Court Opinion

ID: 9787219
Source: CourtListenerOpinion
Date Created: 2023-08-31 00:12:47.213554+00
Date Added: 2024-06-11T07:36:53.554929
License: Public Domain

Justice MARTINEZ,
concurring in the judgment only:
While I agree with the majority’s judgment that the decision of the court of appeals should be reversed, I do not agree with the reasoning employed to reach that result. The majority finds the 1999 language of the Conservation Easement Tax Credit Act (“Act”), § 39-22-522, C.R.S. (1999), limiting the tax credit to $100,000 “per donation” to be unambiguous. I, however, view the language as ambiguous, but would therefore defer to the Department of Revenue’s (“Department”) interpretation of the statute.
As enacted in 1999, the Act states “there shall be allowed a credit with respect to the income taxes imposed by this article to each taxpayer who donates during the taxable year all or part of the value of a perpetual conservation easement in gross-” § 39-22-522(2). The Act defines “taxpayer” as “a resident individual or a domestic or foreign corporation subject to the provisions of part 3 of this article.” Id. at (1). The Act limits the tax credit to “one hundred thousand dollars per donation.” Id. at (4) (emphasis added).
The majority holds the “per donation” language unambiguously provides that the Act’s $100,000 tax credit limits the amount of that credit to an aggregate total of $100,000 per conservation easement. Therefore, although in 1999 the Act was silent as to tenants in common, the majority holds the “per donation” language means all tenants in common who donated a single conservation easement must split the $100,000 credit.
In contrast to the majority, I view the “per donation” language as ambiguous because it is susceptible to multiple meanings. The American Heritage Dictionary defines “donation” as “the act of giving to a fund or cause” and alternatively as “a gift or grant.” The American Heritage Dictionary for the English Language 354 (4th ed.2006). Similarly, Webster’s Dictionary defines “donation” as “the act of giving or bestowing” and “that which is given as a present.” Webster’s Revised Unabridged Dictionary 281 (6th ed.1996). Therefore, “donation” can be interpreted to mean either the act of giving or the gift itself.
Accordingly, as used in the Act, “per donation” may be interpreted, as it was by the majority, to refer to the gift, a conservation easement. However, it may also be interpreted to refer to the act of giving, in this context, the act of each individual tenant in common gifting his separate, fractional share of the easement. Therefore, each individually filing tenant in common (or in the present case, each married couple) could claim a credit of up to $100,000.
The majority ignores the fact that the term “donation” has alternative meanings and discusses the word as if it only refers to the gift of the easement itself, not the act of giving a share of the easement. Because the majority only addresses one of two alternative definitions of “donation,” I believe its conclusion that the term “per donation” is unambiguous is incorrect. Rather, I see the term as ambiguous and would therefore defer to the Department of Revenue’s 2003 interpretation of the Act.
*1164Regulation 39-22-522 (“the Regulation”) stated “The total credit generated by the donation of a perpetual conservation easement in gross by tenants in common is limited to $100,000.” 1 Colo.Code Regs. § 201-2,-Regulation 39-22-522(2)(e)(I) (2003).
When a statute is ambiguous, courts accord “great i deference to an agency’s interpretation of the statute.” Smith v. Farmers Ins. Exch., 9 P.3d 335, 340 (Colo.2000). Courts may only disregard an agency’s interpretation of a statute it is charged with enforcing when that interpretation is inconsistent with the clear language of the statute or the agency has exceeded the scope of the statute. See Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 844, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984); Colo. Dep’t of Revenue v. Woodmen of the World, 919 P.2d 806, 817 (Colo.1996). Similarly, subsequent agency action that contradicts previous agency action carries less weight than contemporaneous, consistent agency interpretations. Woodmen of the World, 919 P.2d at 817.
Respondent-taxpayers assert the Department’s interpretation of the statute is not entitled to deference for two reasons. First, they argue the Regulation was promulgated in response to the 2001 amendment of the Act and therefore does not apply to the 1999 version they donated the easement under. Second, they argue the Department has taken inconsistent positions with regard to its interpretation of the Act’s “per donation language” and the Regulation is therefore not entitled to deference. However, Respondent-taxpayer’s reasoning is flawed.
As discussed above, the Department’s interpretation of the Act is consistent with one possible interpretation of the “per donation” language and does not exceed the scope of the statute. While the General Assembly amended the Act in 2001, it does not appear that the Department’s interpretation related solely to the 2001 amendment. The 2001 amendment altered the Act to state partnerships, S corporations, and similar pass though entities that donate conservation easements as entities are limited to a total aggregate credit of $100,000. § 39-22-522(4)(b), C.R.S. (2001).
The Regulation stated “A credit is generated from the donation of a single perpetual conservation easement in gross.” 1 Colo. Code Regs. § 201-2, Regulation 39-22-522(2)(a)(I) (2003) (emphasis added). The “single” easement language suggests the Department viewed the “per donation” language as referring to the conservation easement itself, not the act of giving the easement. The reference to the “donation” of a “single” conservation easement is consistent with one of the possible interpretations of the original 1999 language of the Act. Therefore, even if the Department issued the Regulation in Response to the 2001 amendment of the Act, the Regulation applies to pre-amendment “donations” because the definition of “donation” has remained constant.
Finally, the Regulation is not inconsistent with earlier positions of the Department as argued by Respondent-taxpayers and found by the court of appeals. Prior to issuance of the Regulation, the Department had not taken a position as to whether tenants in common must split the $100,000 credit limit. The simple fact that the Department issued Respondent-taxpayers a refund based on their claimed donations does not establish an official endorsement of the Respondent-taxpayer’s interpretation of the tax laws.
After an initial acceptance of a tax return, the Department has four years to correct or audit a tax return. § 39-21-107(2), C.R.S. (2008). Therefore, the act of providing a refund based on a taxpayer’s claimed tax credits does not indicate any official review or decision related to the correctness of tax return. The refund payment merely constitutes a response to the tax return which the Department has up to four years to correct. Accordingly, the fact the Department initially provided refunds to Respondent-taxpayers based on their claimed donations and later issued notices of deficiency does not establish that the Department interpreted the statute in an inconsistent manner. Rather, it merely establishes that the Department provided returns based on Respondent-taxpayer’s claimed credits and, upon further review, determined the claimed credits to be incorrect.
*1165Accordingly, because I view the Act’s language limiting the available tax credit “per donation” to $100,000 as ambiguous, I would defer to the Department of Revenue’s interpretation of the statute. The Department’s interpretation is consistent with one meaning of the statute, is consistent with the statutory language of the 1999 Act under which Respondent-taxpayers donated the conservation easement, and does not represent inconsistent interpretations of the language. For these reasons, I believe the Department’s interpretation of the Act is entitled to deference. I accordingly concur only with the judgment of the majority.
I am authorized to state that Chief Justice MULLARKEY joins in this concurrence.