W.2d 537, 540 (1982); Hot Springs Concrete Co. v. Rosamond, 
supra, 10 S.W.2d  at 13; General 
Equipment, Inc. v. United States Fidelity and Guaranty Insurance Company, 
La. App., 292 So. 2d 806, 807 (1974); Pierce Contractors, Inc. v. Peerless 
Casualty Company, Fla., 81 So. 2d 747, 749 (1955).

 
 

[¶7.]     The issue presented in 
the case at bar, however, slips into the interstices created by these 
well-established principles. The question which remains unanswered by these 
authorities is whether the State can recover the tax owed by a nonresident 
contractor from a Miller Act surety in state court. The answer requires an 
analysis of the interplay of three statutory schemes with differing purposes and 
objectives.

 
 

[¶8.]     The Wyoming taxing scheme 
provides for sales tax (§ 39-6-401 et seq.) and the comparable-use tax (§ 
39-6-501 et seq.) and also provides for payment of sales and use taxes by 
contractors (§ 39-6-601 et seq.). In addition, § 39-6-604(a), W.S. 1977, 
provides that an additional obligation is imposed on one who provides a 
performance bond to also answer for the unpaid taxes of a nonresident 
contractor. At the time the surety contract in question was made, the statute 
read:

 
 
"Whenever a nonresident 
general or prime contractor or nonresident subcontractor furnishes a surety bond 
for the faithful performance of his contract or subcontract there is imposed an 
additional obligation upon the surety company to the state of Wyoming and the 
board as its agent that the contractor shall pay all sales and use taxes which 
become due in the performance of the contract. In the case of a nonresident 
general or prime contractor this additional obligation includes liability to pay 
the board all sales and use taxes which have not been paid to a licensed vendor 
or the board by the contractor or subcontractor. The general or prime contractor 
or his surety company is authorized to recover from the subcontractor the amount 
of sales and use taxes accruing with respect to purchases made by the 
subcontractor which were paid to the board by the contractor or the surety 
company, or an amount equal to the sales and use taxes so paid by the contractor 
may be withheld from payments made under the contract. The liability of the 
surety company under this section is limited to three percent (3%) of the 
contract price." Section 39-6-604(a).

 
 
It is under authority of 
this section that the State seeks to recover the unpaid taxes from United 
Pacific.

 
 

[¶9.]     The Buck Act authorizes 
the states to collect such taxes as are here in question on activities occurring 
within federal enclaves,13 except from the 
United 
States or its instrumentalities.14 Prior to passage of the Buck Act 
in 1947, the question of state authority to tax in federal enclaves was a 
difficult one. See United 
States v. New Mexico, supra, 102 S. Ct.  at 1380-1382, 
and C.R. Frederick, Inc. v. State Board 
of Equalization, supra, 120 Cal. Rptr.  at 438-439, for excellent analyses of 
prior history. The Buck Act was passed to prevent the claim of immunity from 
state use and sales taxes on the ground that the activity or use occurred in an 
area of exclusive federal legislative jurisdiction. United States v. State Tax Commission of 
Mississippi, supra, 95 S. Ct.  at 1879. The taxes now may be imposed to the 
same extent as if the activity occurred in a nonfederal area. 4 U.S.C. § 105(a), 
supra note 7. The Act retains the immunity of the United States 
itself from liability for such taxes. 4 U.S.C. § 107(a); United 
States v. New Mexico, supra, 102 S. Ct.  at 1383. 
Wyoming law 
also expressly honors this prohibition. Sections 39-6-405(a)(x) and 
39-6-505(a)(iv), W.S. 1977 (May 1985 Replacement). Thus, the Buck Act authorizes 
imposition of sales and use tax on contractors working on federal projects. C.R. Frederick, Inc. v. State Board of 
Equalization, supra, 120 Cal. Rptr.  at 440; Robert E. McKee, General Contractor, Inc. v. 
Bureau of Revenue, supra, 457 P.2d  at 705; Texas Co. v. Siefried, 60 Wyo. 142, 147 P.2d 837, 842, reh. denied, 60 Wyo. 142, 150 P.2d 99 (1944); Bullock v. W & W Vending & Food 
Service of Texas, Inc., Tex.Civ. App., 611 S.W.2d 713, 717-718 (1981). As 
the United States Supreme Court has explained, the liability of federal 
contractors for state taxes is broad indeed; congress may expressly expand 
immunity for federal contractors, but without such action, the states' power to 
tax the federal contractors will be denied only under the "clearest 
constitutional mandate." Washington v. 
United States, supra, 103 S. Ct.  at 1351, quoting United 
States v. New Mexico, supra, 102 S. Ct.  at 1384. 
Thus, it is clear that under the Buck Act the State of Wyoming has full 
jurisdiction to recover the state tax from the federal contractor, 
Bernal.

