State Bd. of Equalization v. Jackson Hole Ski Corp.

• Decision Date: 22 May 1987
• Docket Number: No. 86-298,86-298
• Citation: 737 P.2d 350
• Parties: STATE BOARD OF EQUALIZATION; Wyoming State Tax Commission; Rudolph Anselmi, Reina Hakala and Shirley Wittler, in their official capacities as members of the State Tax Commission and State Board of Equalization, Appellants (Defendants), v. JACKSON HOLE SKI CORPORATION, a Wyoming corporation, Big Valley Corporation, d/b/a Grand Targhee Resort, Triangle X Ranch, Glenn Taylor, Ken Neal and Western Mountain Adventurers, Inc., d/b/a Teton Valley Ranch Camp, Inc., on behalf of themselves and other members of the Wyoming Outfitter's Association and other Wyoming members of the Dude Ranchers' Association, Appellees (Plaintiffs).
• Court: Wyoming Supreme Court

Page 350

737 P.2d 350

STATE BOARD OF EQUALIZATION; Wyoming State Tax Commission; Rudolph Anselmi, Reina Hakala and Shirley Wittler, in their official capacities as members of the State Tax Commission and State Board of Equalization, Appellants (Defendants), v. JACKSON HOLE SKI CORPORATION, a Wyoming corporation, Big Valley Corporation, d/b/a Grand Targhee Resort, Triangle X Ranch, Glenn Taylor, Ken Neal and Western Mountain Adventurers, Inc., d/b/a Teton Valley Ranch Camp, Inc., on behalf of themselves and other members of the Wyoming Outfitter's Association and other Wyoming members of the Dude Ranchers' Association, Appellees (Plaintiffs).

No. 86-298.

Supreme Court of Wyoming.

May 22, 1987.

A.G. McClintock, Atty. Gen., Peter J. Mulvaney, Deputy Atty. Gen., and Robert J. Walters, Asst. Atty. Gen., for appellants.

David R. Hansen, Jackson, for appellees.

Before BROWN, C.J., and THOMAS, CARDINE, URBIGKIT and MACY, JJ.

MACY, Justice.

Appellee Jackson Hole Ski Corporation brought an action in district court pursuant to the Uniform Declaratory Judgments Act, § 1-37-101 et seq., W.S.1977, seeking an interpretation of the Selective Sales Tax Act of 1937, § 39-6-401 et seq., W.S.1977, and a determination of the validity of rules and regulations adopted by appellants Wyoming State Tax Commission and State Board of Equalization. During the pendency of the proceedings, appellees Big Valley Corporation, Triangle X Ranch, Glenn Taylor, Ken Neal, and Western Mountain Adventurers, Inc. filed motions to intervene. The district court granted the motions and, after a trial to the court, entered judgment in favor of appellees.

We affirm.

Appellants raise the following issues on appeal:

"I. DO THE APPELLEES HAVE STANDING TO CHALLENGE THE RULES AND REGULATIONS OF THE APPELLANTS IN AN INDEPENDENT ACTION FOR DECLARATORY RELIEF IN THEIR CAPACITY AS VENDORS?

"II. HAVE APPELLEES FAILED TO STATE A CLAIM FOR WHICH RELIEF MAY BE GRANTED CONCERNING THE AVAILABILITY OF AN INDEPENDENT ACTION FOR DECLARATORY RELIEF TO CHALLENGE RULES AND REGULATIONS WHICH ARE NOT ACCOMPANIED BY AN OTHERWISE JUSTICIABLE CONTROVERSY BETWEEN THE PARTIES?

"III. IS APPELLANTS' CONSTRUCTION OF W.S. 39-6-404(a)(viii) UNREASONABLE OR CONTRARY TO LAW?

"IV. ARE APPELLANTS ESTOPPED FROM REQUIRING COLLECTION OF LAWFULLY DUE TAXES CONSIDERING INCONSISTENT INTERPRETATIONS OF THE RELEVANT STATUTES AND A LACK OF ENFORCEMENT OF TAXABLE TRANSACTIONS?"

On July 3, 1985, the revised Rules and Regulations of the Wyoming State Tax Commission were filed with the Secretary of State and included the following:

"Section 44. Admission Charges.

"(a) * * * [W]hen a park, grounds or outdoor facility is leased or rented or a concession is granted for the use thereof in whole or in part for any form of amusement * * *, the lessee shall collect the tax on the total amount paid for admission to all such places."

"Section 48. Resorts and Dude Ranches.

"(a) * * * Beginning January 1, 1986, all charges by resorts, dude ranches, hunting and fishing outfitters, float trip operators, ski resorts and similar vendors for sales of goods, services and admissions are taxable. Taxable sales include, but are not limited to, sales of meals, lodging, pack trips, float trips, guided trips, trail rides, admission to indoor and outdoor recreational facilities and sales of tangible personal property.

"(b) Charges for transporting persons by horseback, motor vehicle, helicopter, fixed-wing aircraft, ski lift, boat or raft for hunting, fishing, skiing, camping, or similar recreational purposes are taxable."

