Airtouch Communications, Inc. v. DOR
Decision Date | 12 September 2003 |
Docket Number | No. 02-129.,02-129. |
Citation | 76 P.3d 342,2003 WY 114 |
Parties | AIRTOUCH COMMUNICATIONS, INC.; Wyoming RSA #3 (Cellular Inc., Network Corp.) Wyoming RSA #2 (Sheridan Limited Partnership); and Wyoming RSA #1 (Park Limited Partnership), Appellants (Petitioners), v. DEPARTMENT OF REVENUE, STATE OF WYOMING, Appellee (Respondent). |
Court | Wyoming Supreme Court |
Representing Appellants: Richard G. Smith of Hawley Troxell Ennis & Hawley LLP, Boise, Idaho; and W. Perry Dray and Gregory C. Dyekman of Dray, Thomson & Dyekman, P.C., Cheyenne, Wyoming.
Representing Appellee: Hoke MacMillan, Attorney General; John W. Renneisen, Deputy Attorney General; Martin L. Hardsocg, Senior Assistant Attorney General; and Cathleen D. Parker, Assistant Attorney General. Before HILL, C.J., and GOLDEN, LEHMAN, KITE, and VOIGT, JJ.
[¶ 1] Four cellular companies appealed from the Department of Revenue's (DOR) 1999 and 2000 valuations of their property contending they were not subject to state assessment as "telephone companies" and, in the alternative, the valuations were improper because the value of intangible property, exempt from taxation by statute, was not deducted. The State Board of Equalization (SBOE) affirmed the valuations finding cellular companies are "telephone companies" within the meaning of the statute and the companies failed to carry their burden of proving the value of their intangible property. We agree the companies are "telephone companies" under the statute. With respect to the valuation, we affirm in part, reverse in part, and remand for further consideration consistent with this opinion.
[¶ 2] The appellants present the following issues:
DOR frames the issues in the following manner:
[¶ 3] The Ad Valorem Division of DOR certifies the values of approximately sixty telephone companies to the county assessors on an annual basis. As provided by statute, all state assessed taxpayers are required to report the value of their property to DOR to facilitate the valuation and assessment process. DOR valued and assessed the cellular service providers pursuant to Wyo. Stat. Ann. § 39-13-102 (LexisNexis 2001), using a unitary approach to valuation which values all the assets of a "going concern" as opposed to the summation method which values individual assets and then sums the total. Four of the cellular companies objected to their 1999 and 2000 valuations. Those companies, the appellants in this case, were Airtouch Communications, Inc., which serves eastern and southeast Wyoming; Wyoming RSA # 3 (Cellular Inc., Network Corp.) which serves southwest Wyoming; Wyoming RSA # 2 (Sheridan Limited Partnership) serving the Sheridan area; and Wyoming RSA # 1 (Park Limited Partnership) serving the Cody area (collectively referred to hereafter as "taxpayers").
[¶ 4] After the issuance of the 1999 preliminary valuations, the taxpayers (exclusive of Airtouch) requested an informal conference with DOR appraisers to urge deduction of the value of intangible property. The taxpayers made this request despite the fact that they provided no information concerning those values either in the 1999 annual reports filed with DOR or during the informal conference. After the informal discussion and the taxpayers' submittal of limited additional information relating to equipment obsolescence, DOR issued revised final 1999 valuations which reduced the preliminary appraisals by ten percent to account for equipment obsolescence. The taxpayers (exclusive of Airtouch) appealed from the final 1999 valuations.
[¶ 5] In 2000, the taxpayers did not request an informal conference after receiving the preliminary valuations, and they did not provide DOR with information on the value of claimed exempt intangible property. The taxpayers (including Airtouch) appealed from the final 2000 valuations. The values as determined by DOR were as follows:
Taxpayer 1999 2000 Fair Market Value Fair Market Value Wyoming RSA # 1 $ 4,580,000 $ 4,569,000 Wyoming RSA # 2 $ 3,119,000 $ 6,254,000 Wyoming RSA # 3 $18,632,868 $23,438,896 Airtouch n/a $30,131,000
[¶ 6] The 1999 appeals were consolidated by SBOE on its own motion in March of 2000 without objection by the parties, and the hearing was originally scheduled for November 8, 2000. SBOE rescheduled the contested case hearing to June 25, 2001. Both parties then requested a continuance which SBOE granted, and the hearing was again rescheduled for October 8, 2001.
[¶ 7] In May 2001, over a year after the values were certified to the counties, the taxpayers provided independent appraisals performed by the accounting firm of Ernst and Young [EY] to DOR to support their arguments that the value of exempt intangible property was inappropriately used to enhance their taxable property valuations. At the hearing, SBOE refused to admit the EY appraisals to the extent the information contained therein was not available to DOR at the time of the assessment, finding SBOE's role at the contested case hearing was not to set value but instead was limited to determining whether DOR's methodology to value the taxpayers' property was supported by substantial evidence. The taxpayers' evidence established the following taxable values for their property:
Taxpayer 1999 2000 Wyoming RSA # 1 $ 3,345,271 $ 3,661,130 Wyoming RSA # 2 $ 2,852,941 $ 3,492,824 Wyoming RSA # 3 $15,654,412 $17,116,279 Airtouch n/a $20,458,472 [¶ 8] SBOE affirmed DOR's assessment and valuation of the taxpayers' property as telephone companies subject to § 39-13-102. The taxpayers appealed, and the district court certified the case to this Court pursuant to W.R.A.P. 12.09(b).
[¶ 9] When we review cases certified pursuant to W.R.A.P. 12.09(b), we apply the appellate standards which are applicable to the court of the first instance. Judicial review of administrative decisions is governed by Wyo. Stat. Ann. § 16-3-114(c) (LexisNexis 2001).1 Powder River Coal Company v. Wyoming State Board of Equalization, 2002 WY 5, ¶ 5, 38 P.3d 423, ¶ 5 (Wyo.2002). The threshold issue we must consider is whether the taxpayers were treated correctly by DOR as telephone companies pursuant to § 39-13-102(m)(vi). This is a question of statutory interpretation and hence one of law which we review de novo. Id. at ¶ 6. Similarly, the question of whether SBOE properly applied the statutory exemption for intangible property consistently with this Court's decision in RT Communications, Inc. v. State Board of Equalization for State of Wyoming, 11 P.3d 915 (Wyo.2000), is also a question of law to be reviewed de novo.
[¶ 10] We affirm an agency's conclusions of law when they are in accordance with the law. Powder River Coal Company, 2002 WY 5, ¶ 6, 38 P.3d 423. However, when the agency has failed to properly invoke and apply the correct rule of law, we correct the agency's error. Id. The rules of statutory interpretation also apply to the interpretation of administrative rules and regulations. Id. These rules are often cited and are well recognized:
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