V-1 Oil Co. v. Idaho State Tax Com'n, No. 25260.

CourtIdaho Supreme Court
Writing for the CourtSCHROEDER, Justice.
Citation134 Idaho 716,9 P.3d 519
PartiesV-1 OIL COMPANY, an Idaho Corporation, and Mark J. Bennion, d/b/a B-D Oil Company, Idaho Falls, May Term of Court Plaintiffs-Appellants, v. IDAHO STATE TAX COMMISSION, and Michael Southcombe, Colleen Grant, Du Wayne D. Hammond, Jr., and Anne Barker, Commissioners of the Idaho State Tax Commission, Defendants-Respondents.
Docket NumberNo. 25260.
Decision Date01 August 2000

9 P.3d 519
134 Idaho 716

V-1 OIL COMPANY, an Idaho Corporation, and Mark J. Bennion, d/b/a B-D Oil Company, Idaho Falls, May Term of Court Plaintiffs-Appellants,
v.
IDAHO STATE TAX COMMISSION, and Michael Southcombe, Colleen Grant, Du Wayne D. Hammond, Jr., and Anne Barker, Commissioners of the Idaho State Tax Commission, Defendants-Respondents

No. 25260.

Supreme Court of Idaho, Idaho Falls, May Term of Court.

August 1, 2000.

Rehearing Denied September 26, 2000.


9 P.3d 520
Simpson & Gauchay, Idaho Falls, and Hawley Troxell Ennis & Hawley, Boise for appellants. Richard G. Smith argued

Honorable Alan G. Lance, Attorney General, Boise, for respondents. Brian D. Nicholas argued.

SCHROEDER, Justice.

V-1 Oil Company and Mark J. Bennion, d/b/a B-D Oil Company, appeal the summary judgment decision of the district court that the "Trust Fund" tax (Idaho Code §§ 41-4908-4909) is a constitutional and proper exercise of the legislature's authority. The Court affirms the decision of the district court.

I.

BACKGROUND AND PRIOR PROCEEDINGS

The legislature passed the Petroleum Clean Water Trust Fund Act (I.C. §§ 41-4908-4909) in 1990 to insure owners and operators of petroleum storage tanks against possible releases of petroleum from leaky storage tanks. The funds for this trust come primarily from the imposition of a one cent per gallon "transfer fee" on all petroleum products delivered or stored in Idaho. The charge is imposed upon the first licensed distributor who receives the product within the state.

V-1 Oil is a licensed distributor of motor fuels with its principal place of business in Bonneville County. V-1 Oil sought and obtained a ruling from a district court that the one cent transfer fee was really a tax and that the allocation of the proceeds from the tax violated Art. VII, § 17 of the Idaho Constitution.1 Relying on this ruling, V-1 Oil stopped remitting the tax in November 1993. Mark J. Bennion, d/b/a B-D Oil Company, a licensed distributor of motor fuels, also stopped remitting the tax, although he had not been a party to the litigation. As a result of the distributors' failure to pay the tax, the Tax Commission issued deficiencies against both distributors. The Tax Commission appealed the district court's ruling.

This Court affirmed the district court, determining that the one cent fee was in fact a tax and that the allocation of the proceeds from the tax was unconstitutional. V-1 Oil Co. v. Idaho Petroleum Clean Water Trust

9 P.3d 521
Fund, 128 Idaho 890, 920 P.2d 909 (1996) (V-1 Oil I).2

The legislature amended I.C. § 41-4909 in an attempt to comport with the requirements of Art. VII, § 17 of the Idaho Constitution. 1990 Idaho Sess. Laws, Ch. 119, p. 276. The current legislation provides for 77% of the tax proceeds to go to the Idaho Transportation Department for public highway construction, maintenance and repair, 3% to the Idaho Department of Parks and Recreation, and 20% to the Petroleum Clean Water Trust Fund. I.C. § 41-4909. The legislature arrived at this reallocation by reading Art. VII, § 17 to distinguish between gas used to propel motor vehicles upon the highway and gas not used to propel motor vehicles upon the highway. The legislature estimated that 20% of tax revenues is derived from the sale of fuel which is not used to propel motor vehicles upon the highway. Senate Committee on Transportation: Minutes on H: 289, Tuesday, March 11, 1997 (statement of Director Dwight Bower). The legislature reasoned that only the tax upon highway-use fuel is limited by the Idaho Constitution, and that 20% of the tax revenues from the sale of petroleum products may be channeled to non-highway purposes without running afoul of Art. VII, § 17. V-1 Oil and B-D Oil (V-1 Oil) challenge the imposition and allocation of the one cent per gallon tax imposed by I.C. § 41-4908 on both statutory and constitutional grounds.

V-1 Oil asserts that the transfer tax statute, I.C. § 41-4908, is limited by I.C. § 63-2431, which states that the motor fuels taxes provided for in I.C. § 63-2401-2443 shall be in lieu of all other taxes imposed upon gasoline, aircraft, engine fuel or special fuels. Idaho Code § 63-2405 effectively limits the motor fuel tax to twenty-five cents per gallon; thus, V-1 Oil argues, I.C. § 49-4908, which increases the total to twenty-six cents per gallon, is not valid. V-1 Oil also contends that I.C. §§ 41-4908(7) and 41-4909 violate the Due Process and Equal Protection Clauses of the United States Constitution.

V-1 Oil filed its complaint in the district court. The Tax Commission moved for summary judgment, which was granted. The district court held that I.C. § 41-4908 impliedly repealed I.C. § 63-2431, stating that if it did not repeal I.C. § 63-2431, I.C. § 41-4908 must at the very least be interpreted as controlling. The district court further held that I.C. § 41-4908 violates neither the guarantee of due process nor equal protection. V-1 Oil appealed.

