Opinion ID: 2509156
Heading Depth: 1
Heading Rank: 46

Heading: Accrued Exempt Royalties

Text: 163. Williams contends that the Department failed to allow a deduction for certain exempt state royalties. Williams accrued certain exempt state royalties on its general ledger in a long-term liability account. Findings of Fact, ถ82. The Departments of Revenue and Audit refused to allow a deduction for those royalties because they are in dispute. Findings of Fact, ถ83. 164. Williams relies on a definition found in the Department regulations: Exempt royalty means royalty expense, as determined on the accrual basis accounting in accordance with generally accepted accounting principles, for interests owned by the United States, the State of Wyoming, or an Indian tribe. Rules, Wyoming Department of Revenue, Chapter 6, Section 4(o). 165. Williams points to its accrual, and contends that the definition dictates a deduction for Barrett. At a minimum, this ignores the word expense, which contemplates more than a contingent obligation or an amount in dispute. Since the Department's construction is not either clearly erroneous or inconsistent with the plain meaning of the rule, we defer to the Department's construction. Pinther v. State, Department of Administration and Information, 866 P.2d 1300, 1302 (Wyo. 1994). We therefore conclude that, as a matter of law, the Department was not obliged to allow a deduction for the exempt state royalties which have not been paid due to in dispute. 166. If the dispute is eventually resolved against Williams, and the exempt royalties are paid, Williams will have the remedy of a refund. Wyo. Stat. Ann. งXX-XX-XXX(c); Atlantic Richfield Company v. Board of County Commissioners of Sweetwater County, 569 P.2d 1267 (Wyo. 1977).