Opinion ID: 2570383
Heading Depth: 2
Heading Rank: 2

Heading: offsets for underpayment and overpayments

Text: The Board allowed Amoco to offset overpayments and underpayment for the audit period prior to calculating interest and penalties. It did so on a dual application of our holding in Kunard v. Enron Oil & Gas Co., 869 P.2d 132, 134 (Wyo.1994) and Wyo. Stat. Ann. § 39-2-214(e) (Michie Repl.1994). We agree with the Department that the Board's decision is contrary to law. In Kunard, 869 P.2d at 134, we recognized that when a taxpayer excludes required elements from its reported production, and the exclusion causes an underpayment, the tax is delinquent upon the taxpayer's failure to pay on the date due, not at the later date when the taxpayer is presented with notice and demand of the deficiency. However, we held that Enron Oil and Gas Company properly offset credits and underpayment for different properties in a given year, [b]ecause Enron's overpayments exceeded its underpayments for each of the tax years in question and, therefore, the County was never deprived use of the underpayment dollars. Thus, it would be inequitable to allow the County to charge interest on the underpayment, particularly since the County has had free use of the overpayment dollars. Id. at 136. In the present case, however, it is undisputed that there were several given years when Amoco's tax payment was deficient. Thus, the reasoning in Kunard does not apply here. Neither can Amoco rely on Wyo. Stat. Ann. § 39-2-214(e), effective March 11, 1991. This statute provides: (e) The taxpayer is entitled to receive an offsetting credit for any overpaid gross product or severance tax identified by an audit that is within the scope of the audit period, without regard to the limitation period for requesting refunds. In calculating interest and penalty, the department or board of county commissioners shall first compute a net deficiency amount after subtracting any offsetting credit and then calculate any interest and penalty due. Offsets or refunds pursuant to Wyo. Stat. Ann. § 39-2-214(e) are not applicable to audits commenced before the effective date of the statute. Thunder Basin Coal Co. v. Wyoming State Bd. of Equalization, 896 P.2d 1336, 1341 (Wyo.1995) (ad valorem taxes); Texaco, Inc. v. State Bd. of Equalization, 845 P.2d 398, 402 (Wyo.1993). Because the audits in this case commenced prior to the operation of Wyo. Stat. Ann. § 39-2-214(e), the Board erred in allowing Amoco to offset credits and overpayments during the entire audit period.