Court Opinion

ID: 8181021
Source: CourtListenerOpinion
Date Created: 2022-09-09 22:41:08.308987+00
Date Added: 2024-06-11T16:40:11.318043
License: Public Domain

MILLER, Justice,
dissenting:
My disagreement with the majority rests on its rewriting of the Tax Commissioner’s regulations. The majority’s Syllabus Point 1, which holds that “[ljabor provided on an hourly basis under open-ended contracts constitutes ‘service’ for the purposes of the West Virginia Business and Occupation Tax,” patently contradicts W.Va.Leg.Reg. (BOT) 11-10, Series XIII, §§ 1a.01(q)(5), 2e.05(a) (1974).1 The majority recognizes this fact when it remarks that the “regulations thus expanded the unit price concept beyond hourly labor in 1964, then eliminated it entirely in 1974, all with no change in the underlying statute.” 179 W.Va. at 89, 365 S.E.2d at 369. (Emphasis added).
The applicable statute which provides the basic definition of the term “contracting” for business and occupation tax purposes is *94W.Va.Code, 11-13-1.2 With regard to the definition of “contracting,” we said in Koppers Co., Inc. v. Dailey, 167 W.Va. 521, 525, 280 S.E.2d 248, 251 (1981), that “[i]t is difficult to imagine a more comprehensive definition of contract work nor to envision a project which involves the furnishing of work and material that would not come within this definition.”
Certainly, the general nature of the definition of “contracting” enables the Tax Commissioner to flesh out its details by way of regulations. Explicit statutory recognition of the right of the Tax Commissioner to issue regulations is found in W.Va.Code, 11-10-5(a). In Rowe v. W.Va. Dept. of Corrections, 170 W.Va. 230, 292 S.E.2d 650 (1982), we spoke to the right of administrative agencies to issue rules and regulations and concluded in Syllabus Point 3:
“It is fundamental law that the Legislature may delegate to an administrative agency the power to make rules and regulations to implement the statute under which the agency functions. In exercising that power, however, an administrative agency may not issue a regulation which is inconsistent with, or which alters or limits its statutory authority.”
See also Ney v. State Workmen’s Compensation Comm’r, 171 W.Va. 13, 297 S.E.2d 212 (1982); Anderson & Anderson Contractors, Inc. v. Latimer, 162 W.Va. 803, 257 S.E.2d 878 (1979).
The majority tediously traces the various regulations issued by former tax commissioners which attempted to distinguish between “contracting” and “service” work. This is presumably done to buttress its conclusion that an hourly labor charge on open-ended contract work must fall under the “service” category of the business and occupation tax.
The fact that various tax commissioners have amended the tax regulations in an attempt to delineate the difference between “contracting” and “service” work does not give rise to any conclusion that one series of regulations is to be preferred over another. So long as the current regulations do not conflict with the express language of the tax statute, they should be deemed to be valid.
I know of no rule of law that forecloses a tax commissioner from amending regulations which may have the effect of increasing coverage of the contracting category so long as the regulation comports with the statutory language. The majority suggests this is wrong “absent either a change in the statute or a showing that long-standing prior [administrative] interpretation was contrary to the existing statute.” 179 W.Va. at 91, 365 S.E.2d at 371. Nothing is cited to support this proposition mainly because the law is to the contrary. An administrative agency may alter its regulations to correctly reflect the law. See, e.g., Automobile Club of Michigan v. Commissioner, 353 U.S. 180, 183-84, 77 S.Ct. 707, 710, 1 L.Ed.2d 746, 750 (1957); Blair v. Estate of Biggins, 356 N.W.2d 551 (Iowa 1984); Oral Roberts University v. Oklahoma Tax Commission, 714 P.2d 1013 (Okl.1985); Realty Group, Inc. v. Department of Revenue, 299 Or. 377, 702 P.2d 1075 (1985); 2 Am.Jur.2d, Administrative Law § 310 (1962). An administrative agency by enacting a particular set of regulations does not exhaust its power to alter or amend them. International Union v. Michigan Civil Service Comm’n, 57 Mich.App. 526, 226 N.W.2d 550 (1975).
I can only endorse the majority’s statement that it is “not equipped to map out comprehensive regulations,” but I suggest that is what the majority has done. It is extremely simplistic to hold that “[l]abor provided on an hourly basis under open-ended contracts constitutes ‘service’ for purposes of the West Virginia Business and Occupation Tax,” as is done in Syllabus Point 1. This standard is so loose that it can easily be manipulated to convert the *95labor component of any contract to a “service” category.
I,therefore, respectfully dissent.
McGRAW, C.J., joins MILLER, J., in this dissent.

. The relevant portion of the regulation is:
“Persons engaged in the contracting business shall report the entire gross income under the contracting classification, regardless of whether the contract is a turnkey contract, lump sum contract, per unit contract, cost plus fixed fee contract, or other contracts having a similar basis. Gross income received from a contracting activity must be reported under the contracting classification and the manner of performance, basis of determining cost, fee or income or form of contract shall not alter the definition of contractor or of contracting and shall not change the taxability of such income from the contracting classification to another classification. A contracting activity remains a contracting activity regardless of what the parties may name it and regardless of the manner in which the parties may make payment and perform the work.”

. W.Va.Code, 11-13-1, in pertinent part, provides: "‘Contracting’ shall include the furnishing of work, or both materials and work, in the fulfillment of a contract for the construction, alteration, repair, decoration or improvement of a new or existing building or structure, or any part thereof, or for the alterration, improvement or development of real property.”