 
 

[¶10.]  In the case at bar, however, the State 
sought to recover the delinquent tax from the contractor's surety, United 
Pacific, under the authority of § 39-6-604(a), which imposes an additional 
statutory obligation on the surety for performance of a nonresident prime 
contractor to pay overdue sales and use taxes. The contractor in the case at bar 
did not post a tax bond under § 39-6-602(b). Rather, at the department's 
request, the contractor furnished copies of the payment and performance bond for 
the project which had been procured in response to Miller Act requirements. The 
department immediately notified United Pacific "that an additional obligation is 
imposed upon your surety company * * * that the contractor shall pay all sales 
and use taxes" and that United Pacific's liability was limited to three per cent 
of the total contract price.

 
 

[¶11.]  Thus, we are required to consider the 
third statutory scheme, the Miller Act (40 U.S.C. § 270a to § 270d). The Miller 
Act requires a federal contractor such as Bernal to post a payment bond. 40 
U.S.C. § 270a(a)(2), supra note 1. The Act also requires the federal contractor 
to post a performance bond (40 U.S.C. § 270a(a)(1), supra note 1), which 
includes a federal tax bond. 40 U.S.C. § 270a(d), supra note 1. The Miller Act's 
objectives are different from the previous statutory schemes. The policy of the 
Miller Act is to protect those whose labor and materials go into public projects 
as well as the United 
States. Aetna Casualty & Surety Company v. 
United States ex rel. R.J. Studer & Sons, supra, 365 F.2d  at 1000, 
citing United States ex rel. Sherman v. 
Carter, 353 U.S. 210, 77 S. Ct. 793, 797, 1 L. Ed. 2d 776 (1957), and Clifford F. MacEvoy Co. v. United States ex 
rel. Calvin Tomkins Co., 322 U.S. 102, 64 S. Ct. 890, 893, 88 L. Ed. 2d 1163 
(1944); United States ex rel. Bryant 
Electric Company, Ltd. v. Aetna Casualty & Surety Company, supra, 297 F.2d  at 669. This protection is in lieu of any protection they might receive 
under state statutes. Nickell v. United 
States ex rel. Texas Vitrified Pipe Company, 340 F.2d 117, 119 (10th Cir. 
1965), citing United States ex rel. Sherman v. Carter, supra. The Miller Act 
provides that all who provide labor or materials to a project for which a § 270a 
payment bond has been made have a right to sue on the bond. 40 U.S.C. § 
270b(a).15 The Act also mandates that 
"[e]very suit instituted under this section shall be brought * * * in the United 
States District Court * * * and not elsewhere." 40 U.S.C. § 270b(b). Appellant 
United Pacific claims that the latter section prevents the Wyoming state courts from 
exercising jurisdiction over the suit by the State against the surety on the 
statutory tax liability. We cannot agree.

 
 

[¶12.]  It is true that some courts have used 
broad language in discussing the exclusive jurisdiction provision which would 
appear to cover every judgment against a surety who provides a Miller Act bond. United States ex rel. Bryant Electric 
Company, Ltd. v. Aetna Casualty & Surety Company, supra, 297 F.2d  at 
669; Balboa Insurance Company v. Sippial 
Electric Company, Ala., 379 So. 2d 579, 581 (1980). The bulk of the cases 
involve suit by a materialman on the bond. See, e.g., United States ex rel. Harvey Gulf 
International Marine, Inc. v. Maryland Casualty Company, supra, 573 F.2d  at 
247; Pierce Contractors, Inc. v. Peerless 
Casualty Company, supra; Gichner v. 
Insurance Companies of North America, D.C.Mun.App., 180 A.2d 842 (1962); General Equipment, Inc. v. United States 
Fidelity and Guaranty Insurance Company, supra; Hoffmeister Cabinets of Nevada, Inc. v. 
Bivins, 87 Nev. 282, 486 P.2d 57 (1971); Gypsum Contractors, Inc. v. American Surety 
Company of New York, 37 N.J. 315, 181 A.2d 174 (1962); Gifford-Wood Company v. Travelers Indemnity 
Company, 42 Misc.2d 962, 249 N.Y.S.2d 317 (1964). Furthermore, it is well 
established that the mere fact that a Miller Act bond has been issued is not a 
proper basis for resting jurisdiction solely in the federal courts. Rather, for 
the federal jurisdiction to be exclusive, the suit must be one on the Miller Act 
bond. Western Casualty & Surety 
Company v. Biggs, 217 F.2d 163, 165 (7th Cir. 1954); Ukropina-Polich-Kral v. Superior Court for 
the County of 
Butte, 186 Cal. App. 2d 299, 8 Cal. Rptr. 692 (1960); Voelz v. 
Milgram Contracting Co., 272 Wis. 366, 75 N.W.2d 305, 306 (1956); Hot Springs Concrete Co. v. Rosamond, 
supra, 10 S.W.2d  at 14. The prohibition in the Miller Act against state court 
jurisdiction over actions on the bond does not relate to other suits which are 
not based directly on the bond. Massachusetts Bonding & Ins. Co. v. 
Robert E. Denike, Inc., 92 F.2d 657, 658 (3rd Cir. 1937), cited in Voelz v. Milgram Contracting Co., 
supra, 75 N.W.2d  at 306, and Ukropina-Polich-Kral v. Superior Court for 
the County of Butte, supra, 8 Cal. Rptr.  at 693.

