Opinion ID: 2509156
Heading Depth: 1
Heading Rank: 30

Heading: Objective of the Statutes

Text: 89. The Wyoming Constitution requires the gross product of mines to be taxed in proportion to the value thereof and uniformly valued for tax purposes at full value as defined by the legislature. Wyo. Const. Art. 15, งง 3, 11. For natural gas, the value of the gross product means fair market value as prescribed by Wyo. Stat. Ann. 39-14-203(b), less any deductions and exemption allowed by Wyoming law or rules. Wyo. Stat. Ann. งXX-XX-XXX(a)(xxix). 90. The fair market value for...natural gas shall be determined after the production process is completed. ...[E]xpenses incurred by the producer prior to the point of valuation are not deductible in determining the fair market value of the mineral. Wyo. Stat. Ann. งXX-XX-XXX(b)(ii). These two sentences contain two fundamental premises for our decision. 91. First, the point of valuation is a physical location. This physical location is determined by reference to the production process, and where that production process is completed. We will accordingly be deciding which party appropriately identified a point in the sequence of equipment that was the point of valuation. 92. Second, the point of valuation directly affects the calculation of expenses that may be deducted from Barrett's sale price to determine fair market value. Barrett sold its gas at a location beyond the point of valuation. Findings of Fact, ถ19. For natural gas sold after the point of valuation, expenses incurred after the point of valuation are deducted from the sale price to reach fair market value. Wyo. Stat. Ann. งXX-XX-XXX(b)(vi). The taxpayer argues for a point of valuation that is closer to the wellhead, and further from the point of sale, than the point of valuation chosen by the Department of Revenue. If we found for the taxpayer, the effect would be to increase the deduction of expenses from the sale price of the taxpayer's natural gas.