Browning-Ferris Industries v. Wi Dept. of Revenue
| Decision Date | 28 June 2001 |
| Docket Number | 00-3091 |
| Parties | This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports. A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See Wis. Stat. §808.10 and Rule 809.62. Browning-Ferris Industries of Wisconsin, Inc., Petitioner-Appellant, v. Wisconsin Department of Revenue, Respondent-Respondent.STATE OF WISCONSIN IN COURT OF APPEALS DISTRICT IV |
| Court | Wisconsin Court of Appeals |
APPEAL from an order of the circuit court for Dane County: MARYANN SUMI, Judge. Affirmed.
Before Dykman, P.J., Vergeront and Roggensack, JJ.
¶1.
This appeal concerns the interpretation of Wis. Stat. §77.54(26m) (1999-2000),1which exempts from Wisconsin sales and use tax certain waste reduction and recycling machinery and equipment. The Tax Appeals Commission decided that Browning-Ferris Industries, Inc.'s compactors, bins, and containers, which the company purchased and which were used by its customers to reduce the size of or to collect disposed items, and motor vehicles and related items used to transport waste and recyclables were not exempt under subsec.(26m).2 The circuit court affirmed that decision. Browning-Ferris appeals, contending that these items are exclusively and directly used in waste reduction activities and are therefore exempt. We conclude the commission's interpretation is entitled to at least due deference, and, applying that standard of we review, we conclude the commission's interpretation is reasonable and Browning-Ferris has not offered one that is more reasonable. Therefore, we affirm.
¶2. The commission made the following factual findings based on stipulated facts. Browning-Ferris was primarily engaged in the business of collecting discarded materials from its Wisconsin residential and commercial customers and transporting those discarded materials to landfills, recycling centers or material recycling facilities. The types of items collected and hauled included trash, garbage, and recyclables. Browning-Ferris hauled waste products with no value to landfill sites for disposal. Browning-Ferris hauled recyclables that could be reused in some capacity to recycling centers and material recycling facilities, not to landfills. Separate bins and trucks were used to collect and transport recyclable items from those used to collect and transport non-recyclables.
¶3. Browning-Ferris leased or sold compactors to some of its customers. It also provided its customers, without additional charge, with bins, dumpsters, and containers. The customers deposited their recyclable items in bins, dumpsters, and containers that were specifically labeled to collect recyclable items, and their non-recyclable waste items in dumpsters that were specifically labeled to collect waste materials. Browning-Ferris picked up and transported the recyclable items to either recycling centers or material recycling facilities and the non-recyclable items to landfills.
¶4. The tangible personal property items at issue are these compactors, bins, and containers, and motor vehicles3 used to transport recyclables to processing facilities, as well as various related items. Browning-Ferris paid no sales or use tax when purchasing this tangible personal property.
¶5. The Wisconsin Department of Revenue (DOR) issued a Notice of Field Audit Action and a Notice of Amount Due against Browning-Ferris, assessing sales and use tax, plus interest, on the disputed items for the period October 1, 1989 through September 30, 1993. Browning-Ferris filed a petition for redetermination objecting to the assessment, and when that was denied, it filed a petition for review with the commission.
¶6. In its decision affirming the assessment, the commission referred toDOR v. Parks-Pioneer Corp., 170 Wis. 2d 44, 487 N.W.2d 63 (Ct. App. 1992), in which we focused on the language in Wis. Stat. §77.54(26m) that the waste reduction and recycling machinery or equipment be "exclusively and directly used for recycling activities." We held that the lugger and roll-off boxes Parks-Pioneer used to collect scrap metal from its suppliers' premises, to transport it to its premises, and to deliver the recycled metal to its customers were used exclusively for recycling activities; but, we held, they were not "directly" used for recycling activities since they did not perform an "integral function" in the recycling activities. We reasoned that the scrap metal was recycled after it was collected and transported in those boxes.
¶7. In its decision the commission pointed out that it had relied onParks-Pioneer in Ruef's Sanitary Serv., Inc. v. DOR, Wis. Tax. Rep. ¶400-064, 30, 216 (1994). In Ruef's, the commission concluded that curb-sorters mounted on motor vehicles and used to collect, sort, and transport recyclable materials did not perform an "integral function" in recycling activities, and therefore were not used "directly" for recycling.