 
 

[¶13.]  Some courts have rejected the general 
claim advanced there - that the suit against a Miller Act surety is not a suit 
on the bond - but such cases are confined to their peculiar facts, which are 
distinguishable from the case at bar. Koppers Company v. Continental Casualty 
Company, 337 F.2d 499 (8th Cir. 1964); Gypsum Contractors, Inc. v. American Surety 
Co. of New York, supra; Pierce 
Contractors, Inc. v. Peerless Casualty Company, supra, 81 So. 2d  at 749; General Equipment, Inc. v. United States 
Fidelity & Guaranty Insurance Company, supra, 292 So. 2d  at 807; American Insurance Company v. Kinder, 
supra, 640 S.W.2d  at 539; Airport 
Construction and Materials, Inc. v. Bivens, 279 Ark. 161, 649 S.W.2d 830, 
833 (1983).

 
 

[¶14.]  The instant suit does not seek recovery 
on the bond. Although the surety agreement must be read to include existing law, 
as if the law had been written in the contract (Meuse-Rhine-Ijssel Cattle Breeders of 
Canada, Ltd. v. Y-Tex Corporation, supra, 590 P.2d at 1309), the existing 
law, § 39-6-604(a), W.S. 1977, does not merely engraft a state tax bond on the 
performance bond agreement. Rather, in the plain words of the statute, "there is 
imposed an additional obligation upon the surety company to the state of 
Wyoming" to 
pay the tax. The result then is that, in essence, the surety contract recognizes 
the independent statutory obligation of the surety to answer for the taxes of 
the contractor. Neither is this suit one based directly on the bond, for the 
suit seeks recovery on the independent statutory obligation. Nor does this suit 
seek recovery out of the bond. The independent statutory obligation would exist 
even if the bond funds were exhausted by claims of the United States 
for failure of the contractor to perform. If this were a suit on the Miller Act 
bond, the State could not recover the tax from the surety, even in federal 
court. See Nickell v. United States ex 
rel. Texas Vitrified Pipe Company, supra, 340 F.2d  at 119 (the government 
could not "recover on the bond from the surety for the contractor's unpaid 
taxes," because "claims for taxes are not labor and material within the meaning 
of the ordinary Miller Act bond"). See also Oklahoma Tax Commission v. Seaboard Surety 
Company, 327 F.2d 709, 711 (10th Cir. 1964) (the use tax could not be 
recovered because it was the statutory obligation of the federal contractor, not 
of the surety on its bonds).

 
 

[¶15.]  Nor does the Wyoming statute 
improperly condition Miller Act rights. Cf. Aetna Casualty & Surety Company v. 
United States ex rel. R.J. Studer & Sons, supra, 365 F.2d  at 999; Hoeppner Construction Company v. United 
States ex rel. Mangum, 287 F.2d 108 (10th Cir. 1960). Rather, the statute 
imposes a distinct obligation on the surety also to guarantee the state 
taxes.

 
 

[¶16.]  We conclude that the Wyoming statute is clear 
and imposes an independent statutory obligation on United Pacific to answer for 
Bernal's unpaid taxes. This is the cost of doing business in this state. Like 
the investment broker in Gaudina v. 
Haberman, Wyo., 
644 P.2d 159, 166 (1982), United Pacific "is obligated to know the law 
surrounding such transactions * * *. It has long been a basic precept that 
ignorance of the law is no excuse." See also Czapla v. Grieves, 
Wyo., 549 P.2d 650 (1976). All contracts are made subject to the existing law. Meuse-Rhine-Ijssel Cattle Breeders of 
Canada, Ltd. v. Y-Tex Corporation, supra, 590 P.2d  at 1309. Imposition of 
this liability does not discriminate against the United States or 
those with whom it does business, as condemned in Washington v. United States, supra, 103 S. Ct.  at 1344, for the reason that all performance sureties for all nonresident 
general contractors are likewise obligated.

