State Bd. of Equalization v. Wyoming Auto. Dealers Ass'n

• Decision Date: 20 October 1964
• Docket Number: No. 3313,3313
• Parties: The STATE BOARD OF EQUALIZATION of the State of Wyoming, Roy E. Kane, as County Assessor of Laramie County, and Paul Groesbeck, as Treasurer of Laramie County, Appellants (Defendants below), v. WYOMING AUTOMOBILE DEALERS ASSOCIATION, a Wyoming corporation on behalf of its dealer members, and Tyrrell Chevrolet Company, a Wyoming corporation, Appellees (Plaintiffs below).
• Court: Wyoming Supreme Court

Page 741

395 P.2d 741

The STATE BOARD OF EQUALIZATION of the State of Wyoming, Roy E. Kane, as County Assessor of Laramie County, and Paul Groesbeck, as Treasurer of Laramie County, Appellants (Defendants below), v. WYOMING AUTOMOBILE DEALERS ASSOCIATION, a Wyoming corporation on behalf of its dealer members, and Tyrrell Chevrolet Company, a Wyoming corporation, Appellees (Plaintiffs below).

No. 3313.

Supreme Court of Wyoming.

Oct. 20, 1964.

John F. Raper, Atty. Gen., A. Fred Miller, Special Asst. Atty. Gen., John W. Pattno, Laramie County & Prosecuting Atty., Cheyenne, for appellants.

Brooke Wunnicke and A. Joseph Williams, of Williams, Wunnicke & Fennell, Cheyenne, for respondents.

Before PARKER, C. J., and HARNSBERGER, GRAY, and McINTYRE, JJ.

Mr. Justice McINTYRE delivered the opinion of the court.

This case concerns the contention of automobile dealers that they are exempt from the payment of any tax on that part of their inventories consisting of new and used motor vehicles, because of the provision in § 31-14, W.S.1957, to the effect that registration fees imposed upon motor vehicles and upon the owners thereof shall be in lieu of all other taxes.

Upon the complaint of Wyoming Automobile Dealers Association and Tyrrell Chevrolet Company the district court granted a permanent injunction against tax officials of the state and Laramie County, restraining them from the assessment and collection of an inventory tax upon new and used motor vehicles held by automobile dealers for sale. The defendant-officials have appealed seeking a reversal and dissolution of the injunction.

Without discussing that portion of the argument made by appellee-dealers that the legislature has power to exempt them from the payment of an inventory tax, we will say at the outset we are of the opinion it has not done so.

It is unnecessary in this case to inquire whether § 31-14 is constitutional because the very exemption claimed by appellees is predicated upon that section. If it is not a valid enactment, no exemption could be claimed in any event. Furthermore, appellants do not question the validity of the law. Instead, they take the position that under any reasonable interpretation the statute fails to grant the claimed exemption.

The pertinent provisions of the inventory-tax statute (§ 39-79, W.S.1957), from which plaintiffs are claiming an exemption, are these:

'Any person owning or having in his possession or control, within this state * * * any personal property purchased either in or out of this state, with a view of being sold at an advance price or profit * * * shall be held to be a merchant for the purposes of this act; such property shall be listed for taxation, and in estimating the value thereof, the merchant shall take the average value of such property in his possession, or control, during the year next previous to the time of listing * * *.'

The pertinent provisions of § 31-14, under which automobile dealers claim to be exempt from inventory taxes, are as follows:

'The state registration and county registration fees, imposed by this act, upon motor vehicles * * * and upon the owners thereof by reason of such ownership, shall be in lieu of all other taxes, * * * provided * * * that this section shall not be so construed as to exempt from ad valorem taxes any such motor vehicles * * * in process of manufacture or held in storage. * * *'

As both these statutes refer to owners of personal property, they must be considered pari materia and therefore be read together in order to ascertain their respective meanings and the whole of legislative intent.

A holding against the exemption asserted is in keeping with fundamental rules of taxation. We mention two of them:

First, exemptions are not favored and generally taxation is held to be the rule and exemption the exception, which means there is a presumption against a grant of exemption and in favor of the taxing power. Appeal of Chicago & North Western Ry. Co., 70 Wyo. 84, 246 P.2d 789, 795, rehearing denied 70 Wyo. 119, 247 P.2d 660; State Tax Commission v. Graybar Electric Company, Inc., 86 Ariz. 253, 344 P.2d 1008, 1012; Cornell College v. Board of Review of Tama County, 248 Iowa 388, 81 N.W.2d 25, 26. See also 84 C.J.S. Taxation § 225, pp. 431-432.

Second, exemption from taxation is a privilege personal to the grantee and in the absence of an express provision therefor will not pass to a person taking the property by sale. Preparatory Training Institute v. City of Trenton, 19 N.J.Misc. 543, 22 A.2d 5, 6; Stark v. Kreyling, 207 Ind. 128, 188 N.E. 680, 681. See Appeal of Woods Schools, 406 Pa. 579, 178 A.2d 600, 603; and also 84 C.J.S. Taxation § 236, p. 453.

The language employed in § 31-14, construed in the light of these rules and particularly in the light of the second, seems to limit the exemption from all other taxes to the owner upon whom registration fees have been imposed, he only being the grantee of the exemption. Such exemption cannot pass to a vendee or other owner, whether he be a dealer or some other person. In the case of a purchaser who is not a dealer, he of course makes a registration and he thereby obtains exemption from other taxes. See Ch. 12, § 1, S.L. of Wyoming 1963.

Section 13-14 provides that state registration and county registration fees, 'imposed by this act,' upon motor vehicles and upon the owners thereof, shall be in lieu of all other taxes. The act referred to was originally Ch. 122, S.L. of Wyoming 1929....