¶8. The commission reasoned that Browning-Ferris's bins and storage containers do not perform an integral function in recycling activities because they are simply receptacles into which recyclable and waste materials are placed before Browning-Ferris collects those materials and transports them to a facility where the recycling actually occurs. Similarly, the commission reasoned that the compactors and motor vehicles failed the integral function test because the materials were recycled after they had been compressed in the compactor and were transported to the recycling facility by Browning-Ferris vehicles.
¶9. The commission also rejected Browning-Ferris's argument that the disputed items were used exclusively and directly in waste reduction activities because, it stated, the statute applies only to waste reduction or recycling activities that "reduce the amount of solid waste generated, reuse solid waste, recycle solid waste, compost solid waste or recover energy from solid waste." The commission concluded that neither the compactors nor the other types of disputed items did any of these things. In particular, the commission stated, compressing solid waste does not reduce the amount of solid waste generated, but simply reduces the volume of solid waste already generated.
¶10. Browning Ferris appealed the commission's decision to the circuit court, which affirmed. The court decided that the commission's interpretation of the statute was entitled to due weight, and, applying that standard, it concluded that the interpretation of Wis. Stat. §77.54(26m) proposed by Browning-Ferris was not more reasonable than the commission's.
¶11. On appeal Browning-Ferris contends the commission erred because the bins, storage containers, compactors, and motor vehicles at issue are used directly in waste reduction activities. The proper definition of "waste reduction," it asserts, is "diminishment in the amount of refuse from people's homes." It further asserts that waste reduction includes the separation, collection, and processing of waste material, and that the disputed items are directly used in the separation, collection, and transportation to the landfill. Browning-Ferris emphasizes that waste reduction and recycling are distinct activities, and that Parks-Pioneer addressed only recycling activities.
¶12. In resolving this appeal, we review the decision of the commission, not that of the trial court. Zignego Co., Inc. v. DOR, 211 Wis. 2d 819, 824, 565 N.W.2d 590 (Ct. App. 1997). The threshold question is what degree of deference, if any, we give to the commission's interpretation of the statute. Although an agency's interpretation of a statute is a question of law and we are not bound by the agency's interpretation, we defer to an agency's interpretation of a statute in certain situations. Id. at 823. We give great weight when the following conditions are met:
(1) the agency was charged by the legislature with the duty of administering the statute; (2) that the interpretation of the agency is one of long-standing; (3) that the agency employed its expertise or specialized knowledge in forming the interpretation; and (4) that the agency's interpretation will provide uniformity and consistency in the application of the statute.
Id. (citing UFE Inc. v. LIRC, 201 Wis. 2d 274, 284, 548 N.W.2d 57 (1996)). When we give great weight, we will sustain a reasonable agency conclusion even if an alternative conclusion is more reasonable. Id.
¶13. We give due weight or due deference when the agency has some experience in an area, but has not developed the expertise that necessarily places it in a better position than a court to make judgments regarding the interpretation of the statute. Id. Under this test, we will not overturn a reasonable agency decision that comports with the purpose of the statute unless we determine that there is a more reasonable interpretation available. Id. at 823-24.
¶14. We review an agency's interpretation of a statute de novo only when the issue before the agency is clearly one of first impression, or when the agency's position on the issue has been so inconsistent as to provide no real guidance. Id. at 824.
¶15. Browning-Ferris contends that we should review the commission's decision de novo because the commission has never considered the waste reduction component of Wis. Stat. §77.54(26m). The commission responds that, at a minimum, the decision is entitled to due weight and that it may also properly be accorded great weight.
¶16. We agree with the commission and the circuit court that the commission's decision is entitled to at least due weight. The commission is charged by the legislature with hearing and determining all questions of law and fact arising under the tax statutes. Wis. Stat. §73.01(4)(a). The commission thus has considerable experience and specialized knowledge in interpreting and applying Wis. Stat. §77.54, and we are to give due weight to the experience,...
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