Waste Mgmt. of Colo. Inc. v. City of Commerce City, 09CA1083.

• Decision Date: 15 April 2010
• Docket Number: No. 09CA1083.,09CA1083.
• Citation: 250 P.3d 722
• Parties: WASTE MANAGEMENT OF COLORADO, INC., a Colorado corporation, Plaintiff–Appellee,v.CITY OF COMMERCE CITY, Colorado, a municipal corporation; Jerry Flannery, in his official capacity as the City Manager of the City of Commerce City; Roger Tinklenberg, Hearing Officer, and in his official capacity as the Acting Deputy City Manager of the City of Commerce City; and Carol Enninga, in her official capacity as the acting Director of Finance of the City of Commerce City, Defendants–Appellants.
• Court: Colorado Court of Appeals

250 P.3d 722

WASTE MANAGEMENT OF COLORADO, INC., a Colorado corporation, Plaintiff–Appellee,

v.CITY OF COMMERCE CITY, Colorado, a municipal corporation; Jerry Flannery, in his official capacity as the City Manager of the City of Commerce City; Roger Tinklenberg, Hearing Officer, and in his official capacity as the Acting Deputy City Manager of the City of Commerce City; and Carol Enninga, in her official capacity as the acting Director of Finance of the City of Commerce City, Defendants–Appellants.

No. 09CA1083.

Colorado Court of Appeals, Div. II.

April 15, 2010.

Holland & Hart LLP, Alan Poe, Greenwood Village, Colorado; Holland & Hart LLP, Christina Gomez, Denver, Colorado, for Plaintiff–Appellee.Murray Dahl Kuechenmeister & Renaud LLP, M. Patrick Wilson, Christopher M. Price, Denver, Colorado, for Defendants–Appellants.Opinion by Judge GABRIEL.

Defendants, the City of Commerce City, Jerry Flannery, Roger Tinklenberg, and Carol Enninga (collectively, the City), appeal the district court's order granting summary judgment for plaintiff, Waste Management of Colorado, Inc. (Waste Management). The court determined that Waste Management's provision of so-called “roll-off” containers to customers and its contracts with transportation companies to haul trailers for it were not subject to tax under the City's Sales and Use Tax Code (the Code), because neither type of transaction involved the furnishing of tangible personal property within the meaning of the Code. We agree with the district court and therefore affirm.

I. Background

A. Roll–Off Service

Waste Management provides waste removal, disposal, and recycling services to customers in the City. In addition to curbside service, Waste Management offers a “roll-off service” for customers with substantial amounts of waste or recyclable materials. When a customer contracts with Waste Management for this service, Waste Management transports to the customer's location a large steel container with rollers on the bottom for the customer's use in disposing of waste or recyclables. This container is transported by loading it onto a trailer or chassis and hauling it by truck or tractor. Waste Management owns the roll-off containers, paid sales or use tax to the City when it purchased them, and uses them solely for providing the roll-off service.

When a container is full or the customer is otherwise ready to have the container picked up, Waste Management picks it up. At that time, depending on the customer's needs, Waste Management might replace the full container with another container. Waste Management then transports any materials in the full roll-off container to a disposal site, recycling facility, or transfer station.

Under Waste Management's typical service agreement for roll-off service, customers pay a fee each time Waste Management removes the roll-off container. There is no separate charge in the agreement for the roll-off containers themselves. Nor does Waste Management sell, lease, rent, or license the use of roll-off containers to its customers. And, as pertinent here, Waste Management did not collect sales tax from its customers in the City with respect to its fees and charges for providing waste removal and disposal services, including its roll-off services.

B. Waste Hauling

During the time period relevant here, Waste Management contracted with two transportation companies, first, Dutch Boy Express, Inc. (Dutch Boy) and, later, Ryder Integrated Logistics, Inc. (Ryder), to haul its trailers from its transfer station in the City to landfills or recycling facilities and to return the empty trailers to the transfer station. Waste Management's agreements with both Dutch Boy and Ryder provided that Waste Management would pay those companies on a per load or per hour basis. In providing hauling services to Waste Management, Dutch Boy and Ryder either used their own tractors and drivers or contracted with third parties. There was no separate charge or payment for the use of the tractors. Moreover, neither company charged sales tax on the amounts that Waste Management paid for the hauling services.

C. Procedural History

The City conducted a tax audit of Waste Management for the period from July 1, 2003 to June 30, 2006. Upon completion of this audit, the City notified Waste Management of a tax deficiency and assessment. The assessment sought to collect sales or use taxes on Waste Management's revenues from roll-off services provided to customers located in the City during the audit period. The assessment also sought to collect sales or use taxes on the amounts charged to Waste Management for the hauling services provided by Dutch Boy and Ryder during that period. The City claimed that both types of transactions were taxable under section 20–4–7 of the Code, which imposed sales or use tax on the purchase price paid or charged, or for any consideration for the furnishing of, tangible personal property in certain transactions.

