Grand Canyon Dories v. Idaho State Tax Com'n, No. 20117

• Court: United States State Supreme Court of Idaho
• Writing for the Court: TROUT; McDEVITT, C.J., BISTLINE and JOHNSON, JJ., and McDERMOTT
• Citation: 124 Idaho 1,855 P.2d 462
• Docket Number: No. 20117
• Decision Date: 23 June 1993
• Parties: GRAND CANYON DORIES, Petitioner-Appellant on Appeal, Cross-Respondent on Appeal, v. IDAHO STATE TAX COMMISSION, Respondent-Respondent on Appeal, Cross-Appellant on Appeal. Boise, March 1993 Term

Page 462

855 P.2d 462 124 Idaho 1 GRAND CANYON DORIES, Petitioner-Appellant on Appeal, Cross-Respondent on Appeal,
v.
IDAHO STATE TAX COMMISSION, Respondent-Respondent on Appeal, Cross-Appellant on Appeal. No. 20117. Supreme Court of Idaho, Boise, March 1993 Term.
June 23, 1993.

Page 463

[124 Idaho 2] Ringert Clark Chartered, Boise, for petitioner-appellant on appeal and cross-respondent on appeal. James G. Reid, argued.

Hon. Larry J. EchoHawk, Idaho Atty. Gen., Lawrence G. Sirhall, Jr., Deputy Atty. Gen., Boise, for respondent-respondent on appeal and cross-appellant on appeal. Lawrence G. Sirhall, Jr., argued.

TROUT, Justice.

Grand Canyon Dories, Inc., (GCD), a California corporation operating a river guide operation in Idaho, appeals from an order of the district court affirming the dismissal of a tax deficiency assessment by the Board of Tax Appeals (BTA) on the ground that the amount in controversy exceeded the BTA's jurisdictional limit. The Idaho State Tax Commission (Commission) cross-appeals from the district court's remand of another tax deficiency assessment against GCD back to the BTA.

I.

BACKGROUND AND PRIOR PROCEEDINGS

On July 27, 1981, the Commission issued two notices of tax deficiency to GCD for the periods July 1, 1977 through June 30, 1978 (Period No. 1) and July 1, 1978 through December 31, 1980 (Period No. 2). In 1981, GCD moved the Commission for a redetermination of these notices along with three other notices of tax deficiency.

On November 2, 1987, the Commission canceled the three other notices of tax deficiency but approved the notices of deficiency for Period No. 1 and Period No. 2. The deficiency determination for Period No. 1 is comprised of $4,126.00 in sales and use tax, $4,068.00 in interest and $206.00 in penalty for a total of $8,400.00. The deficiency determination for Period No. 2 is comprised of $19,622.00 in sales and use tax, $17,137.00 in interest and $981.00 in penalty for a total of $37,740.00 ¹. GCD appealed the Commission's determination to the BTA which dismissed GCD's appeal on the ground that the amount in dispute exceeded its jurisdictional limit of $25,000.00.

GCD thereafter petitioned the district court to review the decision of the BTA to dismiss its appeal. The district court granted the Commission's motion for summary judgment and affirmed the BTA's dismissal of GCD's appeal. The district court held that as a result of GCD improperly appealing to the BTA, the court did not have jurisdiction because GCD's petition to the district court was now untimely. GCD filed a motion for reconsideration which the district court granted ruling it would be equitable to allow GCD to proceed as if GCD initially appealed the Commission's redetermination directly to the district court. The district court allowed GCD to file what the court styled an amended complaint.

Page 464

[124 Idaho 3] Following a trial, the district court affirmed the Commission's imposition of delinquent taxes and entered judgment in the amount of $46,140.00 ($8,400.00 for Period No. 1 and $37,740.00 for Period No. 2). GCD appealed to this Court which held that the district court did not have jurisdiction to review the Commission's determination of GCD's tax deficiency. Grand Canyon Dories, Inc. v. State Tax Comm'n, 121 Idaho 515, 826 P.2d 476 (1992):

In granting GCD's motion for reconsideration, the district court attempted to treat GCD's appeal to the [BTA] as the filing of a complaint with the district court. In effect, the district court extended the time within which GCD might file a complaint with the district court for a review of the Commission's redetermination. The district court did not have jurisdiction to do so.

121 Idaho at 516, 826 P.2d at 477.

This Court vacated the district court's order determining the deficiency amount owed by GCD and remanded the case back to the district court "for any further proceedings that are appropriate." Id. at 517, 826 P.2d at 478. GCD thereafter renewed its motion for reconsideration of the district court's grant of summary judgment. The district court ruled that in considering GCD's initial petition, it had erred in lumping the two notices of deficiency together and that pursuant to I.C. § 63-3632(c), the amount of any proposed deficiency, for purposes of the jurisdictional amount, included interest but not penalties. The district court remanded the first notice of deficiency to the BTA since the deficit amount was less than $25,000.00 and upheld the BTA's dismissal of the second notice of deficiency since the deficit amount was greater than $25,000.00.

GCD now appeals arguing the district court erred in affirming the BTA's dismissal of the second notice of deficiency by misapplying I.C. § 63-3049. The Commission cross-appeals arguing the law of the case precluded the district court from remanding the first notice of deficiency back to the BTA.

II.

THE LAW OF THE CASE DID NOT PRECLUDE THE DISTRICT COURT FROM REMANDING THE FIRST NOTICE OF DEFICIENCY BACK TO THE BTA

We first examine the Commission's argument that the law of the case precluded the district court from remanding the first notice of deficiency back to the BTA. In its decision granting the Commission's motion for summary judgment, the district court held that the BTA properly dismissed GCD's appeal for lack of jurisdiction and the district court did not have jurisdiction to consider GCD's petition since it was untimely. Following its grant of GCD's motion for reconsideration, the district court rendered a decision on the merits adverse to GCD. The Commission argues that at this point, a two part judgment existed: (1) the ruling affirming the BTA's dismissal and (2) the ruling on the merits. The Commission contends GCD only appealed from the ruling on the merits, and therefore, GCD's failure to appeal from the first part of the judgment affirming the BTA's dismissal precluded the district court from reconsidering this ruling on remand since the law of the case prohibits courts from considering errors on a second appeal which arose prior to the first appeal and which could have been raised as issues in the earlier appeal. See Capps v. Wood, 117 Idaho 614, 618, 790 P.2d 395, 399 (Ct.App.1990).

We do not agree with the Commission's contention that GCD could have...