City of Sun Valley v. Sun Valley Co.

Decision Date16 April 1993
Docket NumberNos. 20136,20159,s. 20136
Citation123 Idaho 665,851 P.2d 961
PartiesThe CITY OF SUN VALLEY, a municipal corporation, Plaintiff-Respondent, v. SUN VALLEY COMPANY, an Idaho corporation, Defendant-Appellant. The CITY OF KETCHUM, Idaho, a municipal corporation, Plaintiff-Respondent, v. SINCLAIR OIL CORPORATION, a Wyoming corporation, dba Sun Valley Company, Defendant-Appellant. IDAHO STATE TAX COMMISSION and State of Idaho, Plaintiffs-Intervenors, Respondents, v. SINCLAIR OIL CORPORATION, a Wyoming corporation, dba Sun Valley Company, Defendant-Appellant.
CourtIdaho Supreme Court

Elam, Burke and Boyd, Chartered, Boise, for defendant-appellant Sinclair Oil Corp. Carl P. Burke (argued).

Kneeland, Korb, Collier, Legg & Haukaas, Ketchum, for plaintiff-respondent City of Sun Valley. Bruce J. Collier (argued).

Hawley, Troxell, Ennis & Hawley, Boise, for plaintiff-respondent City of Ketchum. Richard G. Smith (argued).

Larry EchoHawk, Idaho Atty. Gen., Carl E. Olsson, Deputy Atty. Gen., Boise, for plaintiff-respondent Idaho State Tax Com'n and State. Carl E. Olsson (argued).

TROUT, Justice.

I. BACKGROUND AND PRIOR PROCEEDINGS

The City of Sun Valley (Sun Valley) originally filed this action for declaratory judgment against Sinclair Oil Corporation (Sinclair), owners of Sun Valley ski area, to determine if receipts for the sale of lift tickets are taxable under the sales tax provisions of I.C. § 63-3612. The City of Ketchum (Ketchum) and the Idaho State Tax Commission (ISTC) subsequently joined the action to determine Sinclair's responsibility to collect and remit taxes.

Sun Valley ski area consists of skiing facilities on Bald Mountain and Dollar Mountain near the cities of Ketchum and Sun Valley. As "resort cities" under I.C. § 50-1044, Ketchum and Sun Valley have the authority to impose municipal sales taxes. However, this authority is limited to sales which are subject to taxation under chapter 36, title 63 of the Idaho Code. I.C. § 50-1046(c).

Both parties submitted evidence in a hearing before the trial court. Sinclair presented evidence that it leases the land on Bald Mountain under a special use permit from the United States Forest Service. As a condition of this permit, Sinclair cannot charge for entry into the ski area and has no authority to remove individuals from the slopes or ski areas. Although Sinclair owns land on Dollar Mountain, Sinclair does not charge for entry onto this land either.

Sinclair operates the ski area on Bald Mountain under a term special use permit from the Forest Service. Under this permit, Sinclair is allowed to operate chairlifts, lodges, and rental shops among other facilities on Bald Mountain. This permit defines chairlifts as "uphill transportation facilities."

Testimony at the hearing revealed that the vast majority, over ninety-nine percent, of those who purchase lift tickets, do so for the purpose of skiing or snow boarding down the mountainside. A small number of individuals, less than one percent of all those purchasing lift tickets, purchase "foot traffic" lift tickets for purposes such as sightseeing or use of the restaurants. Less than one percent of the skiers hike up the ski slopes and ski down, without ever buying a lift ticket.

The evidence presented at the hearing also illustrated several instances in which purchasing a lift ticket was equated with the act of skiing. For example, Sinclair will revoke lift tickets from skiers for dangerous or reckless skiing. Sinclair sometimes refunds the cost of lift tickets to skiers who injure themselves on the slopes early in the day because these individuals are no longer able to ski. Under a program employed by Sinclair entitled "Kids Ski Free," children received free lift tickets as part of a promotion allowing them to ski at no cost.

After presenting evidence and testimony at the hearing, the parties brought cross motions for summary judgment. The trial court found that lift tickets were taxable under the plain meaning of I.C. § 63-3612(f) as "[r]eceipts from the use of or the privilege of using tangible personal property or other facilities for recreational purposes." The trial court also found that lift tickets were taxable under the clear language of section (e) of the statute as "[a]dmissions charges." The trial court did not consult legislative history or the ISTC regulations because it found that the statute was clear and unambiguous.

The trial court granted summary judgment in favor of the ISTC, and an interlocutory order in favor of Ketchum and Sun Valley. Sinclair appealed from the summary judgment in favor the Idaho State Tax Commission. This Court then granted Sinclair's motion to appeal the interlocutory order involving Ketchum and Sun Valley and consolidated the appeal.