On December 24, 1985, appellee Jackson Hole Ski Corporation filed a complaint for declaratory and injunctive relief, alleging that the imposition of sales tax on the sales price paid for lift ticket services, alpine ski instruction services, summer sightseeing services, nordic ski school instruction services, and nordic and alpine ski guide services was in contravention of the authority granted appellants in the Selective Sales Tax Act of 1937. Appellees requested an order declaring the rules null and void and enjoining appellants from imposing a tax on the sales price paid for such services.

Thereafter, appellee Big Valley Corporation filed a motion to intervene in the action pursuant to Rule 24(b), W.R.C.P. In its complaint, Big Valley Corporation also alleged that the imposition of sales tax on lift ticket services exceeded the authority granted to appellants in the Selective Sales Tax Act of 1937. The district court granted the motion to intervene on April 1, 1986. On May 19, 1986, appellees Triangle X Ranch, Glenn Taylor, Ken Neal, and Western Mountain Adventurers, Inc., on behalf of themselves and other members of the Wyoming Outfitter's Association and other Wyoming members of the Dude Ranch Association of the Western States, also filed a motion to intervene. In their complaint of intervention, they alleged that appellants did not have authority to impose sales tax on the entire sales price paid for hunting guide services, for river guide services, or for horse trip, pack trip, or back packing guide services. Appellants filed a consent to intervention, and, on May 21, 1986, the district court entered an order granting leave to intervene.

On July 21, 1986, appellees filed a motion seeking an order preliminarily and permanently enjoining appellants from imposing sales tax on the sales price paid for the services described in their complaints. Appellees also moved to consolidate the hearing on the motion for injunction with the trial on the merits. The district court granted the motion to consolidate and set the matter for trial.

Upon consideration of the testimony and other evidence presented, the district court found that the Selective Sales Tax Act of 1937 did not authorize the imposition of sales tax upon the sales price paid for the services set forth in appellees' complaints and, consequently, that the provisions of §§ 44 and 48, Chapter III of the Rules and Regulations of the Wyoming State Tax Commission were null and void. An order permanently enjoining appellants from promulgating, adopting, or enforcing any rule imposing sales tax on such services was filed September 30, 1986.

I

Appellants claim that appellees lacked standing to challenge the Rules and Regulations of the Wyoming State Tax Commission for the reason that they demonstrated no threatened or actual injury or legally protectable and tangible interest adversely affected by the Rules and Regulations of the Wyoming State Tax Commission. In support of their claim, appellants cite Stagner v. Wyoming State Tax Commission, Wyo., 682 P.2d 326 (1984), wherein this Court held that the incident of a tax is on the purchaser, not on the seller. Because appellees are the sellers of the services described above, appellants argue that the incident of the tax is not on them, and consequently they have no legally protectable and tangible interest affording them standing to challenge the Rules and Regulations of the Wyoming State Tax Commission.

While it is true that the legal incident of the tax falls on the purchaser, it does not follow that appellees, as sellers, have no legally tangible and protectable right adversely affected by the adoption of §§ 44 and 48 of the Rules and Regulations of the Wyoming State Tax Commission.

The following statutory provisions are relevant:

Section 39-6-407(a), W.S.1977.

"Except as otherwise provided every vendor shall collect the tax imposed by this article and is liable for the entire amount of taxes imposed." (Emphasis added.)

Section 39-6-409, W.S.1977.

"(a) * * * If the amount paid exceeds that which is due the excess shall be credited against any subsequent liability of the vendor. If the amount paid is less than the amount due, the difference together with interest thereon at the rate of one percent (1%) per month from the time the return was due shall be paid by the vendor within ten (10) days after notice and demand is made by the board.

* * *

* * *

"(d) The board may require any vendor to deposit with it such security as it deems sufficient to cover any tax, interest or penalty whenever it deems it necessary to insure compliance with the provisions of this article. * * *

"(e) When the board has reason to believe the collection of any tax, penalty or interest will be jeopardized by delay it shall immediately levy a jeopardy assessment and the amount assessed shall be immediately due and payable. Notice of the assessment shall be given to the vendor personally or by mail. If the jeopardy assessment is not paid within ten (10) days after the service of notice upon the vendor, the deficiency penalty and interest provided in subsection (c) of this section shall attach to the amount of the jeopardy assessment." (Emphasis added.)

Section 39-6-410, W.S.1977.

"(a) Any tax due under this article constitutes a debt to the state from the persons who are parties to the transaction and is a lien from the date due on all the property of those persons. The tax due together with interest, penalties and costs may be collected by appropriate judicial proceedings or the board may seize and sell at public auction so much of the persons' property as will pay all the tax, interest, penalties and costs. * * *

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* * *

"(d) Upon request of the board, the attorney general may institute proceedings to restrain and enjoin any person from:

* * *

* * *

"(ii) Continuing to act as a vendor if they have not remitted to the board, when due, all taxes, penalty and interest imposed by this article." (Emphasis added.)

Pursuant to these provisions, imposition of the tax in the present case imposes on appellees the legal duty to charge and collect the tax, subjects them to personal liability for the tax, and allows the State Board of Equalization to enjoin them from doing business if the tax is not paid. There simply is no question that appellees have a legally protectable and tangible interest affording them...