II.

STANDARD OF REVIEW

This Court reviews a lower court's statutory interpretation de novo. Thomas v. Worthington, 132 Idaho 825, 828, 979 P.2d 1183, 1186 (1999). Because constitutional questions are purely questions of law, they are also reviewed de novo. Idaho State Insurance Fund v. Van Tine, 132 Idaho 902, 905-906, 980 P.2d 566, 569-570 (1999).

III.

THE LEGISLATURE DID NOT ERR IN INTERPRETING THE IDAHO CONSTITUTION.

Article VII, § 17 of the Idaho Constitution states that "proceeds from the imposition of any tax on gasoline and like motor vehicle fuels sold or used to propel vehicles upon the highways of this state . . . shall be used [] exclusively for the construction, repair, maintenance and traffic supervision of the public highways of this state . . . ." The legislature interpreted this language to create an on-road/off-road distinction in classifying which revenues are earmarked for the public highways of Idaho. Article VII, § 17 limits only the proceeds from the tax on fuels sold or used to propel vehicles upon the highways. There is broad language in V-1 Oil I that would...

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14 practice notes
  • Bradbury v. Idaho Judicial Council, No. 26361.
    • United States
    • United States State Supreme Court of Idaho
    • 10 Julio 2001
    ...Because constitutional questions are purely questions of law, they are reviewed de novo. See V-1 Oil Co. v. Idaho State Tax Comm'n, 134 Idaho 716, 718, 9 P.3d 519, 521 (2000), citing Idaho State Ins. Fund v. Van Tine, 132 Idaho 902, 905-906, 980 P.2d 566, 569-570 (1999). When deciding wheth......
  • Dunn v. Idaho State Tax Comm'n, Docket No. 44378.
    • United States
    • Idaho Supreme Court
    • 25 Septiembre 2017
    ...constitutional questions are purely questions of law, they are ... reviewed de novo ." V-1 Oil Co. v. Idaho State Tax Com'n , 134 Idaho 716, 718, 9 P.3d 519, 521 (2000) (citing Idaho State Ins. Fund v. Van Tine , 132 Idaho 902, 905–906, 980 P.2d 566, 569–570 (1999) ).V. ANALYSIS Throughout ......
  • Robison v. Bateman-Hall, Inc., No. 28349.
    • United States
    • United States State Supreme Court of Idaho
    • 18 Julio 2003
    ...interpretation of a statute is a question of law over which this Court exercises de novo review. V-1 Oil Co. v. Idaho State Tax Com'n, 134 Idaho 716, 718, 9 P.3d 519, 521 (2000). The objective of statutory interpretation is to derive legislative intent. Albee v. Judy, 136 Idaho 226, 230, 31......
  • Dunn v. Idaho State Tax Comm'n, Docket No. 44378
    • United States
    • Idaho Supreme Court
    • 25 Septiembre 2017
    ...constitutional questions are purely questions of law, they are ... reviewed de novo ." V-1 Oil Co. v. Idaho State Tax Com'n , 134 Idaho 716, 718, 9 P.3d 519, 521 (2000) (citing Idaho State Ins. Fund v. Van Tine , 132 Idaho 902, 905–906, 980 P.2d 566, 569–570 (1999) ).V. ANALYSIS Throughout ......
  • Request a trial to view additional results
14 cases
  • Bradbury v. Idaho Judicial Council, No. 26361.
    • United States
    • United States State Supreme Court of Idaho
    • 10 Julio 2001
    ...Because constitutional questions are purely questions of law, they are reviewed de novo. See V-1 Oil Co. v. Idaho State Tax Comm'n, 134 Idaho 716, 718, 9 P.3d 519, 521 (2000), citing Idaho State Ins. Fund v. Van Tine, 132 Idaho 902, 905-906, 980 P.2d 566, 569-570 (1999). When deciding wheth......
  • Dunn v. Idaho State Tax Comm'n, Docket No. 44378.
    • United States
    • Idaho Supreme Court
    • 25 Septiembre 2017
    ...constitutional questions are purely questions of law, they are ... reviewed de novo ." V-1 Oil Co. v. Idaho State Tax Com'n , 134 Idaho 716, 718, 9 P.3d 519, 521 (2000) (citing Idaho State Ins. Fund v. Van Tine , 132 Idaho 902, 905–906, 980 P.2d 566, 569–570 (1999) ).V. ANALYSIS Throughout ......
  • Robison v. Bateman-Hall, Inc., No. 28349.
    • United States
    • United States State Supreme Court of Idaho
    • 18 Julio 2003
    ...interpretation of a statute is a question of law over which this Court exercises de novo review. V-1 Oil Co. v. Idaho State Tax Com'n, 134 Idaho 716, 718, 9 P.3d 519, 521 (2000). The objective of statutory interpretation is to derive legislative intent. Albee v. Judy, 136 Idaho 226, 230, 31......
  • Dunn v. Idaho State Tax Comm'n, Docket No. 44378
    • United States
    • Idaho Supreme Court
    • 25 Septiembre 2017
    ...constitutional questions are purely questions of law, they are ... reviewed de novo ." V-1 Oil Co. v. Idaho State Tax Com'n , 134 Idaho 716, 718, 9 P.3d 519, 521 (2000) (citing Idaho State Ins. Fund v. Van Tine , 132 Idaho 902, 905–906, 980 P.2d 566, 569–570 (1999) ).V. ANALYSIS Throughout ......
  • Request a trial to view additional results

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