Grand Canyon Dories v. Idaho State Tax Com'n, 20117

• Decision Date: 23 June 1993
• Docket Number: No. 20117,20117
• Citation: 124 Idaho 1,855 P.2d 462
• 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
• Court: Idaho Supreme Court

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.

[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.

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 simultaneously appealed from the district court's order, which in part, affirmed the BTA's dismissal and from the order which ruled on the merits. It is clear that in granting GCD's motion for reconsideration, the district court was required to vacate its initial order.

The initial order not only affirmed the BTA's dismissal, but also held that the district court did not have jurisdiction because GCD's petition was untimely. It is axiomatic that a court may not rule on the merits of a case once it determines it does

                [124 Idaho 4] not have jurisdiction.  Thus, by implication, the district court ruled it had jurisdiction when it ruled on the merits of GCD's appeal.  To do so the court was required to vacate its initial ruling. 2  As a result of the district court vacating its order, there was no final judgment from which GCD could have appealed.  I.A.R. 11(a)(1).  We therefore reject the Commission's argument that the district court was precluded by the law of the case from remanding the first notice of tax deficiency back to the BTA because GCD failed to appeal from what we have determined to be a non-appealable order
                

III. THE DISTRICT COURT PROPERLY AFFIRMED THE BTA'S DISMISSAL OF THE SECOND NOTICE OF DEFICIENCY

GCD raises a number of issues in arguing the district court erred in affirming the BTA's dismissal of the second notice of deficiency by misapplying I.C. § 63-3049. GCD first argues that I.C. § 63-3632 and not I.C. § 63-3049 govern appellate review of a sales tax deficit determination. I.C. § 63-3632(a), in part, provides that within thirty days of the date upon which the notice of redetermination is mailed or served, "the taxpayer may, at his option, file an appeal with the board of tax appeals or may file a complaint with the district court in accordance with the provisions of section 63-3049, Idaho Code...." I.C. § 63-3049(a), in part, provides that "[i]n the case of sales or use tax and corporate income tax decisions by the state tax commission, when the amount in dispute at the time the notice of deficiency determination/overassessment is issued exceeds twenty-five thousand dollars ($25,000), no appeal to the board of tax appeals shall be allowed." GCD argues that its original appeal to the BTA was governed only by I.C. § 63-3632 which does not mention a jurisdictional limit of $25,000.00. We disagree.

Statutes which are in pari materia are to be construed together to effect legislative intent. Union Pac. R.R. v. Board of Tax Appeals, 103 Idaho 808, 811, 654 P.2d 901, 904 (1982). This rule was discussed in greater detail in Meyers v. City of Idaho Falls, 52 Idaho 81, 89-90, 11 P.2d 626, 629 (1932):

The rule that statutes in pari materia are to be construed together means that each legislative act is to be interpreted with other acts relating to the same matter or subject. Statutes are in pari materia when they relate to the same subject. Such statutes are taken together and construed as one system, and the object is to carry into effect the intention. It is to be inferred that a code of statutes relating to one subject was governed by one spirit and policy, and was intended to be consistent and harmonious in its several parts and provisions. For the purpose of learning the intention, all statutes relating to the same subject are to be compared, and so far as still in force brought into harmony by interpretation.

(Citations omitted.)

Idaho Code §§ 63-3049 and -3632 relate to the same subject matter, review of a determination by the State Tax Commission, and are therefore in pari materia. Construing these statutes together, it was clearly the intent of the legislature to limit an appeal to the BTA from a sales and use tax determination...