Opinion ID: 2634661
Heading Depth: 1
Heading Rank: 5

Heading: Applicable Sales and Fuels Taxation Statutes

Text: [¶ 6] In Wyoming, sales tax is levied upon [t]he sales price of every retail sale of tangible personal property. Wyo. Stat. Ann. § 39-15-103(a)(i)(A) (Michie 1998 Supp.). Fuel is taxed under separate statutes. Wyo. Stat. Ann. § 39-6-901 through § 39-6-914 (Michie 1996), recodified as Wyo. Stat. Ann. § 39-17-101 through § 39-17-211 (Michie 1998 Supp.). Nearly all fuel sales were exempt from sales tax; however, for the audit period, dyed diesel fuel was not exempted [2] and was subject to sales tax and the LUST tax. § 39-6-405(iii)(E). [3] The Department contends that before the sales tax is computed, the statutory definition of sales price requires that the LUST tax be included as part of the sales price. That definition states: ... the consideration paid by the purchaser of tangible personal property ... excluding any taxes imposed by the federal government or this article[.] § 39-6-402(a)(iv), recodified as § 39-15-101(a)(i)(vi). [¶ 7] The Board determined that consideration is the amount that a purchaser pays to the vendor and, based on the applicable statute, the Board decided that the purchaser does not pay the LUST tax to the vendor, but pays it to the State of Wyoming. That statute states: The taxes imposed on motor fuel shall be conclusively presumed to be a direct tax on the ultimate or retail consumer. When taxes are paid by any person other than the ultimate or retail consumer, the payment shall be considered as precollected and as an advance payment for the purpose of convenience and facility to the consumer and shall thereafter be added to the price of the motor fuel and recovered from the ultimate or retail consumer, regardless of where or how the taxable fuel is ultimately consumed. Wyo. Stat. Ann. § 39-6-904(n) (Michie 1997), recodified as § 39-17-203(b)(ii) and § 203(c)(i) (Michie 1998 Supp.). The Board concluded that the LUST tax creates a debt of the purchaser, not the vendor, to the State of Wyoming, and consequently, the LUST tax is not consideration to the vendor and not taxable for sales tax purposes. [¶ 8] The Department believes that because the LUST tax was not specifically exempted from sales tax in any statutes while several other types of taxes were specifically exempted, the legislature intended that the LUST tax become part of the sales price and the Board's determination is in error. PRCC contends that the Board correctly ruled that the LUST tax is not part of the consideration between the parties to the sale but, instead, is a separate payment owed by the purchaser to the State of Wyoming upon completion of the sale. PRCC argues that the legislature intended that the LUST tax receive the same treatment as all other fuel taxes, meaning that both the sales and LUST taxes are imposed simultaneously and then added to the sales price and the total amount is then charged to the retail customer. [¶ 9] To support their arguments, both parties extensively discuss the historical background of the numerous fuel and sales taxation provisions (back to the 1920s), and several decisions from other jurisdictions with the most relevant ones predating 1997 concerning different kinds of taxation statutes to determine if, generally, a tax should be taxed. However, we agree with the Board that the legislature's adoption of § 39-6-904(n) in 1997, recodified as § 39-17-203(b)(ii) and § 203(c)(i), changed fuel taxes from a tax on wholesalers to a direct tax on the ultimate consumer. The statutory language of § 904(n) plainly states this to be the legislative intent, and effectively requires that motor fuel taxes, including the LUST tax, be added to the price of the motor fuel. § 39-6-904(n). The use of the term added was deliberate and is intended to mean that the LUST tax is not included as part of the price but is meant to be supplementary, meaning that the tax is separately but simultaneously imposed and then added to the base price of the fuel to arrive at the total amount that the ultimate consumer pays. This interpretation is required, first, because the LUST tax is due from the consumer on a per gallon basis after the vendor has set the price and, logically, cannot be part of the sales price and, second, because the legislature has historically exempted fuel sales from sales taxation. 1980 Wyo. Sess. Laws Ch. 12, § 1; [4] 1986 Wyo. Sess. Laws Ch. 87, § 1. [5] [¶ 10] Our interpretation is supported by the later recodification of the fuel and sales tax statutes when the legislature completely reorganized and renumbered Title 39 of the Wyoming Statutes. 1998 Wyo. Sess. Laws. Ch. 5. Effective March 6, 1998, the Legislature repealed these articles and recodified Title 39, stating: This act is intended simply as a recodification. The Wyoming legislature intends to make no substantive change to prior law including, but not limited to revenue, either increases or decreases, powers, duties, authorities, obligations, definitions, administration, confidentiality, imposition, tax rates, exemptions, licenses, permits, compliance, collection procedures, enforcement, remedies, statutes of limitation or distribution of taxes. This act is not intended to affect the validity of any rule or regulation promulgated prior to the effective date of this act. 1998 Wyo. Sess. Laws Ch. 5, §§ 6, 8. [¶ 11] Under the recodification, the LUST tax was specifically exempted from sales taxation. Wyo. Stat. Ann. § 39-15-105(a)(v)(C) (Michie 1998 Supp.). [6] Although the Department contends that the Legislature made a mistake and the LUST tax remained subject to sales taxation, we do not see how the plain language of the exemption statutes can be ignored or determined to be a mistake. We think the reasonable view is that the LUST tax was exempted by § 39-6-904(n) before the recodification, the recodification confirmed that no change to the law was intended, and then, by statute, the LUST tax was specifically exempted. The Board believed that this view was also historically supported by past legislation and interpretations indicating that a tax on a tax is not favored. While we agree that these past interpretations of other taxation legislation are persuasive, we fortunately have specific statutory language requiring that the Board's decision be affirmed. [¶ 12] The Board's order reversing the Department is affirmed.