 
 

[¶17.]  In conclusion, it is appropriate for us 
to say that this action is quite simply not a suit on the bond nor is the action 
based directly on the bond and it is not a suit seeking recovery out of the 
bond. Rather, it is a suit to enforce an independent statutory obligation placed 
on all those who act as sureties on performance bonds for any nonresident prime 
contractor - a tax obligation squarely within the permissible parameters of the 
Buck Act. Thus, nothing in the Miller Act prevents the state district courts 
from exercising jurisdiction over this suit. 

 
 
SUPREMACY 
CLAUSE

 
 

[¶18.]  Appellant argues that § 39-6-604(a), W.S. 
1977, violates the Supremacy Clause of the United States Constitution, supra 
note 6, and should be set aside. We cannot agree. Under the Supremacy Clause, 
enforcement of a state statute such as ours may be preempted by federal law 
where congress expressly provides, where "despite the absence of explicit 
preemptive language" it is clear that congress intended to preempt by 
legislating comprehensively, or where it is impossible to comply with both the 
state and federal law and thus enforcement of the state law is an obstacle to 
the achievement of the federal aims. Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 104 S. Ct. 2694, 
2700, 81 L. Ed. 2d 580 (1984); Maryland v. Louisiana, 451 U.S. 725, 101 S. Ct. 2114, 2129, 68 L. Ed. 2d 576 
(1981); Guschke v. City of Oklahoma City, 763 F.2d 379, 383 (10th Cir. 1985).

 
 

[¶19.]  Appellee responds that we ought not 
decide this issue because it was not raised below. In general, this court will 
not consider the constitutionality of a statute if it has not been raised below. 
Jahnke v. State, Wyo., 692 P.2d 911, 928 (1984); Hopkinson v. State, Wyo., 664 P.2d 43, 50, 
cert. denied 464 U.S. 908, 104 S. Ct. 262, 78 L. Ed. 2d 246 (1983); Nickelson v. People, Wyo., 607 P.2d 904, 907 
(1980). The rule that this court will not address the constitutionality of a 
statute is a refinement of the rule in Scherling v. Kilgore, Wyo., 599 P.2d 1352, 1358 (1979). Nickelson v. 
People, supra, 607 P.2d  at 908. The rule recited in Scherling v. Kilgore is the 
well-established one which holds that the supreme court will not consider any 
issue raised for the first time on appeal unless it goes to jurisdiction or is 
fundamental. See, e.g., Kost v. First 
National Bank of Greybull, Wyo., 684 P.2d 819, 825 (1984); Estate of Altman, Wyo., 650 P.2d 277, 281 (1982); Harries v. State, Wyo., 650 P.2d 273, 277 (1982); In re Parental Rights of PP, Wyo., 648 P.2d 512, 519 (1982); Police Protective 
Association v. City of Rock Springs, Wyo., 631 P.2d 433, 437 (1981); Buttrey Food Stores Division v. Coulson, 
Wyo., 620 P.2d 549, 554, 20 A.L.R.4th 419 (1980). This court has accordingly 
addressed the constitutionality of our statutes when the question was not even 
raised by the parties in this court, where the matter is fundamental. White v. Fisher, Wyo., 689 P.2d 102, 105 
(1984). In the case at bar, it is clear that the question whether § 39-6-604(a) 
violates the Supremacy Clause by intruding on a federally preempted area is a 
fundamental matter.

 
 

[¶20.]  Enforcement of § 39-6-604(a) does not 
violate the Supremacy Clause. Under the Buck Act, the authority to tax in 
federal areas is explicitly granted the states. Thus, congress has neither 
expressly nor impliedly preempted the tax field, nor can it be impossible to 
comply with both state and federal law. The mandate of the Buck Act is that the 
state may tax as if YellowstoneNational 
Park were not a federal area. For purposes of the 
Buck Act, then, it makes no difference that the surety provided a federal Miller 
Act bond, rather than a state performance bond. Nothing in the Miller Act 
expressly prohibits a state from imposing such independent statutory obligation 
on the surety. Where, as here, an act of congress carves an exception to the 
exclusive federal legislative jurisdiction over federal areas, and where, as 
here, state legislation does not conflict with other relevant federal 
legislation, there is no violation of the Supremacy 
Clause.