II. WHERE A STATUTE IS CLEAR AND UNAMBIGUOUS ON ITS FACE, A COURT NEED NOT CONSULT LEGISLATIVE HISTORY OR AGENCY REGULATIONS

As a preliminary issue, we must resolve when it is appropriate for a court to consult legislative history and administrative regulations in construing a statute. The trial court was correct in finding that where the language of a statute is unambiguous, there is no need to consult extrinsic evidence. We have consistently held that where statutory language is unambiguous, legislative history and other extrinsic evidence should not be consulted for the purpose of altering the clearly expressed intent of the legislature. Sweeney v. Otter, 119 Idaho 135, 138, 804 P.2d 308, 311 (1990); Moses v. Idaho State Tax Comm'n, 118 Idaho 676, 678, 799 P.2d 964, 966 (1990); Ottesen v. Board of Comm'rs of Madison County, 107 Idaho 1099, 1100, 695 P.2d 1238, 1239 (1985).

The most fundamental premise underlying judicial review of the legislature's enactments is that, unless the result is palpably absurd, the courts must assume the legislature meant what it said. Where a statute is clear and unambiguous the expressed intent of the legislature must be given effect.

State, Dep't of Law Enforcement v. One 1955 Willys Jeep, 100 Idaho 150, 153, 595 P.2d 299, 302 (1979). "Where the language is unambiguous, there is no occasion for the application of rules of construction." Sweeney v. Otter, 119 Idaho at 138, 804 P.2d at 311. (citations omitted) Furthermore, the court must follow express written language of the legislature over any agency regulations. Agency construction of a statute will not be followed if it contradicts the clear expressions of the legislature. J.R. Simplot Co., Inc. v. Idaho State Tax Comm'n, 120 Idaho 849, 862, 820 P.2d 1206, 1219 (1991).

However, in considering a statute where the intent of the legislature is not clear, a court may consider outside sources to determine the intent of the legislature. In Idaho State Tax Comm'n v. Haener Bros., Inc., 121 Idaho 741, 828 P.2d 304 (1992), we stated that a court may look beyond the literal wording of the statute to the public and private acts of the legislature in order to determine the intent of the legislature. Id. at 743, 828 P.2d at 306, citing Knight v. Employment Sec. Agency, 88 Idaho 262, 266, 398 P.2d 643, 645 (1965). Furthermore, where there is not a precise statutory answer, the court may give deference to an agency construction of a statute if (1) the agency has authority to administer that area of law; (2) the agency has made a reasonable construction of the statute; and (3) rationales underlying the rule of deference are present. J.R. Simplot Co., 120 Idaho at 862, 820 P.2d at 1219.

III.

LIFT TICKETS ARE NOT TAXABLE AS ADMISSIONS CHARGES UNDER I.C. § 63-3612(e)

The trial court found that lift tickets were taxable under the sales tax provisions of I.C. § 63-3612(e). This statute defines a sale as "any transfer of title, exchange or barter ... of tangible personal property for a consideration...." Section (e) includes as a sale: "admission charges." We do not agree with the trial court that I.C. § 63-3612(e) clearly and unambiguously applies to lift tickets.

In construing a statute, words of the statute should be given their plain, ordinary meaning. Walker v. Hensley Trucking, 107 Idaho 572, 691 P.2d 1187 (1984). The plain, ordinary meaning of "admission" is:

3a: an act of admitting: the fact of being admitted: permission or right to enter (as a place or a membership): ACCESS ... 4: price of entrance: fee paid at or for entering

Webster's Third New International Dictionary 28 (1986). Under this definition, we cannot say that the phrase "admissions charges" in section (e) clearly and unambiguously applies to a charge for lift tickets.

Since there is some ambiguity in the statute as it applies to this case, we may consult legislative history and the tax regulations 1 to discern the intent of the legislature. Idaho State Tax Comm'n v. Haener Bros., Inc., 121 Idaho at 123, 828 P.2d at 306. In considering the phrase "admissions charge" as used in I.C. § 36-6312(e), the legislature indicated an intent to tax admissions charges to places or events. The committee report states:

Admission charges to movies, concerts and football contests and other charges for admission to events or places are subjected to tax through definition as a "sale" by this section.... Charges made for furnishing transportation are not admission charges.

House Revenue and Taxation Comm. Report in support of House Bill 222, p. 11, 38th Leg. Session, (1965).

In interpreting I.C. § 63-3612(e), the tax regulations state:

The term "admissions" includes the right or privilege to enter into a place.... the amount paid for the right to use a reserved seat or any seat in any auditorium, theater, circus, stadium, school building, meeting house or gymnasium to view any type of entertainment is taxable. The right to use a table at a nightclub, hotel or roof garden is taxable whether such charge is designated as a cover charge, minimum charge or any such similar charge....

IDAPA Reg. 35.02.12,6.a.

Both the committee report and the regulations indicate an...

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