Opinion ID: 2508084
Heading Depth: 1
Heading Rank: 5

Heading: Gross Price or Net Price

Text: [¶10] Lance argues the term price as used within § 39-14-205(f) means a net price and had the legislature intended the incentive to be based on a gross price, it could have easily specified that intention. In addition, Lance proffers that in order to harmonize the statutes that impose taxes with this exemption statute, § 39-14-205(f), this Court must conclude the term price means net price or taxable value. [¶11] In countering Lance's arguments, DOR argues the term price as used within § 39-14-205(f) is unambiguous and refers to gross price because the commonly accepted definition of the word price when used alone implies a gross price as opposed to a net price calculated after allowed deductions. DOR also asserts that had the legislature meant net price or taxable value, it simply could have said so as it has done in other tax statutes. [¶12] Our analysis must begin with a determination of whether § 39-14-205(f) is unambiguous. If the statute is unambiguous, we must give effect to the plain and ordinary meaning of the language used in the statute. Construction of legislative enactments is only appropriate where the enactment has first been found, as a matter of law, to be ambiguous. A statute is unambiguous if its wording is such that reasonable persons are able to agree to its meaning. Airtouch Communications, Inc. v. Dept. of Revenue, 2003 WY 114, ¶14, 76 P.3d 342, ¶14 (Wyo. 2003) (citing Snake River Brewing Co., Inc. v. Town of Jackson, 2002 WY 11, ¶29, 39 P.3d 397, ¶29 (Wyo. 2002)); Petroleum Inc. v. State ex rel. State Board of Equalization, 983 P.2d 1237, 1240 (Wyo. 1999); Chevron U.S.A., Inc. v. State, 918 P.2d 980, 984 (Wyo. 1996); General Chemical Corp. v. State Board of Equalization, 819 P.2d 418, 420 (Wyo. 1991)); State ex rel. Dept. of Rev. v. UPRC , ¶12; and Wyodak, ¶¶18-19. [¶13] We do find the term price as used in § 39-14-205(f) to be unambiguous. The common meaning of the word price is: the amount of money or other consideration asked for or given in exchange for something else; the quantity of one thing that is exchanged or demanded in barter or sale for another; or cost at which something is obtained. See Black's Law Dictionary 1207 (7th ed. 1999); Webster's Third New International Dictionary 1798 (1966). [2] Lance argues that had the legislature intended gross price, it would have used the word gross. We disagree. Since the term price means the full amount paid, there was no need to specify gross price. Contrary to Lance's contention, we conclude if the legislature intended net price, it would have so stated. [¶14] Even assuming that § 39-14-205(f) could be deemed ambiguous, we would reach the same result by construing its meaning in light of other related Wyoming severance tax statutes. Throughout those statutes, the term price is not synonymous with net price or taxable value. Rather, when the legislature has addressed the deduction of expenses or a net price, it has done so in the context of determining fair market value or value, as opposed to simply price. For instance, Wyo. Stat. Ann. § 39-14-203(b)(ii) (LexisNexis 2003) states in applicable part, expenses incurred by the producer prior to the point of valuation are not deductible in determining the fair market value of the mineral. In the same way, Wyo. Stat. Ann. § 39-14-203(b)(vi)(B) (LexisNexis 2003) provides, under a comparable value computation, that  fair market value is the arms-length sales price less processing and transportation fees charged to other parties. Similarly § 39-14-203(b)(vi)(C) states, under a netback calculation,  fair market value is the sales price minus expenses incurred by the producer for transporting produced minerals to the point of sale and third party processing fees. Thus, we conclude the term price as used by the legislature is distinguished from taxable value which is a net price. We find unpersuasive Lance's argument that it should be allowed to subtract its post-production transportation and other processing costs to arrive at the net price of the mineral for purposes of applying the new well incentive. [¶15] We also find inapplicable PacifiCorp, Inc. v. Dept. of Revenue, 2001 WY 84, 31 P.3d 64 (Wyo. 2003), which held that the appraised value of tax exempt property must be calculated in the same manner as taxable property, constituting an apples to apples comparison. In the new well incentive statute, the legislature was not addressing appraised value, but instead was defining the market conditions in which it was willing to provide a tax incentive to producers. Therefore, comparing the trigger price in the incentive statute to the fair market value is truly an apples to oranges comparison. [¶16] Lance's interpretation of price also ignores the legislature's clear intent, which was to encourage the drilling of new wells at times in which the market price for oil and gas is low. If Lance's interpretation were correct, it would transform the new well incentive into a benefit for those paying higher processing, transportation and related costs, which is not the actual purpose of the new well incentive.