 
 
PLEADING AND 
PROOF

 
 

[¶21.]  The trial court did not err in failing to 
grant appellant's motion to dismiss for failure to state a claim. We find that 
the complaint adequately sets forth the basis of the tax liability alleged 
against United Pacific. Technical forms of pleading are not required so long as 
the complaint shows the plaintiff is entitled to relief. Harris v. Grizzle, Wyo., 599 P.2d 580, 583 
(1979). Fair notice is the objective of a pleading. Johnson v. Aetna Casualty & Surety Co. 
of Hartford, Wyo., 608 P.2d 1299, 1302 (1980); Washakie School District Number One v. 
Herschler, Wyo., 606 P.2d 310, 316, cert. denied 449 U.S. 824, 101 S. Ct. 86, 
66 L. Ed. 2d 28 (1980). We find that the complaint is not defective under these 
standards.

 
 

[¶22.]  Lastly, appellant urges that the State 
failed to prove its entitlement to relief. In particular, appellant claims that 
the State failed to introduce any evidence, other than the deficiency notice, of 
the amount owed by the contractor. It is true that the State must have submitted 
some evidence upon every element of its claim. Osborn v. Manning, Wyo., 685 P.2d 1121, 1124 
(1984). It is also conceded that courts cannot supply evidence. Hendrickson v. Hendrickson, Wyo., 
583 P.2d 1265, 1267 (1978). The bonds, however, were introduced as part of 
Plaintiff's Exhibit No. 1, and indicate the amount of the construction contract. 
The statute limits the liability of the surety to three per cent of this amount. 
We find the bonds to be sufficient evidence from which the trial court could 
reasonably conclude that $53,360.38 was the amount of the tax 
owed.

 
 

[¶23.]  For the foregoing reasons, the judgment 
of the trial court is affirmed.

 
 

THOMAS, 
C.J., 
files a dissenting opinion.

 
 

1 40 U.S.C. § 270a 
provides:

 
 
"(a) Before any contract, 
exceeding $25,000 in amount, for the construction, alteration, or repair of any 
public building or public work of the United States is awarded to any person, 
such person shall furnish to the United States the following bonds, which shall 
become binding upon the award of the contract to such person, who is hereinafter 
designated as `contractor':

 
 
"(1) A performance bond 
with a surety or sureties satisfactory to the officer awarding such contract, 
and in such amount as he shall deem adequate, for the protection of the 
United 
States.

 
 
"(2) A payment bond with 
a surety or sureties satisfactory to such officer for the protection of all 
persons supplying labor and material in the prosecution of the work provided for 
in said contract for the use of each such person. Whenever the total amount 
payable by the terms of the contract shall be not more than $1,000,000 the said 
payment bond shall be in a sum of one-half the total amount payable by the terms 
of the contract. Whenever the total amount payable by the terms of the contract 
shall be more than $1,000,000 and not more than $5,000,000, the said payment 
bond shall be in a sum of 40 per centum of the total amount payable by the terms 
of the contract. Whenever the total amount payable by the terms of the contract 
shall be more than $5,000,000 the said payment bond shall be in the sum of 
$2,500,000.

 
 
"(b) The contracting 
officer in respect of any contract is authorized to waive the requirement of a 
performance bond and payment bond for so much of the work under such contract as 
is to be performed in a foreign country if he finds that it is impracticable for 
the contractor to furnish such bonds.

 
 
"(c) Nothing in this 
section shall be construed to limit the authority of any contracting officer to 
require a performance bond or other security in addition to those, or in cases 
other than the cases specified in subsection (a) of this 
section.

 
 
"(d) Every performance 
bond required under this section shall specifically provide coverage for taxes 
imposed by the United 
States which are collected, deducted, or 
withheld from wages paid by the contractor in carrying out the contract with 
respect to which such bond is furnished. However, the United States shall give 
the surety or sureties on such bond written notice, with respect to any such 
unpaid taxes attributable to any period, within ninety days after the date when 
such contractor files a return for such period, except that no such notice shall 
be given more than one hundred and eighty days from the date when a return for 
the period was required to be filed under the Internal Revenue Code of 1954. No 
suit on such bond for such taxes shall be commenced by the United States 
unless notice is given as provided in the preceding sentence, and no such suit 
shall be commenced after the expiration of one year after the day on which such 
notice is given."

 
 

2 Section 39-6-602, W.S. 
1977, 1984 Cum.Supp., provided:

 
 
"(a) Any contractor who 
furnishes tangible personal property under contract or in the development of 
real property is the consumer or user of the tangible personal property within 
the meaning of the sales and use tax laws of Wyoming.

 
 
"(b) To secure payment of 
sales and use taxes by nonresident prime contractors, each nonresident 
contractor shall file with the board a surety bond or legal security equal to 
three percent (3%) of the payments due under the contract or an amount 
determined by the board. The bond shall be conditioned upon the payment of all 
sales and use taxes which become due and payable to this state under the 
contract or in the real property development. This bond requirement does not 
apply for a nonresident contractor who has furnished a surety bond as provided 
by W.S. 39-6-604.

