State v. Superior Court for Maricopa County
| Decision Date | 11 June 1976 |
| Docket Number | No. 12617,KERR-M,P,No. 24,24,12617 |
| Citation | 113 Ariz. 248,550 P.2d 626 |
| Parties | STATE of Arizona, Tom Shirley, Apache County Supervisor, Arthur Lee, Apache County Supervisor, Larry Stradling, Apache County Supervisor, Avard Hall, Apache County School Superintendent, LaVere Connolly, Apache County Treasurer, and Chinle School Districtetitioners, v. SUPERIOR COURT of Arizona FOR MARICOPA COUNTY, Hon. Porter Murry, Visiting Judge of the Superior Court,cGEE CORP., a corporation, Real Party in Interest, Respondents. |
| Court | Arizona Supreme Court |
Bruce E. Babbitt, Atty. Gen., by Alan S. Kamin, Phoenix, for petitioners.
Evans, Kitchel & Jenckes, by Earl H. Carroll, Burton M. Apker, Joseph P. Hienton, Phoenix, for respondent Kerr-McGee.
Petitioners, by this special action, seek relief from a summary judgment of the Superior Court of Maricopa County which held that respondent Kerr-McGee Corporation's oil and gas leases were not subject to the ad valorem property tax imposed by A.R.S. § 42--227.04. We accepted jurisdiction pursuant to the authority of Article 6, § 5, Constitution of Arizona, which provides that the Supreme Court of Arizona has power to issue writs of review.
The facts are undisputed. Respondent Kerr-McGee is the lessee under certain gas and oil leases with the Navajo Indian Tribe, some of which are within the boundaries of Chinle School District No. 24, in Apache County, Arizona. The Arizona Department of Property Valuation assessed these leases at the value of $3,058,240.00, and taxes were levied against Kerr-McGee for state, county, school district, and other purposes in the total amount of $1,572,274.82 for the 1975 tax year. Kerr-McGee, pursuant to A.R.S. § 42--204(A), paid the first half of these taxes under protest and filed a complaint in the Superior Court of Apache County 1 to recover the taxes so paid. Kerr-McGee moved for summary judgment on its first claim, on the grounds that A.R.S. § 42--227.04 does not authorize taxation of leasehold interests in oil and gas rights. On March 22, 1976, the trial court entered an order granting the motion, declaring the tax levy illegal and void, and enjoining the further imposition and collection of the taxes.
Whether oil and gas leasehold interests are taxable under Arizona's statutes is the sole issue for determination.
By A.R.S. § 42--227.04, the Arizona Legislature has provided that:
'Producing oil and gas interests shall be listed, the valuation shall be determined and they shall be taxed individually as separate parcels of real estate separate and apart from the rest of the land where they are owned by a person other than the owner of the rest of the land.'
In the resolution of the dispute between the parties, this Court will consider the context of the statute, the language used, the subject matter, the effects and consequences, and the spirit and purpose of the law. The law will be given, whenever possible, such an effect that no clause, sentence, or word is rendered superfluous, void, contradictory or insignificant. State v. Deddens, 112 Ariz. 425, 542 P.2d 1124 (1975). In construing tax statutes, it is the rule that the act must be certain, clear and unambiguous as to the subject of taxation, Duhame v. State Tax Commission,65 Ariz. 268, 179 P.2d 252 (1947), and doubtful tax statutes are given a strict construction against the taxing power, State Tax Commission v. Miami Copper Co., 74 Ariz. 234, 246 P.2d 871 (1952). And See Article 9, § 3, Arizona Constitution.
It is Kerr-McGee's position that § 42--227.04, supra, imposes a tax only upon the owner of an oil and gas interest; that it is a producer as that term is used in § 42--227.01(6). It is argued that since Kerr-McGee is 'leasing' the oil and gas rights, it is producing only and is not an owner. Its conclusion therefore is that it is not taxable.
We think such an interpretation strains the statute. It is true by A.R.S. § 42--227.01(6) respondent is a producer, but a producer is defined as any person leasing as lessee oil or gas lands on January 1 of each year. By § 42--227.03, every producer must make and file a return showing his gross production. Section 42--227.04 then plainly provides that producing oil and gas interests shall be taxed as separate parcels of real estate where they are owned by a person other than the owner of the rest of the land. Kerr-McGee, by reason of its leases, has a producing oil and gas interest, which must be valued for tax purposes at the amount of the gross yield for the preceding calendar year, § 42--227.02, and which shall, by § 42--227.04, be separately taxed apart from the rest of the land.
Our conclusions as to Arizona's tax act are reinforced by the law generally applicable to the taxation of oil and gas leases. The oil and gas leases entered into between the Navajo Tribal Council and Kerr-McGee provide:
'Lessor * * * does hereby grant and lease to the lessee the exclusive right...
To continue reading
Request your trial
-
Arnold v. Arizona Dept. of Health Services
...be given effect so that no clause or provision is rendered superfluous, void, contradictory or trivial. State v. Superior Court for Maricopa County, 113 Ariz. 248, 550 P.2d 626 (1976). We hold the general statutes to be in force and controlling upon the (citing Arden-Mayfair, Inc. v. State ......
-
Davisson v. Commissioner of Revenue
...personalty flowing from an interest in the land. Meeker v. Ambassador Oil Co., 308 F.2d 875, 882 (10th Cir.1982). State v. Superior Court, 113 Ariz. 248, 550 P.2d 626 (1976). Callahan v. Martin, 3 Cal.2d 110, 43 P.2d 788 (1935). People ex rel. Hargrave v. Phillips, 394 Ill. 119, 67 N.E.2d 2......
-
Marriage of Berger, In re, 1
...and superfluity and gives meaning to each portion thereof. The case law requires such approach. State v. Superior Court for Maricopa County, 113 Ariz. 248, 550 P.2d 626 (1976); State v. Arthur, 125 Ariz. 153, 608 P.2d 90 (App.1980). It will be noted that in Paragraph A there is no separate ......
-
Jennings v. Woods
...and "promote justice." Mendelsohn v. Superior Court, 76 Ariz. 163, 169, 261 P.2d 983, 987-88 (1953); see also State v. Superior Court, 113 Ariz. 248, 249, 550 P.2d 626, 627 (1976) (considering the "effects and consequences, and the spirit and purpose of the ¶ 66 Although no legislative hist......
-
CHAPTER 13 STATE MINERAL TAXATION: THE ARIZONA EXPERIENCE
...Co., _______ Ariz. App. ______, _____ P.2d ______ (1977) (No. 2CA-CIV 2223, opinion filed Feb. 15, 1977). [179] State v. Superior Court, 113 Ariz. 248, 550 P.2d 626 (1976). [180] Id. at 249, 550 P.2d at 627. See Ariz. Rev. Stat. Ann. §§ 42-227 .01 to 42-227.04 (Supp. 1976-77). [181] Brief f......