Opinion ID: 1288234
Heading Depth: 2
Heading Rank: 1

Heading: Deference to the Commission's Interpretation of the Statute

Text: ¶ 47 This court has articulated three possible levels of deference for an agency's interpretation of a statute: great weight, due weight, and no deference. Racine Harley-Davidson, 292 Wis.2d 549, ¶ 12, 717 N.W.2d 184; DOR v. River City Refuse Removal, Inc., 2007 WI 27, ¶¶ 32-35, 299 Wis.2d 561, 729 N.W.2d 396. ¶ 48 Great weight deference is given to the agency's statutory interpretation when each of the following requirements are met: (1) the agency is charged by the legislature with the duty of administering the statute; (2) the agency interpretation is one of long standing; (3) the agency employed its expertise or specialized knowledge in forming its interpretation; and (4) the agency's interpretation will provide uniformity and consistency in the application of the statute. Racine Harley-Davidson, 292 Wis.2d 549, ¶ 16, 717 N.W.2d 184. When great weight deference is appropriate, a reviewing court should sustain the agency's reasonable statutory interpretation even if the court concludes that another interpretation is equally reasonable, or even more reasonable, than the agency's interpretation. Id., ¶ 17. ¶ 49 Due weight deference is given to the agency's statutory interpretation when the agency has some experience in an area but has not developed the expertise that necessarily places it in a better position than a court to make judgments regarding the interpretation of the statute. Id., ¶ 18. Due weight deference is based on the fact that the legislature has charged the agency with the enforcement of the statute in question, not on the expertise of the agency. Id. When this court applies due weight deference, it will sustain an agency's statutory interpretation if the interpretation is not contrary to the plain meaning of the statute, and the court does not determine that a more reasonable interpretation exists. Id. ¶ 50 No deference is given to the agency's statutory interpretation when the issue is one of first impression, the agency has no experience or expertise in deciding the legal issue presented, or the agency's position on the issue has been so inconsistent as to provide no real guidance. Id., ¶ 19. ¶ 51 In the case at hand, we afford the Commission due weight deference on its statutory interpretation of Wis. Stat. § 77.51(20). The legislature designated the Commission as the final authority on all questions of law and fact arising under the tax statutesalthough, the Commission's decision is still subject to judicial review. Wis. Stat. § 73.01(4). Additionally, the Commission has experience interpreting and applying Wis. Stat. § 77.51(20). All City Commc'n Co., Inc. v. DOR, 2003 WI App 77, ¶ 11, 263 Wis.2d 394, 661 N.W.2d 845 (stating that the commission has experience determining whether property is [tangible] personal property for purposes of imposing sales and use taxes); Menasha, 299 Wis.2d 348, ¶ 29, 728 N.W.2d 738 (citing to other Wisconsin court decisions and stating that the commission has generated and employed its substantial experience discharging its duty in construing the rules governing the taxability of tangible property since Wis. Stat. § 77.51(20) was enacted. See, e.g., DOR v. River City Refuse Removal, Inc., 2006 WI App 34, ¶¶ 12, 14, 289 Wis.2d 628, 712 N.W.2d 351, review granted, 2006 WI 108, 292 Wis.2d 409, 718 N.W.2d 723 (2006); All City Commc'n Co. v. DOR, 2003 WI App 77, ¶¶ 6, 11, 263 Wis.2d 394, 661 N.W.2d 845). ¶ 52 While we afford the Commission due weight deference on its interpretation of the statute, this case centers on the Commission's interpretation of the regulation or rule, Wis. Admin. Code § Tax 11.71(1)(e). The statute in question defines tangibleand thus taxablepersonal property as including computer programs except custom computer programs. Wis. Stat. § 77.51(20) (emphasis added). The statute, however, does not define custom programs; rather, the regulation defines the phrase custom programs. As a result, the statutory interpretation is dependent upon the interpretation of the regulation. Thus, while we have articulated the proper standard for reviewing the statute in this case, the statute is attenuated as to the issue before this court because it is the Commission's interpretation of the rule, Wis. Admin. Code § Tax 11.71(1)(e), that is at issue.