 
 
"(c) Any person a party 
to or performing work on a contract under this section may be enjoined from 
commencing or continuing any work until an approved bond has been filed with the 
department of revenue and taxation. Such an action shall be brought in the name 
of the state by the attorney general or by a county attorney. The state is not 
required to post security in seeking a restraining order or preliminary 
injunction under this section."

 
 

3 Section 39-6-603, W.S. 
1977, 1984 Cum.Supp., provided:

 
 
"(a) Any subcontractor 
who contracts with a general or prime contractor is liable for sales and use 
taxes as a general or prime contractor. The general or prime contractor shall 
withhold three percent (3%) of the payments due a nonresident subcontractor 
arising out of the contract entered into between both contractors. The 
contractor shall withhold the payments until the subcontractor furnishes him 
with a certificate issued by the board showing all sales and use taxes accruing 
by reason of the contract between them have been paid. The board may demand the 
withholdings at any time to satisfy the sales and use tax liability of the 
subcontractor and any balance shall be released by the board to him. If a 
contractor fails to withhold payments or refuses to remit them upon demand by 
the board he is liable for any sales and use taxes due the state by the 
nonresident subcontractor.

 
 
"(b) If a nonresident 
subcontractor contracts with a general or prime contractor and posts with the 
board a surety bond deemed sufficient by the board conditioned upon payment when 
due of all sales and use taxes in the performance of the contract, the 
withholding provisions of subsection (a) of this section do not 
apply."

 
 

4 Section 39-6-604(a), 
W.S. 1977, 1984 Cum. Supp., provided:

 
 
"Whenever a nonresident 
general or prime contractor or nonresident subcontractor furnishes a surety bond 
for the faithful performance of his contract or subcontract there is imposed an 
additional obligation upon the surety company to the state of Wyoming and the 
board as its agent that the nonresident contractor shall pay all sales and use 
taxes which become due in the performance of the contract. In the case of a 
nonresident general or prime contractor this additional obligation includes 
liability to pay the board all sales and use taxes which have not been paid to a 
licensed vendor or the board by the nonresident contractor. The nonresident 
general or prime contractor or his surety company is authorized to recover from 
the nonresident subcontractor the amount of sales and use taxes accruing with 
respect to purchases made by the nonresident subcontractor which were paid to 
the board by the nonresident contractor or the surety company, or an amount 
equal to the sales and use taxes so paid by the nonresident contractor may be 
withheld from payments made under the contract. The liability of the surety 
company under this section is limited to three percent (3%) of the contract 
price."

 
 

5 Section 39-6-405(a)(x), 
W.S. 1977, 1984 Cum. Supp., provided:

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

 
 
* * * * * 
*

 
 
"(x) Sales to the 
United 
States government; * * *"

 
 

6 The second clause of 
Article VI, United States Constitution, provides:

 
 
"This Constitution, and 
the Laws of the United States which shall be made in Pursuance thereof; and all 
Treaties made, or which shall be made, under the Authority of the United States, 
shall be the supreme Law of the Land; and the Judges in every State shall be 
bound thereby, any Thing in the Constitution or Laws of any State to the 
Contrary notwithstanding."

 
 

7 4 U.S.C. § 105 
provides:

 
 
"(a) No person shall be 
relieved from liability for payment of, collection of, or accounting for any 
sales or use tax levied by any State, or by any duly constituted taxing 
authority therein, having jurisdiction to levy such a tax, on the ground that 
the sale or use, with respect to which such tax is levied, occurred in whole or 
in part within a Federal area; and such State or taxing authority shall have 
full jurisdiction and power to levy and collect any such tax in any Federal area 
within such State to the same extent and with the same effect as though such 
area was not a Federal area.

 
 
"(b) The provisions of 
subsection (a) shall be applicable only with respect to sales or purchases made, 
receipts from sales received, or storage or use occurring, after December 31, 
1940."

 
 
4 U.S.C. § 108 
provides:

 
 
"The provisions of 
sections 105-110 of this title shall not for the purposes of any other provision 
of law be deemed to deprive the United States of exclusive jurisdiction over any 
Federal area over which it would otherwise have exclusive jurisdiction or to 
limit the jurisdiction of the United States over any Federal 
area."

 
 
4 U.S.C. § 110 
provides:

 
 
"As used in sections 
105-109 of this title 

 
 
"(a) The term `person' 
shall have the meaning assigned to it in section 3797 of title 
26.

 
 
"(b) The term `sales or 
use tax' means any tax levied on, with respect to, or measured by, sales, 
receipts from sales, purchases, storage, or use of tangible personal property, 
except a tax with respect to which the provisions of section 104 of this title 
are applicable.