Waste Management timely appealed the deficiency notice in a letter to the City's Director of Finance. In this letter, Waste Management asserted that because it does not sell, rent, lease, or charge for furnishing the roll-off containers to its customers, the roll-off service is not subject to sales tax under the Code. Waste Management further argued that because the hauling companies do not sell, rent, lease, or charge for furnishing tangible property to Waste Management, the hauling service likewise is not subject to the City's sales or use tax. A hearing officer subsequently upheld the imposition of sales and use taxes on the above-described transactions, but for reasons not at issue here reduced the amount of Waste Management's purported tax liability.

Waste Management then timely filed a complaint and notice of appeal in the district court, seeking de novo review of the hearing officer's decision to assess sales tax in connection with Waste Management's roll-off service and use tax on the above-described hauling services. Waste Management also appealed, in the alternative, the hearing officer's failure to provide a credit for the sales or use taxes it had paid when it purchased the roll-off containers, arguing that the imposition of sales or use tax both when Waste Management purchased the roll-off containers and when it provided roll-off services to customers would result in double taxation. Thereafter, the parties filed cross-motions for summary judgment.

The district court ultimately granted Waste Management's summary judgment motion and denied the City's summary judgment motion. The court determined that Waste Management's roll-off service and the contracted hauling services are not subject to sales or use tax under the Code.

The City now appeals.

II. Standard of Review

We review the district court's grant of summary judgment and its interpretation of the applicable Code provisions de novo. Williams v. State Farm Mut. Auto. Ins. Co., 195 P.3d 1158, 1160 (Colo.App.2008) (appellate court reviews the grant of summary judgment de novo); Bd. of County Comm'rs v. ExxonMobil Oil Corp., 192 P.3d 582, 585 (Colo.App.2008) (statutory interpretation is a question of law that appellate court reviews de novo), aff'd, 222 P.3d 303 (Colo.2009).

When reviewing a municipal ordinance or code, we construe it using the same rules that we use in interpreting statutes. Mahaney v. City of Englewood, 226 P.3d 1214, 1217 (Colo.App.2009). Our primary task in interpreting statutes and municipal enactments is to give effect to the intent of the drafters, which we do by looking to the plain language. JJR 1, LLC v. Mt. Crested Butte, 160 P.3d 365, 370 (Colo.App.2007); see also Hygiene Fire Protection Dist. v. Bd. of County Comm'rs, 205 P.3d 487, 490 (Colo.App.2008), aff'd, 221 P.3d 1063 (Colo.2009). We should read statutes and municipal enactments in such a way as to give effect to every word. See Hygiene Fire Protection Dist., 205 P.3d at 490. We also must consider the language used in the context of the statute or code as a whole, and we must give effect to the ordinary meaning of the language and read the provisions as a whole, construing each consistently and in harmony with the overall statutory design, if possible. Id. Interpretations that will render words or phrases superfluous should be rejected. Id. Likewise, we must avoid interpretations that produce illogical or absurd results. People v. Cross, 127 P.3d 71, 74 (Colo.2006).

If the language of a statute or code provision is clear and the intent of the legislative body that enacted it may be discerned with certainty, we need not resort to other rules of statutory interpretation. Western Fire Truck, Inc. v. Emergency One, Inc., 134 P.3d 570, 573 (Colo.App.2006). We give deference to the interpretation provided by the officer or agency charged with the administration of the code or statute unless that interpretation is inconsistent with the legislative intent manifested in the text of the statute or code. See Aberdeen Investors, Inc. v. Adams County Bd. of County Comm'rs, 240 P.3d 398, –––– (Colo.App. 2009); cf. General Motors Corp. v. City & County of Denver, 990 P.2d 59, 74 & n. 15 (Colo.1999) (noting deference due to Denver manager of revenue's interpretation of sales and use tax exemption in city code). Moreover, when the language of the statutory or code provision at issue is ambiguous, we may also look to legislative history, prior law, the consequences of a given construction, and the goal of the statutory scheme to ascertain the correct meaning of the provision. Bd. of County Comm'rs v. Costilla County Conservancy Dist., 88 P.3d 1188, 1193 (Colo.2004).

Finally, it is a longstanding rule of construction in Colorado that tax provisions like those at issue here will not be extended beyond the clear import of the language used, nor will their operation be extended by analogy. City of Boulder v. Leanin' Tree, Inc., 72 P.3d 361, 367 (Colo.2003). In addition, we must construe all doubts...