Court Opinion

ID: 9746818
Source: CourtListenerOpinion
Date Created: 2023-08-27 14:39:20.804557+00
Date Added: 2024-06-11T07:25:17.281132
License: Public Domain

KITE, Chief Justice, dissenting,
in which VOIGT, Justice, joins.
[T19] I believe the Board erred by denying Sinclair's request for a refund of sales tax paid on the purchase of materials used to construct foundations for its hydrocracker and reformer. Consequently, I dissent.
[¶ 20] In Wyoming, excise taxes are levied on sales of tangible personal property. Wyo. Stat. Ann. § 89-15-108(a)(N(A). "Sale" is defined as the transfer of possession of personal property. Wyo. Stat. Ann. § 39-15-101(a)(vii). The legislature decided as an economic incentive to exempt from excise taxation the sale of machinery used predominately in manufacturing tangible personal property. Wyo. Stat. Aun. § 39-15-105(a){vii)(O ). Section 89-15-101(a)(xx) broadly defines "machinery" as including: "both the basic unit and any adjunct or attachment necessary for the basic unit to accomplish its intended function" and "the materials for the construction or repair of machinery."
[¶ 21] The parties seem to agree that the foundation materials fall within the definition of "machinery" and that, at the time of sale, the disputed items were tangible personal property. Nevertheless, the majority opinion concludes the materials do not qualify for the exemption because they were eventually embedded and thus became real property, as defined in § 39-15-101(a)(v)(A). The majority opinion ignores the fact that the tax (and, consequently, the exemption) is imposed at the time of sale under §§ 89-15-101(a)(vii) and 39-15-108(a)()(A), and looks, instead, at the ultimate disposition of the materials. All kinds of personal property can ultimately become part of a structure that meets the definition of real property; however, that does not mean those materials were not personal property at the time of purchase. The statute does not state that the availability of the exemption depends upon the eventual disposition of the materials.
[T22] By creating the requirement that in order to qualify for the exemption machinery can never be incorporated into real property, the Board and the majority opinion have added additional language into the statute. The omission of language by the legislature is considered to be intentional and we will not read language into a statute when the legislature has chosen not to include it. Morris v. CMS Oil and Gas Co., 2010 WY 37, ¶ 28, 227 P.3d 325, 333 (Wyo.2010).
[¶ 23] The legislature adopted § 39-15-105(a){viii) "as an economic incentive" to encourage manufacturing. The parties all agree that the hydrocracker and reformer qualified for the exemption and the foundations were necessary in order to operate those pieces of machinery. The legislature specifically drafted the exemption broadly so that all components of manufacturing machinery would be exempt, thus encouraging businesses to invest in such machinery. The purpose of the statute is not served by denying the exemption for materials used to complete the foundations necessary for the operation of the manufacturing machinery.
[¶ 24] Wyoming Dep't of Revenue v. Hanover Compression, LP, 2008 WY 138, 196 P.3d 781 (Wyo.2008), which was relied upon by the Board and cited by the majority opinion, does not further the analysis of whether excise tax was due on the materials. That case simply addressed whether compressor facilities were real property or per-somal property and, consequently, whether payments for operation and maintenance of the facilities were subject to sales tax. Id., ¶¶ 3-5, 196 P.3d at 783. It had nothing to do with determining the nature of the materials used to construct the facility. In fact, under the majority's reasoning, Hanover would require Sinclair to lose the exemption for the hydrocracker and reformer as well because they became real property when they were permanently affixed to the foundation. Like the compressors deemed to be real property in Hanover, ¶¶ 13-14, 196 P.3d at 786, the Board's findings in this case indicate that the hydrocracker and reformer were affized to the foundations and, therefore, became real property.
[T25] In order to remain true to the legislative intent, the nature of the property should have been determined at the time of *575sale. At that time, the materials were tangible personal property and qualified for the exemption under § 39-15-105(a)(viil)(O ). I would hold that the Board erred by concluding that Sinclair was not entitled to an exemption from the excise tax for the foundation materials.