 
 
"(c) The term `income 
tax' means any tax levied on, with respect to, or measured by, net income, gross 
income, or gross receipts.

 
 
"(d) The term `State' 
includes any Territory or possession of the United 
States.

 
 
"(e) The term `Federal 
area' means any lands or premises held or acquired by or for the use of the 
United States or any department, establishment, or agency, of the United States; 
and any Federal area, or any part thereof, which is located within the exterior 
boundaries of any State, shall be deemed to be a Federal area located within 
such State."

 
 

8 Section 39-6-504(b), 
W.S. 1977 (May 1985 Replacement), provides:

 
 
"Persons storing, using 
or consuming tangible personal property are liable for the tax imposed by this 
article. The liability is not extinguished until the tax has been paid to the 
state but a receipt given to the person by a registered vendor in accordance 
with subsection (a) of this section is sufficient to relieve the purchaser from 
further liability."

 
 

9 Section 39-6-510, W.S. 
1977 (May 1985 Replacement), provides:

 
 
"(a) 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 due on all the property of those 
persons. The tax due together with interest, penalties and costs may be 
collected by appropriate judicial proceedings or the board may seize and sell at 
public auction so much of the persons' property as will pay all the tax, 
interest, penalties and costs. Notice of the auction must be published for four 
(4) weeks in a newspaper published in the resident county of the persons 
involved.

 
 
"(b) The board may bring 
an action to recover any delinquent taxes, penalty or interest in any 
appropriate court within ten (10) years following the delinquency. In such 
action a certificate by the board is prima facie evidence of the amount 
due.

 
 
"(c) If any person is 
delinquent in the payment of taxes, penalty or interest imposed by this article, 
the board may give notice of the amount of the delinquency to any person having 
in their possession or control credits or personal property belonging to the 
delinquent taxpayer or owing debts to him at the time of the notice. No person 
so notified shall transfer or make any disposition of the credits, personal 
property or debts unless the board approves of the disposition or until sixty 
(60) days has elapsed from the receipt of the notice. Each person receiving a 
notice under this subsection shall advise the board within five (5) days after 
receiving the notice of all credits or personal property in their possession or 
under their control which belong to the delinquent taxpayer or of debts owed 
him.

 
 
"(d) At any time 
following a delinquency the board may seize and sell at public auction any 
property owned by the delinquent taxpayer to pay all taxes, penalty and interest 
due plus the cost involved in seizing and selling the property. Notice of the 
sale showing its time and place shall be mailed to the delinquent taxpayer at 
least ten (10) days prior to the sale. The notice shall also be printed in a 
newspaper of general circulation published in the county wherein the seized 
property is to be sold at least ten (10) days prior to the sale. If no newspaper 
is published in the county the notice shall be posted in three (3) public places 
ten (10) days prior to the sale. The notice shall contain a description of the 
property to be sold, a statement of the entire amount due, the name of the 
delinquent taxpayer and a statement that unless the amount due is paid on or 
before the time of sale, the property or so much thereof as necessary shall be 
sold. The board shall give the purchaser a bill of sale for personal property or 
a deed for real property purchased at the sale. Any unsold property seized may 
be left at the sale at the risk of the delinquent taxpayer. If the monies 
received at the sale are in excess of the amount due the excess shall be given 
to the delinquent taxpayer upon his receipt therefor. If a receipt by the 
delinquent taxpayer is not given the board shall deposit the excess with the 
state treasurer as trustee for the delinquent taxpayer.

 
 
"(e) Upon request of the 
board, the attorney general may institute proceedings to restrain and enjoin any 
person from:

 
 
"(i) Acting as a vendor 
until they have received a license as required by W.S. 
39-6-403(a);

 
 
"(ii) Continuing to act 
as a vendor if they have not remitted to the board, when due, all taxes, penalty 
and interest imposed by this article.

 
 
"(f) No person who feels 
aggrieved by the payment of the taxes, penalty and interest imposed by this 
article may appeal a decision of the board until all taxes, penalty and interest 
have been paid."

 
 

10 Section 39-6-602(b), 
W.S. 1977 (May 1985 Replacement), provides:

 
 
"To secure payment of 
sales and use taxes by nonresident prime contractors, each nonresident 
contractor shall file with the board a surety bond or legal security equal to 
three percent (3%) of the payments due under the contract or an amount 
determined by the board. The bond shall be conditioned upon the payment of all 
sales and use taxes which become due and payable to this state under the 
contract or in the real property development. This bond requirement does not 
apply for a nonresident contractor who has furnished a surety bond as provided 
by W.S. 39-6-604."

 
 

11 Section 39-6-505(a)(iv), 
W.S. 1977 (May 1985 Replacement), provides:

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

 
 
* * * * * 
*

 
 
"(iv) Purchases made by 
the United 
States government; * * *"

 
 

12 40 U.S.C. § 270b(b) 
provides:

 
 
"Every suit instituted 
under this section shall be brought in the name of the United States for the use 
of the person suing, in the United States District Court for any district in 
which the contract was to be performed and executed and not elsewhere, 
irrespective of the amount in controversy in such suit, but no such suit shall 
be commenced after the expiration of one year after the day on which the last of 
the labor was performed or material was supplied by him. The United States 
shall not be liable for the payment of any costs or expenses of any such 
suit."

 
 

13 4 U.S.C. § 105(a), supra 
note 7.

 
 

14 4 U.S.C. § 107 
provides:

 
 
"(a) The provisions of 
sections 105 and 106 of this title shall not be deemed to authorize the levy or 
collection of any tax on or from the United States or any instrumentality 
thereof, or the levy or collection of any tax with respect to sale, purchase, 
storage, or use of tangible personal property sold by the United States or any 
instrumentality thereof to any authorized purchaser.

 
 
"(b) A person shall be 
deemed to be an authorized purchaser under this section only with respect to 
purchases which he is permitted to make from commissaries, ship's stores, or 
voluntary unincorporated organizations of personnel of any branch of the Armed 
Forces of the United 
States, under regulations promulgated by the 
departmental Secretary having jurisdiction over such 
branch."

 
 

15 40 U.S.C. § 270b(a) 
provides:

 
 
"Every person who has 
furnished labor or material in the prosecution of the work provided for in such 
contract, in respect of which a payment bond is furnished under sections 270a to 
270d of this title and who has not been paid in full therefor before the 
expiration of a period of ninety days after the day on which the last of the 
labor was done or performed by him or material was furnished or supplied by him 
for which such claim is made, shall have the right to sue on such payment bond 
for the amount, or the balance thereof, unpaid at the time of institution of 
such suit and to prosecute said action to final execution and judgment for the 
sum or sums justly due him: Provided, however, That any person having direct 
contractual relationship with a subcontractor but no contractual relationship 
express or implied with the contractor furnishing said payment bond shall have a 
right of action upon the said payment bond upon giving written notice to said 
contractor within ninety days from the date on which such person did or 
performed the last of the labor or furnished or supplied the last of the 
material for which such claim is made, stating with substantial accuracy the 
amount claimed and the name of the party to whom the material was furnished or 
supplied or for whom the labor was done or performed. Such notice shall be 
served by mailing the same by registered mail, postage prepaid, in an envelope 
addressed to the contractor at any place he maintains an office or conducts his 
business, or his residence, or in any manner in which the United States marshal 
of the district in which the public improvement is situated is authorized by law 
to serve summons."

 
 

THOMAS, Chief Justice, 
dissenting.

 
 

[¶24.]  Because I am persuaded that this is an 
action upon a Miller Act bond which must be brought in the United States 
District Court, I am constrained to dissent from the position of my brothers in 
this case. It may be true that our statute imposes an independent statutory 
obligation, but that statutory obligation is only the lever in this operation, 
and surely the Miller Act bond is the fulcrum. Obviously no recovery could be 
had by the State of Wyoming in the absence of the Miller Act bond, 
and it is to the conditions of that contract that the independent statutory 
obligation attaches. In order to invoke the provisions of the statute the State 
of Wyoming 
must, and did, allege the furnishing of the bond which it attached to its 
complaint as an exhibit and incorporated in its allegations by reference. The 
bond quite obviously was furnished pursuant to the Miller 
Act.

 
 

[¶25.]  As I perceive this situation the action 
is brought upon a contract in the form of the Miller Act bond. One of the 
contractual provisions is that found in § 39-6-604(a) W.S. 1977 (May 1985 
Replacement). The significance of the statute, however, is that it adds a 
contractual provision; it cannot create a completely independent statutory 
obligation. The statutory obligation cannot function in a 
vacuum.

 
 

[¶26.]  If the thrust of the statute is to simply 
create an independent statutory obligation, then its efficacy within an area of 
exclusive federal legislative jurisdiction is not authorized by the Buck Act, 4 
U.S.C. § 105 et seq. Unless this obligation attaches to the Miller Act bond as 
an additional condition of that contract, it would have no validity within the 
confines of Yellowstone National Park. The Buck Act cannot be construed to 
authorize legislation pursuant to which sales or use taxes are collectible from 
a stranger to the transaction.

 
 

[¶27.]  I would reverse the district court on the 
ground that it was without subject matter jurisdiction because of the provision 
of the Miller Act requiring suit to be brought in the United States District 
Court.